Posts Tagged ‘Bill Farish’

By Ray Paulick
I was all set to name Satish Sanan the winner of the first annual John Mayer Foot in Mouth Award for comments he made on Steve Byk’s “At the Races” Sirius/XM satellite radio show last Tuesday from which he was quoted in a Bloodhorse.com article as saying Churchill Downs was the “worst” racing organization and each of the Breeders’ Cups at Lone Star Park and Monmouth Park was a “disaster.”

Then I thought I’d better listen to the show before throwing Sanan under the bus with Mayer, the pop star who made some outrageous remarks in a just-published Playboy magazine interview about former girlfriends Jessica Simpson and Jennifer Aniston, among other subjects. Since the interview was published, Mayer, a profilic Twitterer, said he has “been trying to prove to people I’m not a douche bag.”

For what it’s worth, I don’t think Sanan has to take that drastic of a measure.

He did, however, agree to send out a statement admitting that he “mischaracterized” the relationship between the Breeders’ Cup and Churchill Downs during the course of the interview, which mostly consisted of him responding to criticism from several callers who disagreed with the concept of a permanent site for horse racing’s championship event. The callers especially disagreed with Santa Anita Park being named the permanent site, a rumor that has been making the rounds after numerous trial balloons were sent out by Breeders’ Cup officials but as Sanan pointed out on more than one occasion during the show is a decision that has not been ratified by the board. His personal preference, he said, was for Santa Anita Park to be the permanent site. (Archives for Sanan’s weekly segment on the show, entitled “Our Industry,” can be heard here.)

The full board of members and trustees of the Breeders’ Cup met in Florida on March 3, the day after Sanan’s radio appearance, and the Bloodhorse.com article published that morning apparently caused Breeders’ Cup board chairman Bill Farish’s blood to boil.

Farish issued a testy statement by mid-afternoon:  “The Breeders’ Cup board is extremely disappointed with recent statements from board member Satish Sanan with regard to host sites and those views in no way reflect the official position of Breeders’ Cup, LTD. The Breeders’ Cup has longstanding and valued partnerships with Churchill Downs and the New York Racing Association. No final decisions have been made on host sites beyond 2010 and as we indicated in December the board is looking at a permanent host location as a potential option as part of our ongoing strategic planning initiative. We extend our sincere apology to Churchill Downs and the State of Kentucky. We look forward to our return to Louisville and Churchill Downs for the 2010 Breeders’ Cup World Championships.”

Only Tiger Woods has apologized to more people.

Sanan sent an email to all of the members and trustees on March 4, a copy of which was leaked (not by Sanan) to the Paulick Report.

It reads: “I want to take this opportunity to address and clarify a number of issues raised in Bill Farish’s memo and mischaracterization of my comments during my regular show on Tuesdays on ‘At the Races’ radio network. The facts are as follows:

Regards,
Satish Sanan”

Sanan said things on his radio appearance about Churchill Downs that almost certainly have been said privately by other Breeders’ Cup board members, but the horse industry is not used to someone who serves on some of these exclusive boards being as candid publicly as Sanan has been. Perhaps Farish is somewhat sensitive because his father, William Farish, is the former chairman of the Churchill Downs board, but he knows the attitude about the Breeders’ Cup represented by CEO Bob Evans and his top executives  in negotiations to be host site can be summed up as follows: “We don’t really care if we host your event or not.”

Was there anything to be gained by trashing Churchill Downs, Lone Star Park, and Monmouth Park? No, there wasn’t, and I’m sure Sanan has said other things he’s regretted during the many hours he has spent communicating with racing fans and horsemen on the “At the Races” show. In the heat of the moment, I think Breeders’ Cup chairman Farish was just as much out of line, overreacting publicly to what Sanan was quoted in a news article as saying.

This industry needs people with the candor, the fresh perspective and the creative business acumen that Sanan has brought to Breeders’ Cup and other industry organizations, including the Thoroughbred Owners and Breeders’ Cup, where he is member of a committee addressing issues related to structural changes and horse racing’s broken business model.

The candor sometimes gets him in trouble. “There is a group of people particularly pissed off at me,” he said on the radio show, “not as to what I’m trying to achieve or what the group is trying to achieve, (but about) what I had said about the alphabet soup organizations…People are taking it personally, some of the officers of some of these organizations. Candidly, the old saying in business is if you are trying to solve a business problem, generally speaking people who are part of the problem are people who are going to object to it.”

It’s that kind of candor and blunt talk that doesn’t endear Sanan to some people, but I get the feeling he doesn’t really care about that. We haven’t gotten very far in this business by having boards who rubber stamp cautious executive decisions, discourage open dialogue, and keep electing the same people year after year after year.

Copyright © 2010, The Paulick Report

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The following statement was emailed to the Paulick Report today regarding the comments yesterday from board member Satish Sanan.

Statement from Breeders’ Cup Chairman, Bill Farish
The Breeders’ Cup board is extremely disappointed with recent statements from board member Satish Sanan with regard to host sites and those views in no way reflect the official position of Breeders’ Cup, LTD. The Breeders’ Cup has longstanding and valued partnerships with Churchill Downs and the New York Racing Association. No final decisions have been made on host sites beyond 2010 and as we indicated in December the board is looking at a permanent host location as a potential option as part of our ongoing strategic planning initiative. We extend our sincere apology to Churchill Downs and the State of Kentucky. We look forward to our return to Louisville and Churchill Downs for the 2010 Breeders’ Cup World Championships.
 
Statement from Breeders’ Cup Board Member, Satish Sanan
I mischaracterized the Breeders’ Cup’s relationship with Churchill Downs and other host sites in a recent radio interview. I regret my poor choice of words. As part of the Breeders’ Cup strategic planning process, the board continues to evaluate future host sites and other core business issues.

For the original story on Sanan’s comments, click here.
 

