Archive for the ‘State Government’ Category

Donamire Farm and its owners do not depend on a healthy Thoroughbred industry to survive; the farm was funded through the thousands of homes built by their Ball Homes LLC. In fact, some suggest Ball Homes will be even more profitable if the Thoroughbred industry fails and farm land is sold cheaply for residential development.

Yes, it is true state governments are facing hard economic times. So are the American people, including most racing participants and fans. The elimination of the government regulation of this form of gambling will destroy this sport in ways that I am sure Mr. Irwin does not intend or envision. Perhaps if there were no gambling, then his idea might make sense. So, unless he seeks a private club with no gambling everyone’s time is wasted contemplating the insane idea that elected officials are going to allow gambling enterprises to self police themselves. It’s a bad idea that will not pass the smell test.

To bolster his case, Irwin cites how the New York Racing Association in New York was victimized by the state. Excuse me, but NYRA did have to march in front of a federal judge and admit to a conspiracy to defraud the government. The “we have great racing and we know what we’re doing” defense wasn’t going to work given the magnitude of the felony that cheated the public regardless of whether they were racing fans or not. This was a terrible black eye on racing by an entity governed by some of the most prominent individuals in American Thoroughbred racing and it would not be in racing’s future interest for people to minimize the seriousness of that situation.

As one who worked on that case, it was amazing that NYRA refused to do a daily cash count and reconciliation in the mutuel department. They do that at the corner grocery store, but somehow this was something to be resisted when suggested by the state. I will never forget the day when NYRA sent in a team of some of the most politically connected trustees to argue against a daily cash count. One of those present was the president of my bank. I stopped using that man’s bank.

Sure, let’s open some champagne and make those nasty state regulators go away. After all they were the ones who investigated and cracked the case that exposed how a tote company’s computer programmer could access a live wagering file and turn a losing Breeders’ Cup Pick 6 wager into a winning one. The New York Racing and Wagering Board partnering with the New York State Police cracked that case within 48 hours of Valponi’s Classic win. What was amazing in doing the investigation was that this activity had gone on undetected for some time and no internal controls, self auditing or self policing program had safeguarded the industry’s interests. We unearthed a problem plaguing the industry and regulators alike.

Mr. Irwin seems to like the Stewards, who for the most part are employees of the state commissions. Well, we must be doing something right. But he does not appear to tolerate due process. Commissions are as frustrated with this as anyone, but perhaps if Mr. Irwin had been around in the days of Ben Franklin, Thomas Jefferson and John Adams, things might be different. In a system of due process, allegations must be proven based on solid evidence. People have a right to appeal and we are always open to solid suggestions as to how to minimize the ability of some to “play the system”. The concept of a Monarch was rejected in the revolution and we have no choice but to accept the constitutional guarantees that we all enjoy, including the scoundrels.

At no point in the almost five years I have been at RCI or the preceding nine at the New York Racing and Wagering Board did Mr. Irwin ever make a suggestion directly to either entity as to how to more effectively tackle racing’s integrity challenge. Things can always be done better but racing should never forget that when it comes to drugs, we test for more substances at deeper levels than any other professional sport. There is a lot that is done right, but you’d never know it as some explain their loss by leveling undocumented charges against winners. Perhaps if racing stopped casting aspersions on those who are successful on the track or at the betting windows we might be able to generate some excitement and attract new fans. But no, if you hit a lucky streak you must be cheating.

The only entities that sort out what is real and what is not are the state racing commissions. Those who cheat will do it for the money and the initiatives of RCI and the state regulators to track the money through independent real-time wagering monitoring have met with nothing but unexplained resistance or foot dragging from key industry entities. Some of those barriers are coming down, but oh so slowly. I agree with Mr. Irwin that cheaters can kill this sport, but why do we devote all our attention to following the drugs and virtually none to following the money? The money path will help identify the real drug problem or fraud by collusion. It is unexplainable to me that people resist when the regulators want to chase the money in addition to chasing the drugs.

The state regulators have been calling for reforms and could really use some help from the industry in terms of either money, commitment, or support in state capitals to protect commission budgets that pay for drug testing, pre-race exams, backstretch investigators, the officials, the background checks, name it. In these tough times racing regulatory commissions are vulnerable targets for state budget offices looking to fill potholes rather than test more horses for drugs or monitor betting activity. We’re not perfect, no institution or person is. But every regulator that I know is committed to trying to do the job as best as possible, despite the lack of budgetary or industry support.