Not all is well in the kingdom of David Williams, Kentucky’s State Senate President and the state’s most powerful Republican not named Mitch McConnell. Republican Senators continue to drop like horseflies as a result of Williams’ strident anti-slots view with another possible casualty coming up soon in the race between Democrat Jodie Haydon and Republican Jimmy Higdon.

As a former Republican leader, I can promise you this makes many among the party faithful nervous. An increasing number are wondering why we are choosing to die on this cross. Is this really a core Republican issue on the same par as lower taxes and less government? Shouldn’t we have a pro-economic development stance on this issue instead of obstructing growth for political purposes? And in a state that already has pari-mutuels and a state lottery, haven’t we already crossed the pro-gambling threshold anyways?

With the prospects for Republicans losing the Senate becoming more likely, conservatives in Kentucky are increasingly concerned about the consequences. Even more important than not controlling a single branch of state government, the redrawing of the US Congressional districts will be done by the Senate. If Democrats have control, they will change the make up of the Kentucky coalition of Congressmen for the foreseeable future. Most maddening, this all could have been avoided if David Williams hadn’t decided to put all his eggs in this fringe issue’s basket. This is the problem with the modern Republican party; we spend too much time on 50/50 divisive issues like gay marriage and slots at racetracks and don’t concentrate on important "kitchen table" policy that people really want to hear about.

My former organization, with no prodding from yours truly, sent out an interesting email last night asking a few simple questions about the gaming issue. That in itself is not a huge deal, but the wording and sources cited make it clear that at least from the big city Louisville Republican perspective, Bill Farish’s hope for a palace revolt may not be too far behind. Not only do they lay out the case for slots in Kentucky, but they use the facts page from KEEP, an organization most recently known for promoting expanded gaming in the Bluegrass State.

Having been on the receiving end of many disgruntled phone calls after the Senate debacle this summer, I can tell you the Louisville natives are restless. I was able to fully use my voice on this issue once I left my position as chairman. It’s good to see the wind of change are allowing the Jefferson County Republican Party to begin speaking out as well.

- Bradford Cummings

AN EMAIL DISTRIBUTED BY THE JEFFERSON COUNTY REPUBLICAN PARTY
PLEASE FEEL FREE TO TAKE THE SURVEY LINKED AT THE END

When people think about Kentucky they think about horses, and the Kentucky Derby.  The horse industry employs over 100,000 people, and is Kentucky’s largest agricultural cash crop.  To learn more about the economic impact of the horse industry in Kentucky go to: www.horseswork.com/facts.htm.

But the horse industry in Kentucky is in trouble. Our racing stables and breeding stock are being moved to other states.  The reason is simple economics.  These competing states are subsidizing their thoroughbred industries with the proceeds from slot machines.  These subsidies help them to attract racehorses from Kentucky with higher purses, and studs and brood mares with incentives for horses foaled in that state, and are seriously undermining the preeminence of Kentucky’s horse industry.   The importance of the horse industry to Kentucky is undeniable.  The question is how we maintain our competitiveness with subsidized racing and breeding in other states. 

Tell us what you think.  Respond to our survey on this issue at www.louisvillegop.com. 

By Ray Paulick
A summit meeting between the leader of the Kentucky state senate’s majority Republican Party and a group of prominent Thoroughbred owners and breeders began shortly after 3:30 p.m. in the offices of the U.S. Pony Club at the Kentucky Horse Park near Lexington on Tuesday afternoon. The expected subject matter was the future of Kentucky’s beleaguered signature industry and the gulf that exists between horsemen and Sen. President David Williams on the issue of VLTs or expanded gambling at state racetracks.

Williams has repeatedly used his power and influence to block slots or VLT legislation that most in the horse industry see as necessary in the wake of competition from bordering states—this despite a reported penchant for gambling at out of state casinos and riverboats that has earned Williams the nickname of “Blackjack” here at the Paulick Report (more about that later). Williams has come under fire recently from fellow Republicans in the horse community, most notably Bill Farish, general manager of Lane’s End Farm in Versailles and son of William S Farish, a close friend to former Presidents George H.W. Bush and his son, George W. Bush.

Williams met with the board of directors of the influential Kentucky Thoroughbred Association and Kentucky Thoroughbred Owners and Breeders, along with representatives of the Kentucky Horsemen’s Benevolent and Protective Association and the Kentucky Thoroughbred Farm Managers Club. David Switzer, executive director of the KTA/KTOB, said the decision was made to keep it a closed meeting from the press and others in order to ensure what he called “free speech.” 

Also attending the meeting was Scott County Republican Sen. Damon Thayer, a Thoroughbred industry consultant and former executive at Breeders’ Cup and Turfway Park whose silence and lack of support for VLT legislation during a special session of the legislature in June  was widely criticized by individuals in the horse industry. Ed Worley (D-Richmond), the minority leader in Kentucky’s Senate, also was on hand.

As one reader pointed out in a comment, it’s curious why the Kentucky Equine Education Project was not invited to the meeting, which the KTA’s Switzer said Williams had requested two months ago.

WILLIAMS, THAYER TO INTRODUCE CONSTITUTIONAL AMENDMENTS
Following the meeting that lasted nearly two hours the dynamic duo of Williams and Thayer  (pictured, left) emerged first, telling reporters about their plans to introduce two constitutional amendments involving gambling in the 2010 legislative session. Williams spoke first, saying he was going to introduce a bill calling for a constitutional amendment to ban the expansion of gambling in Kentucky without what he called "the vote of the people". 

Thayer then said he will sponsor legislation giving voters a chance to decide whether to permit VLTs in seven counties where racetracks are located. If passed, both amendments would go before voters in November 2010. If approved by a majority of Kentuckians, Thayer’s proposed constitutional amendment would then require enabling legislation and a local option vote in all seven counties, followed by a licensing approval process. He did not give a concrete date for when that entire process, which would include a bidding process and licensing of VLT facilities, could be completed.

Click here to see an outline of Thayer’s proposed constitutional amendment. 

If the measure passed and VLT facilities were fully operational (they aren’t necessarily tied to racetracks in the seven counties, based on the proposal), Thayer said Kentucky owners and breeders would get $100 million annually or 25% of net revenue , whichever is higher.

Williams said he would personally oppose the constitutional amendment permitting VLTs but would not attempt to stop it from going through the Senate chamber. Both constitutional amendments would require super majority votes in the Senate (23 of 38 votes) and House (60 of 100 votes). Currently, the House is controlled by Democrats, while Williams and his fellow Republicans hold a 20-17 edge over Democrats in the Senate, with one member independent.

Legislation permitting VLTs passed the House during the special session of the legislature in June, but it was killed in a Republican controlled Senate committee, preventing the measure from getting a full vote on the Senate floor. Since the bill was killed, the Republicans lost one seat in a special election and could conceivably lose another if Republican Sen. Dan Kelly is offered and accepts a judgeship from Democratic Gov. Steve Beshear. Republicans currently control the Senate by a 20-17 edge over Democrats, with one independent.

Williams said if the VLT legislation had been passed by the Senate, "we’d be tied up in litigation" over the constitutionality of the bill. Besides, Williams said, Gov. Beshear ran on a platform that would permit Kentuckians to vote on whether to allow racetracks to offer expanded gaming. "The governor has some opportunity to show some leadership on this situation," Williams said. "It was his campaign promise that he wanted the people to decide. These two amendments, if the governor will support them, will allow the people to decide. In the intervening time, we can try to do some things to supplement the (horse racing) purses."

According to the Lexington Herald-Leader, Beshear issued a statement calling the proposed constitutional amendments "cynical" and "political."

When asked about the reaction of horse industry representatives to the proposals, Williams said the discussions were "spirited". Thayer added, "They were courteous."

Williams seemed defensive when asked by one reporter if he would "allow" Thayer’s amendment to be voted upon by the full Senate. "What do you mean ‘allow’?" he responded. He then said it was wrong to blame the failure of the VLT bill on one person (presumably Williams was referring to himself) and said the measure passed the House by a "skinny majority." He chided VLT supporters for calling the opponents of the measure "disingenuous, dishonest and corrupt." 

Thayer said he has not heard much criticism over his lack of support for the VLT bill from his constituents in Scott County but admitted he has been criticized by members of the horse industry. He said he has been consistent in his support of a constitional amendment but said legislators have been too busy on other issues to introduce a bill calling for a constitutional amendment over the last 10 years.

"This is a horse industry protection bill," insisted Thayer. "We will have the most desirable year-round racing circuit in the country."
 
DEMOCRATIC LEADERSHIP, HORSE INDUSTRY OPPOSES
Democratic Senate Floor Leader Ed Worley (pictured, left), who also attended the meeting, dismissed chances of members of his party supporting the legislation. "It ain’t gonna happen," Worley said, adding that Thayer’s constitutional amendment would be "dead on arrival." He was highly critical of Thayer for not contacting him "as a courtesy" to outline his plans for the legislation before going public with it. Worley said he had canvassed all but one member of the Democratic caucus  and said none of them would support the constitutional amendments.

"What this is about is politics," Worley said. "This buys (the Republicans) time and divides the industry, and that’s what it is intended to do"–calling it a "wedge issue." Meanwhile, "the multi-billion-dollar industry" is suffering, Worley said. "The rank and file of the industry aren’t sheikhs. They don’t all have million-dollar horses."

Bill Farish said the lengthy time line for the constitutional amendment, statewide referendum, enabling legislation, local option votes and licensing process was not acceptable to a horse industry that needs more immediate help. A statewide referendum and local-option elections "give out-of-state casinos two shots to oppose" the measure, he added, saying they would spend millions in advertising in an effort to sway public opinion against VLTs at racetracks.

"We have our position and he (Williams) has his position," Farish said, though he added the horse industry will continue to seek common ground with legislators. In the meantime, he said, the industry will work to elect senators and House members who understand and support the horse industry’s position.  "As an industry we are united." 

It was startling to hear Farish, whose family has such longstanding, close ties to Republican Party politics, using the word "we" while discussing the horse industry’s support of Democratic candidates for state Senate and House seats. And if it’s startling to me, imagine how high-ranking Republicans like U.S. Sen. Mitch McConnell feel about the manner in which Williams has alienated so many Republican Party supporters.

Don Robinson (pictured, left, with Bill Farish), the president of the KTA/KTOB, said one of the horsemen in the meeting called the presentation by Williams and Thayer "smoke and mirrors". 

"By acclamation, (KTA/KTOB) supports  the Senate having a full hearing of the House bill," Robinson added,  He said the horse industry would have supported a constitutional amendment several years ago, but "it’s a different timetable now. We are in trouble. Mares are leaving the state. It’s too little, too late."

Thayer disagreed, saying, "It’s never too late to let the people decide."

If the VLT amendment passed and got local-option approval, the KTA’s Switzer said, it would be late 2013 or early 2014 before any revenue would find it’s way to the horse industry and state coffers. "Our backs are to the wall," he said. 

WILLIAMS DENIES ANY GAMBLING TIES
A final note: I asked Williams about his cease and desist demand in the wake of recent published comments from Lebanon, Ky., attorney James Avritt Sr., which suggested Williams’ opposition to racetrack VLTs might trace to out-of-state casino companies. "Who are  you?" Williams wanted to know after I said some people were interested in any personal experience with gambling he might have at out-of-state casinos.  When I said I wrote for the Paulick Report, he replied, "You’re the only who’s been saying anything about that." I also asked the Senate president if his law firm has represented any casino interests. "Absolutely not," he replied.