There are those who want to create a federal regulator which would just create another layer that would have to be paid for. An alternative is to explore the concept of creating a national regulatory body through a new interstate compact, a mechanism for state regulators to act as one in certain instances. Just this week, 15 state regulatory commissions held a joint discussion on how a proposal working its way through the New York legislature might work in their states. There is progress being made and the impetus is coming from the RCI member staffs, vets, labs and vendors who form the backbone of the Racing Medication and Testing Consortium’s drug initiative.

When I started with RCI in 2005, we called for a new public private partnership and a restructuring of our collective “integrity efforts”. I reiterated that at this year’s Racing Congress. No takers. Rather than partner with the regulators, pool resources and improve the status quo, new entities are formed, funded and promoted by hired guns. Dump on us all you want but state racing commissions are a given and we will not stop in trying to raise the bar.

Please join with us Mr. Irwin. Perhaps together we can break the negative energy that is sinking this sport.

By Ray Paulick
Where is the outrage?

Kentucky legislators seem to be getting in each other’s way to grease the skids for a tax break of up to $36.75 million to Bruton Smith, the ultra-rich chairman and chief executive officer of Speedway Motorsports, which owns seven NASCAR racetracks and last year purchased Kentucky Speedway from a partnership that included Jerry Carroll, the former owner of Turfway Park. Smith also is founder of Sonic Automotive, which owns 200 automobile dealership across the United States.

Smith’s net worth has been estimated as high as $1.5 billion by Forbes magazine in its annual list of the world’s billionaires. Admittedly, poor ol’ Bruton has fallen on hard times with the economic crisis and subsequent fall in the stock market. His net worth today is probably less than $500 million. Can you blame him for seeking a government handout?

Nevertheless, it’s a little cheeky for this good old boy octogenarian from North Carolina (pictured, left) to wander, hat in hand, into Kentucky, a state facing a serious budget crisis, and ask for a tax break so that he can renovate Kentucky Speedway and maybe, just maybe, bring a NASCAR race to the Bluegrass State. That’s something Carroll wasn’t able to accomplish when he built the Northern Kentucky car track, a failure that led to his pending lawsuit against NASCAR.

Smith wants Kentucky to pay him 25% for expansion costs at Kentucky Speedway. He has proposed spending $75 million to renovate and expand the Sparta, Ky., track. And no one in state government is outraged.

Where are the legislators who are quick to criticize pleas for financial help from the horse industry, the state’s No. 1 agribusiness and one that employs upwards of 100,000 individuals, simply because there are some wealthy Thoroughbred farm owners?

Where is Gov. Steve Beshear, who came into office with widespread support from horse farmers throughout the state on the promise that he was going to help them be more competitive with neighboring states that are getting subsidized by slot machines or video lottery terminals?

Where are they? Well, they’re probably making plans for some boogity boogity boogity while attending the next NASCAR race. According to the Lexington Herald-Leader, Beshear and cabinet secretary Larry Hayes have already been to NASCAR events in Charlotte, N.C., and Bristol, Tenn., at tracks owned by Smith, “to learn how big an attraction the events are.”

There are, undoubtedly, some future fact-finding missions for members of Kentucky’s august legislative body. Perhaps a trip this weekend to the Atlanta Motor Speedway, another track owned by Smith’s Speedway Motorsports, or two weeks later to Bristol, where our NASCAR-lovin’ pols can be wined and dined on chicken wings and Bud Lights in one of the track’s luxury suites.

There are no two ways about it: this deal stinks. Call Gov. Beshear’s office at (502) 564-2611 and tell him to just say no to tax breaks for billionaires. If Kentucky is meant to host a NASCAR race, a welfare check for someone like Bruton Smith should not be part of the bargain. He doesn’t need the money nearly as much as Kentucky does.

UPDATE: On Wednesday morning, Beshear announced that  because of the state’s budget crisis he is cutting $200,000 from the annual Derby morning breakfast traditionally given by Kentucky’s governor. This year’s guests will be asked to pay $1 for each food item purchased (Kentucky state employees will prepare the food), as opposed to previous free breakfasts for guests. The state won’t be renting tents for this year’s breakfast, so let’s hope for clear skies on Derby morning. Click here for details.

Copyright © 2009, The Paulick Report

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