After that exchange, I got the feeling Williams probably would not invite me to Frankfort for a tour of the state capitol or a lunch at his favorite hangout (or, for that matter, on a road trip to Indiana’s Horseshoe Casino, located  just 20 minutes from downtown Louisville, Ky.).  But, on the other hand, he was in hostile territory and didn’t seem to be in the best of moods when I asked about any personal interest he has in gambling.

"We’re not his friends," said KTA/KTOB president Robinson. 

That might have been the understatement of the day.

Copyright © 2009, The Paulick Report

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In the latest of a series of editorials between Kentucky’s horsemen and Senate President David Williams, Bill Farish of Lane’s End Farm writes a scathing indictment of the constitutional amendment. He claims it is a cop-out by Senate Republicans and that by David Williams’ own admission, an amendment is an unnecessary step.

While we both agree that slots are essential to the survival of Kentucky racing, how we get there is where the Paulick Report splits. Ray has been against a constitutional amendment, believing it will only stall the process and ultimately lead to nothing. I understand the current make up of the Senate and believe the only way to have this signed into law by 2011 is through the people. If 70% of Kentuckians want this, then it should be a slam dunk, right? And there is no guarantee the Senate will flip in 2010 as it is shaping up to be a Republican year nationally.

What say you? - Bradford Cummings

While our signature industry continues to exit the Commonwealth, our Republican leaders in the Senate continue to insist on playing politics with the future of the Thoroughbred business in Kentucky. For the last few years, Senate Republicans led by Senate President David Williams have steadfastly opposed a constitutional amendment to allow expanded gaming opportunities at Kentucky’s racetracks. Their longstanding opposition has allowed our competitor states to establish racing and breeding programs subsidized by expanded gaming, and those states have put us at an enormous competitive disadvantage. We are losing race horses, stallions, mares and a significant number of jobs to those states, and we are in danger of seeing major farms shutter their operations and move to friendlier jurisdictions.
 
As a final insult to our signature industry, Sen. Williams did not even bother to bring legislation that would have allowed VLTs at Kentucky race tracks for a full vote of the Senate. After the bill passed the House it was promised a fair hearing in the Senate, but was instead sent to a committee where the chairman declared it dead before testimony was even heard.
 
So after years of outright neglect and hostility toward an industry that employs 100,000 Kentuckians, it appears that Senate Republicans are beginning to feel the heat from their constituents. As almost 70 percent of Kentuckians support putting VLTs at racetracks, and as their Senate majority has shrunk with the loss of two straight special elections, one would hope that Senate Republicans would finally listen to the majority of Kentuckians by supporting legislation to put our industry on a level competitive playing field. But sadly, it appears that Senate Republicans will continue to play political games with the livelihoods of so many hard working Kentuckians.
 
The word around Frankfort is that Senate leadership is preparing to offer up the old idea of putting forth a constitutional amendment to permit gaming at Kentucky race tracks. This sounds great on the surface but, as usual in politics, there is more to it than meets the eye. First, a constitutional amendment is unnecessary, and Sen. Williams has already conceded this point. Allowing VLTs at racetracks is already constitutional, as affirmed by two recent Attorney General Opinions. Sen. Williams agreed that a constitutional amendment is not required to put VLTs at racetracks. So why then are they preparing to support a constitutional amendment? Politics.
 
Senate Republicans are struggling to retain their majority, and several of their members are facing tough re-election fights next November. It seems that Senate leadership has made the cynical decision to try and put expanded gaming on the ballot in an effort to drive up social conservative turnout in the next election cycle, hoping that the increased turnout will help their Senate candidates, in much the same manner that the gay marriage amendment helped Republican candidates a few years ago.
 
Never mind that a constitutional amendment is not necessary. Never mind that it could not be voted on until November 2010, and then if it passed, could not be implemented until late 2011—costing Kentucky jobs and doing further damage to our industry in the mean time. Never mind that out-of-state casinos will pour in tens of millions of dollars to defeat an amendment, and will once again make Senate Republicans the biggest defenders of out-of-state casinos. Never mind that the time for an amendment has come and gone, and that the industry desperately needs immediate statutory action.
 
None of these things matter, because it is clear that Senate Republican leadership is not really interested in helping the horse industry. Rather, they are only interested in helping themselves, by trying to hold onto whatever power they can in Frankfort. Senate Republicans seem determined to play political games with thousands of Kentuckians’ livelihoods, and their retention of power and privilege has trumped all else. It is truly disheartening that a handful of Senators have decided that retaining their political power is more important than helping our entire state, helping our signature industry and protecting the jobs of 100,000 Kentuckians.
 
As a lifelong Republican, I am hopeful that rank and file members of the Senate caucus will rise up against their cynical leadership, and act in the best interest of Kentucky by supporting an immediate statutory solution that will enable our signature industry to fairly compete with our out of state competition.
 
Bill Farish
General Manager, Lane’s End Farm

KEEP just released an editorial in response to KY State Senator David Williams’ criticism of the Thoroughbred industry’s desire for alternative gaming in Kentucky. Are you moved by this editorial? Where do you stand on the slots issue and have any of the recent editorials changed your mind one way or the other? The Paulick Report wants to know. - Bradford Cummings

In a recent response to an editorial by Bill Farish entitled, “Gambling, Not a Partisan Issue,” Sen. David Williams continued to attack Kentucky’s horse industry in a misguided attempt to divide and conquer horsemen.
 
What Sen. Williams doesn’t understand is that his attacks only further cement the unity among our industry to seek alternative gaming at racetracks. The horse industry is more united today than at any time in our history because we understand the enormity of the threat posed to our competitiveness. We live it every day as we watch our racing dates eliminated, our purse money decline and owners and trainers ship horses to states where purses and breeder incentives are enriched by gaming revenue.  
 
Sen. Williams began his editorial by saying expanded gaming is “bad economic policy for the state and for the horse industry.”  I firmly disagree. Isn’t it bad economic policy for the state to stand by while its signature horse industry declines because we lack the competitive tools other states are using to capture what Kentucky already has? Kentucky has a horse industry that is world-renowned for its product. It generates a $4 billion economic impact. It supports 100,000 jobs statewide. But in the end, Kentucky’s bond with the horse cannot be measured by mere economics. It is that intangible that makes Kentucky unique.  
 
Let’s take Sen. Williams’ points one by one.
 
Sen. Williams says, “expanded gambling will flood Kentucky with funds that will skew our body politic.”
In his response, Sen. Williams calls into question the Farish family’s affiliations and makes mention of political corruption in other states where gaming is allowed. This personal attack on the Farish family is an all-time low point in the gaming debate and will not go unanswered.
 
The Farish family has a long history of public service and staunch support of the Republican Party.  William S. Farish served as United States Ambassador to the Court of St. James under President George W. Bush. His son, Bill, served as a personal aide to President George H.W. Bush. Both father and son are lifelong horsemen who are actively involved in all aspects of Thoroughbred racing and breeding. From their development of Lane’s End Farm into one of the world’s premier breeding operations, to their service with the American Horse Council, the Breeders’ Cup, The Jockey Club, the Kentucky Thoroughbred Association, the National Thoroughbred Racing Association and Thoroughbred Owners & Breeders, their commitment to the horse industry cannot be questioned.  
 
Sen. Williams says that once slots arrive, horse owners and trainers will get the short end of the stick.
If alternative gaming is not growing purse money at racetracks in those states where it is allowed, then why are Kentucky horsemen shipping to Pennsylvania, Indiana, West Virginia and Louisiana, among others?  
 
Total purses in Kentucky have been stagnant or have declined since 2001. In contrast, Thoroughbred and Standardbred purses in Pennsylvania jumped nearly 40 percent from 2007 to 2008, the first full year of gaming operations. Indiana’s Hoosier Park just announced its second purse increase of the current meet. Louisiana racetracks such as Evangeline Downs and Fair Grounds are enjoying resurgence. Gaming revenues are up 5.5 percent at Florida’s Gulfstream Park compared to 2008; while Calder Race Course will open its gaming operation in 2010.
 
The horse industry’s plan to authorize video lottery terminals (VLTs) at Kentucky racetracks was the most comprehensive show of support for the entire horse industry—both racing and non-racing breeds—ever to be introduced in the United States. Though purse supplements for Standardbreds, Quarter Horses and Thoroughbreds are the most visible allocation, revenue would be broadly distributed to enhance many Kentucky equine breeds and related programs.
 
Gaming funds would expand the Kentucky Breeders’ Incentive Program (KBIF), which offers economic incentives to encourage ownership of all Kentucky-bred horses, even non-racing breeds. As an example, since it’s inception in 2005 the KBIF has fueled dramatic growth in Kentucky’s Quarter Horse industry, attracting 600 new Quarter Horse stallions, more than 2,000 mares and an influx of new Quarter Horse farms.
 
Our proposal also dedicates revenue to promote the health and welfare of horses by funding new equine facilities and riding trails; it will enable improvements to the backside and stable areas at racetracks; properly fund the Kentucky Horse Racing Commission and repeal a sales tax on feed and equipment for horses—an exemption already bestowed on other Kentucky livestock.
 
Though he would like to convince you otherwise, Sen. Williams’ plan is not a “horse industry” proposal. Under it, he addresses only purse money; contributing nothing to the KBIF or non-racing breeds. His proposal would redirect to the horse industry $19 million in existing tax revenues that currently go to the General Fund, which is already suffering a shortfall. He would place a 10-cent tax on lottery tickets, so your $1 lottery ticket would cost $1.10. The Kentucky Lottery Commission estimates this tax would result in significant lost lottery sales, which would adversely affect our children since all the funds go to funding the Kentucky Educational Excellence Scholarship (KEES) program.
 
Sen. Williams says slots will not “save” Kentucky’s budget.
Kentucky’s horse industry has never made the claim that expanded gaming would be the silver bullet to Kentucky’s budget shortfall. However, what our proposal would do is generate at least $700 million in new revenue, including more than $200 million in new tax dollars for the state, and be a source of new jobs and new capital construction.
 
Sen. Williams says the horse industry is beset with problems endemic to the industry itself.
The horse industry competes with an explosion of casino gaming nationwide. Today, 36 states in the continental United States permit commercial, Indian and/or racetrack casinos.
 
Kentucky racing is battered by casino gaming forces on two fronts. First, we directly compete with six Indiana riverboats on our border, where $1.44 billion was wagered in 2008. Casinos also line Kentucky’s border with Illinois, Missouri and soon Ohio. These casinos, which include the nation’s largest riverboat, the Hollywood Casino near Lawrenceburg, are situated to take advantage of Kentucky’s major population centers.
 
Even more damaging to our competitiveness, each of the 12 racing states nearest to Kentucky—Arkansas, Illinois, Indiana, West Virginia, Louisiana, Florida, Maryland, Delaware, Pennsylvania, New Jersey, New York and Ohio—are using expanded gaming to strengthen their horse industries.  
 
We don’t view alternative gaming as a long-term fix for Kentucky’s horse industry. Instead it will provide us with a short-term infusion of revenue we can use to spark economic development in our industry. These funds will help us compete, in the immediate future, by allowing us to raise purses and preserve Kentucky’s year-round racing circuit, renovate infrastructure, explore new marketing ventures and employ new technologies in an effort to attract new fans.
 
Alternative gaming at Kentucky’s racetracks will not change the behavior of Kentuckians. They already spend more than $670 million at riverboat casinos in Illinois and Indiana alone.
 
Sen. Williams, however, continues to stir the pot by stating that Kentuckians will have to “gamble” $11 billion to produce the $1 billion net win the horse industry proposal projects. As Sen. Williams knows, this is absolutely not true. He conveniently misuses this figure to confuse and concern. In reality, “churn”—whereby players repeatedly use their winnings to continue play—will account for most of that $11 billion gross wager. We are not asking any Kentuckian to gamble a single dollar that they are not already gambling. We are, however, asking that if they choose to gamble, they do it in Kentucky to help our own people. We don’t want a government subsidy!  What we want is a level playing field. If we get this we will out-work and out-produce our competition and remain the “Horse Capital of the World”!

Earlier this week, we were the first to publish Bill Farish’s editorial on why slots were an important step in give aid to Kentucky’s horse industry. Claiming that as a Republican this shouldn’t be a partisan issue but instead a Kentucky issue, Farish took Senate President David Williams to task over his divisive tactics of pitting Republicans against Republicans.

Late last night, the Paulick Report received an email response to Farish’s editorial from Williams. While 7:45 on a Friday night is generally a slot relegated for the announcement of John Edwards’ love child, we felt it important to give both sides of this issue a proper hearing. What follows is the counter argument to the pro-slots lobby. Where do you stand? -

 

I never cease to be amazed by the manner in which slot interests and their spokesmen such as Bill Farish continue to mislead Kentuckians. The proposed expansion of gambling in Kentucky is bad economic policy for the state and for the horse industry.  Those tied to the slots may do their best to raise the specter of false divisions and false hope, but the reality of the situation is unchanged.
 
Fact #1: Expanded gambling will flood Kentucky with funds that will skew our body politic.
Bill Farish failed to mention his family’s financial affiliation with the tracks as well as to the 527 “issues” group formed by the tracks and their supporters to circumvent campaign finance laws in order to intimidate legislators to support slots.  During the recent special election, his pro-slots 527 ran negative ads that never even once mentioned slots.  State after state with gambling in the mix has been rife with stories of political corruption.
 
Fact #2: Once slots arrive, horse-owners and trainers will get the short end of the stick.
In Florida, horsemen have complained that their promised doubling of purses has never materialized.  In Ohio, under the Governor’s executive orders, owners were left to their own devices to negotiate purses with the slots people.  In West Virginia, purse money was shifted back to state government to make up for shortfalls.  And in Kentucky, have we forgotten the bitter battle waged by Churchill Downs attempting to force our horsemen to accept a smaller slice of the revenue from Internet bets?  Or the fact that Churchill Downs pays to transport horses to its own Arlington Park in Chicago in direct competition with Ellis Park?  Once slots come in the picture, players will thrill to the speed of the machine and ignore the speed of our ponies.
 
Fact #3: Slots will not “save” Kentucky’s budget.
Gambling is an unstable source of revenue.  In spite of gambling, Illinois raised taxes.  Hardly a session has passed without Indiana’s casinos and racinos asking for yet another tax break. And gambling revenues are in a decline nationwide sending governments addicted to them scurrying for additional funds.
 
Fact #4: The horse business is beset with problems endemic to the industry itself.
The horse industry acknowledges that it breeds too many horses and runs too many races in a national economy that is fragile.  Racing fans are growing older.  The industry’s weak marketing has done little to help.  Very few people these days have the discretionary cash to plunk down a cool million for a horse, or even tens of thousands of dollars.
 
During the Special Session in June, Senate Democrats and Republicans unanimously passed legislation that would have nearly doubled funding for the Kentucky Thoroughbred Development Fund and actually doubled funding for the Kentucky Breeders’ Incentive Fund without slots.  Our plan would have kept the KEES scholarship program whole and not hurt charitable gaming.  It would not have used any General Fund dollars.
 
The House plan would have forked over more than 50% of the revenue to the tracks and massively undervalued the license fees the tracks would have had to pay.  All businesses are suffering in this economy, yet the tracks insist that they and they alone deserve special treatment.
 
When the House introduced its gambling bill during the 2008 session, committee members were mysteriously replaced in order to ensure passage.  The 2009 version was heard in a committee that didn’t even allow the opposition to testify.  Finally, with the addition of over $1 billion worth of projects the bill barely passed during the Special Session. It was a far cry from the fair hearing the bill received in the Senate committee where both sides were allowed to air their views.
 
The House plan relied on Kentuckians gambling a whopping $11.9 billion – a figure that represents five times more than what is currently wagered at the tracks, at out-of-state casinos, and through charitable gaming.  Where are these players going to come from?  With gambling already in many of our sister states, slots will only cannibalize our own people — our most vulnerable sacrificed for what a horse industry insider, Ray Paulick, calls a “band-aid” solution.
 
We need to explore all the ways Kentucky horsemen can control their own future because as Churchill Downs trainer Michael Lauer recently noted, “…once the tracks get the slots, the horsemen become secondary citizens.”  I respectfully would amend that quote to include all Kentuckians.

By Ray Paulick
I’m one of those folks who like to bet on horses. During my infrequent trips to Las Vegas, the only gambling I do is at the race books. I’ve gone to riverboat casinos, gambling barges, slots parlors at racinos, poker rooms and Native American tribal lands that offer casino gambling simply to get an idea of what the places are like, the kind of crowds they attract, and what type of competition horse racing faces. I’ve never dropped a penny, nickel, dime or quarter into a slot machine, or even bought a lottery ticket. Those things just don’t interest me.

In a perfect world defined by me, people would still have to travel to Las Vegas or Atlantic City to get their gambling jollies. That’s the way it was until April 1, 1991, when the state of Iowa—not exactly known as a gambling mecca—opened the floodgates and launched America’s first state-sanctioned floating casino onto the Mississippi River. It’s taken less than 20 years since then for the landscape of our country to dramatically change.

Where are we today? Eighteen of the largest 20 metropolitan areas of the United States are within a three-hour drive of a slot machine or blackjack table, the lone exceptions being Atlanta and Dallas-Ft. Worth. During a summer cross-country drive, I was stunned at the places that now offer gambling, either through casinos legalized by the state or on Indian reservations made through state compacts in the wake of the federal Indian Gaming Regulatory Act of 1988. It made me feel like a stranger in a strange land.

All of this new competition has had an enormous effect on horse racing. Many state legislatures have recognized the competitive imbalance the racing industry faced and enacted measures to “level the playing field.” In most cases, those measures allowed tracks to install Video Lottery Terminals, or slot machines, the most popular form of casino gambling. Those are the “have” states in horse racing: places like Iowa, Delaware, West Virginia, Indiana, Louisiana, New Mexico, Pennsylvania, Oklahoma, Florida, New York and Maryland either have or will have slot machines for an additional revenue stream divided among state government, racetracks and horsemen.

The racing states without these additional forms of revenue, the “have nots,” have suffered: Kentucky, California and Illinois, to name a few. Residents of California have numerous Indian casinos with thousands of slot machines to siphon off potential horse racing gamblers. Illinois has casino “boats” throughout the state. Kentuckians have plenty of gambling choices, too, via a short drive across the state line into Indiana, Illinois or West Virginia. In Kentucky’s case, it’s not only hurt racing, but the breeding industry at its foundation, along with the state budget and the many programs that are in need.

Because of the massive expansion of gambling, VLTs, slot machines or casino wagering has become an economic necessity for racetracks across America (an enlightened Canadian government long ago gave the Ontario Jockey Club the right to compete with casinos at Woodbine). It’s not something I really want to see or particularly enjoy; in my world, racing would be able to survive on its own. But guess what? It’s not my world.

Critics have said slot machines are just a Band-Aid to what ails the sport—and it’s hard to argue that point. But aren’t Band-Aids used to prevent patients from bleeding to death while doctors try to heal the wound? I suggest this industry will bleed to death in some states, including Kentucky, without this help.

Others who oppose the legalization of slot machines say racetrack management is not to be trusted, another good point, given the fact that many tracks are now owned by publicly traded casino companies whose sole interest in racing is in its key to unlocking the casino door. That’s why the late President Ronald Reagan often repeated the phrase “trust, but verify,” when dealing with countries that had a different agenda or priority than ours. In other words, horsemen must be vigilant in dealing with legislators and regulators, get things in writing, and leave nothing to trust.

What’s been missing from the debate in Kentucky over slot machines is a vision for the future of the racing and breeding industry. How will racetracks use their newfound revenue to heal a bleeding patient? Are higher purses all that’s needed, or will tracks be required to invest in marketing the sport of racing, or to modernize their facilities? Will horsemen and tracks work together to readdress a business model that isn’t working, or to lower the takeout and make the game more affordable and attractive to gamblers who have more wagering options than ever before?

The enlightening commentary by Bill Farish of Lane’s End Farm published yesterday demonstrated the resolve that most in Kentucky’s Thoroughbred industry now have to overcome the politics that have prevented a leveling of the playing field with tracks in other states. What’s needed now is a comprehensive plan for how this proposed new revenue would make this sport one on which more fans will want to bet.

 

 

Copyright © 2009, The Paulick Report

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Two months ago, the Paulick Report featured the headline REPUBLICANS VS. REPUBLICANS regarding the 527 group started by Will Farish of Lane’s End and Bill Casner of WinStar Farm. Despite both being prominent and generous donors to the Republican Party nationally and locally, they found themselves strange bedfellows with Kentucky Democrats as they helped Robin Webb squeak past Jack Ditty in a State Senate special election in late August.

What created this unusual alliance? Kentucky Republican leadership has decided to champion the anti-slots viewpoint and subsequently leave Kentucky breeders, owners and racetracks at a disadvantage to neighboring states like Indiana and West Virginia. Bill Farish, the son of Will Farish and the chairman of the Breeders’ Cup and former personal aide to George Bush Sr., makes the case that Senate Leader David Williams and others are not pitting Republicans against Democrats but instead pitting Republicans against Republicans in the ultimate display of “eating your own.”

His accurate statement that the industry has never been more united and his call for bipartisanship among Republicans, Democrats and Independents is an earnest effort toward giving the Kentucky Thoroughbred industry equal footing with those in other states.The Paulick Report hope his editorial does not fall on deaf ears. - Bradford Cummings

By Bill Farish
For almost two decades, Kentuckians have been debating the merits of expanded gaming.  As our signature racing and breeding industries have become increasingly threatened by our neighboring states, who use revenue from gaming to substantially increase race purses and breeders incentive funds, Kentucky residents have responded with a near unanimous belief that we must do everything possible to protect Kentucky’s horse industry, and the 100,000 jobs that go with it.
 
A recent statewide poll indicated that nearly 70 percent of Kentuckians support putting video lottery terminals (VLTs) at Kentucky racetracks.  That such a large majority of Kentucky residents would agree on what had been a controversial issue is striking, and speaks to our collective belief that Kentucky’s racing and breeding industries should be put on a level competitive playing field.
 
Sadly, those who oppose VLTs at racetracks, and who have clearly lost in the court of public opinion, have decided to engage in cynical rhetoric meant to divide our state instead of uniting it.
 
Senate President David Williams has made it clear that he intends to make protecting our signature industry a partisan issue.  After making a promise to every Kentuckian that the issue would receive a fair hearing in the Senate, Sen. Williams sent it to a committee where the chairman declared it dead before even hearing testimony.  Imagine going on trial and the judge declares you guilty before your lawyer even makes an opening statement.  Would you consider that a fair hearing?  
 
Now, in an effort to inject partisan politics into the discussion, Sen. Williams has attacked Gov. Beshear and other Democrats for “poisoning the well” in Frankfort.  Sen. Williams also seems to suggest that Republicans should oppose VLTs at racetracks as a tenet of our political philosophy.  As a life-long Republican, and a member of a Kentucky family that has worked on behalf of the Republican Party and Republican administrations, I can say without reservation that protecting our signature industry is not a partisan issue.  In fact, the Republican Party should be standing up for Kentucky businesses, Kentucky jobs, and a free market environment that would allow Kentuckians to fairly compete with their out of state competitors. Due to Sen. Williams’ utter mismanagement, this issue now pits Republicans against Republicans, not Republicans against Democrats, as he would have us believe.
 
Sen. Williams and several members of his caucus are currently advocating that the government should stand in the way of our signature industry, and prevent it from being able to compete.  Government interference with Kentucky businesses and job creation does not sound like a Republican philosophy I am familiar with.  But regardless, saving 100,000 jobs and the industry that identifies our state all over the world does not rest in the domain of any political party. It should be the stated goal of all Kentuckians—regardless of political registration.
 
The other strategy currently being employed is similarly distressing.  Opponents have decided that the best way to defeat VLTs at racetracks is to pit horse owners and breeders against racetracks.  By suggesting that racetracks are greedy corporations that don’t care about our horse industry, our opponents lay bare their belief that our industry must be divided in order to be defeated.  In ramping up his rhetoric, Sen. Williams has made it clear that he intends to demonize Kentucky racetracks at every turn.
 
The horse industry is as united as it has never been in the past.  Opponents of VLTs have always relied on our discord to defeat the efforts to compete on a level playing field.  Now that the industry has formed a united front, opponents seek to break us apart again.  They will be unsuccessful in their efforts to do so.  Kentucky breeders recognize that we must have a healthy horse economy in this state in order to run successful breeding operations.  A healthy horse economy includes buyers willing to invest in our product and take their investment to the racetracks in the hopes of recouping their investment. Owners recognize that they need healthy racetracks offering good purses, so that they can attempt to win back some of their initial investment.  Racetrack operators understand that they need breeders to produce and owners to race their horses at their tracks.
 
We are all in this together, and the attempt to break us into factions is disheartening.  A fractured industry cannot survive, and a failed horse industry would be catastrophic for Kentucky’s economy.  Sadly, Sen. Williams seems less concerned about helping our industry, and more concerned about maintaining control over his Senate fiefdom.   
 
However, as a new legislative session approaches, we will stand together, Republicans and Democrats, owners, trainers, breeders, racetracks, and the 100,000 Kentuckians who rely on the horse industry to make a living.  We will continue to hold our elected officials accountable, and we will not stop working until our state government gets out of the way and allows us to have the tools necessary to compete.

That’s fine, but what on earth were they thinking when they set those prices? (And, yes, I know, there was a meltdown in the economy in September, just a little over a month before the Breeders’ Cup. But it was clear before then ticket sales were slow in reaction to the high prices.)

The philosophy of selecting host sites has been an important subject of a Breeders’ Cup Strategic Planning Committee that has been meeting for the past several months. There is one camp that feels the event should rotate evenly among California, Kentucky and New York, and another that wants to see Kentucky on an every-other-year rotation with the two coasts. There also may be those who want to establish a permanent site (with some suggesting an expansion of Keeneland would be tied to that decision to make the Lexington track a permanent host). Yet no one (other than some Californians perhaps) seems to like the idea of back-to-back Breeders’ Cups at Santa Anita Park on the Pro-Ride synthetic main track. But that’s what we have, and there already are repercussions, with Jess Jackson saying there is no way he will run Preakness-winning filly Rachel Alexandra in this year’s Breeders’ Cup.

Who thought that was a good idea?

Finally, much has been written and said about the move last December to eliminate the stakes supplements that have been part of the Breeders’ Cup since its inception. The outrage that led to a reversal of the decision seemed not so much based on eliminating the program, but on the timing and manner of how the decision was made—namely, in a vacuum.

It’s this “we know what’s best for you” philosophy and the kicking and screaming against transparency (board meetings without published agendas, minutes or attendance records for those meetings that are not made available, promises of complete election results but delivery of only partial vote counts) that may have led so many Breeders’ Cup nominators to vote against incumbents and associates of the “old guard” or “status quo” candidates in the recent election of Members and Trustees.

I encourage those who were newly elected, along with existing Members and Trustees who believe a change in leadership would benefit the Breeders’ Cup, to vote for the following candidates in the board of Directors election: Tom Ludt of Vinery, Clem Murphy of Coolmore/Ashford, Richard Santulli of Jayeff “B” Stables, John Sikura of Hill ‘n’ Dale, Oliver Tait of Darley, and Duncan Taylor of Taylor Made Farm and Sales Agency. It’s my belief they represent positive change for the future of the Breeders’ Cup.

Let me repeat what I wrote about these six candidates last week. They are very strong candidates who bring a diverse set of skills and industry and/or outside business experience. Santulli and Sikura were rebuffed in last year’s election, which outraged many breeders who recognize both men for their intellect and commitment to this industry. Santulli has an extraordinary reputation in the business world, and Sikura is widely respected as a man with, as the saying goes, “skin in the game,” and a no-nonsense approach to getting things done. Murphy and Tait represent the two largest farms with the greatest global vision and would be a great asset to the board of Directors as the Breedrs’ Cup seeks to expand internationally. Ludt has demonstrated independence and a common-sense approach to analysis and problem solving in various industry leadership positions, and Taylor is one of the brightest marketing people in the Thoroughbred industry today who has a compassion  and drive to see the industry  reconnect with the public.

Reynolds Bell, G. Watts Humphrey Jr, and Robert Manfuso, who are running for reelection, have been a part of the leadership that’s been involved in some of the questionable decisions of the recent past. It’s time for them to be replaced. The fourth candidate running for reelection, Don Robinson, only recently joined the board after the resignation of B. Wayne Hughes. I have heard nothing but good things about Robinson and how he conducts his business at Winter Quarter Farms. He was, however, appointed to the board by Bill Farish, the Breeders’ Cup chairman who is said to dole out committee chairmanships and other appointments with the expectation that those he favors remain loyal to him when push comes to shove.

And there’s some pushing and shoving going on right now in the scramble for those six open board seats. 

Copyright © 2009, The Paulick Report

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