Posts Tagged ‘thoroughbred horsemen’s association’

By Ray Paulick

The National Thoroughbred Racing Association announced a series of sweeping safety and integrity reforms and the hiring of a former governor and Bush administration official during a press conference in New York this morning.

The reforms, organized under the banner of the newly created NTRA Safety and Integrity Alliance, touch on a wide range of issues that have been bubbling under the surface for years but came to a head this spring in the wake of the death of the filly Eight Belles in the Kentucky Derby, the revelation that Derby winner Big Brown won while racing legally on anabolic steroids, and a damning Congressional hearing that left industry leaders red-faced and fearful of federal action. The reforms and the creation of the Safety and Integrity Alliance evolved over the last several months from a series of closed-door meetings and a confidential discussion document circulated throughout the industry and published in the Paulick Report in July.

The Alliance, to be funded by the financially challenged NTRA, consists of racetracks, owners, breeders, horsemen, jockeys, auction companies, veterinarians, fans, regulators and breed registries. The NTRA has retained the services of former Wisconsin Gov. Tommy Thompson, who also served as secretary of the Department of Health and Human Services for President George W. Bush and made a brief run for the 2008 presidential nomination of the Republican Party. Thompson will be charged with independently monitoring the program and annually providing public reports on the progress the Alliance has made in meeting its goals.

Thompson, incidentally, attended the 2005 Kentucky Derby and later joined a West Point Thoroughbred partnership that owned Flashy Bull, who was unplaced in the 2006 Derby but subsequently won the Grade 1 Stephen Foster at Churchill Downs. According to West Point president Terry Finley, Thompson "loves the racing game" and is in a partnership that currently owns a West Point 2-year-old named Tapit’s Brew.

Click here to read the complete text of the NTRA Safety and Integrity Alliance and Pledge.

For a list of tracks and racing organizations that have agreed to the pledge, click here.

Following is the NTRA’s press release on the formation of the Safety and Integrity Alliance and the hiring of Thompson as an independent monitor.

• uniform medication rules for each racing state
• ban of steroids from racing competition
• out-of-competition testing for blood and gene doping agents and pre-race testing
• uniform penalties for all medication infractions
• mandatory on-track and non-racing injury reporting
• mandatory installation of protective inner safety rail
• mandatory pre- and post-race security
• adoption of a placement program for Thoroughbreds no longer competing

Alan Foreman, CEO of the Thoroughbred Horesemen’s Association, laid it on the line in discussing the industry’s real and perceived problems regarding medication and drug testing at Sunday’s Jockey Club Round Table in Saratoga Springs, N.Y. Foreman identifies the problems facing the Thoroughbred industry relative to medication and testing and also provides a roadmap for how to address those issues.

Foreman’s talk was one of many presentations on a day that focused on medication and safety issues of the racehorse in the wake of the death of Eight Belles in this year’s Kentucky Derby and a subsequent Congressional hearing where the threat of federal intervention was raised. I’ll have my own commentary on these issues in the days to come.

Following are the remarks of Alan Foreman, in their entirety. — Ray Paulick

Last year’s Conference focused, in part, on the scandals plaguing other major sports arising from the use of performance enhancing drugs. I was unhappy and a bit perplexed because I thought we had a positive story to tell and that we could distance our sport from the others. I took particular exception, on behalf of the thousands of horsemen who dedicate themselves to the welfare of the horse and the integrity of our sport, to the suggestion that horse racing is consumed by a raging wildfire of illegal drugging.

Unlike the other sports, we do not allow our athletes to medicate themselves for headaches, backaches, joint pains, broken bones and cuts on the day of and during competition to allow them to compete. Our athletes aren’t sent to the sidelines or the locker room for treatment in order to return to competition.

Except for the controlled use of Lasix, we are a sport that does not allow our athletes to compete with drugs in their bodies. We have a supposedly world-class detection system designed to deter anyone who would corrupt our competitions with performance enhancing drugs. 

We spend $30 million annually to support drug testing, more than any other sport. We have dedicated scientists who test thousands of urine and blood samples collected from horses each day and who study the pharmacologic effects of drugs on horses, all in an effort to insure that our sport is clean.

Nonetheless, there was a larger message conveyed here last year. Polling of racing’s core fans, done in the midst of the scandals plaguing other sports, showed that one-third of them believed that racing also had serious integrity problems and that illegal, performance enhancing drugs was the number one problem. 

We were warned that the lack of consumer confidence in the integrity of our product could cause irreparable damage. I dismissed this perception as a reflection of the time.

Not long after last year’s Conference, we moved in a highly publicized and somewhat controversial way, to restrict or prohibit the use of steroids. It was the right thing to do, but it exposed many of our problems. And then there was the EIGHT BELLES tragedy. The ensuing furor unleashed every negative perception and stereotype about our sport. The reaction was visceral. In its wake, recent polling done of casual fans of racing, our core fans and those within our industry has revealed an alarming increase in the negative perceptions reported last year. Of those, the perception of illegal drugging is by far and uniformly their single biggest concern. 

Yes, we are a sport that has and always will be confronted by those few who disregard the well-being and integrity of our sport for short term gain. However, in the court of public opinion, which in today’s world is the only thing that truly matters, the perception is that our sport is not clean. In today’s world, perception is reality no matter how unfair or inaccurate that perception may be.

I wasn’t born yesterday. The negative perceptions of our sport have always been there. But not in the significant numbers that we are now seeing, regardless of how we defend ourselves. The simple fact is, we are living in a different world than we have known. Communication is instantaneous and opinions are formed instantly. Standards and expectations are higher and the margin for error is lower. There are few gray areas anymore. Judgment is no longer reserved. Perceptions are difficult to change. If our brand, our great sport, is to survive this rough patch and restore itself to its previous glory, then we have to substantively address the issues that concern our consumers and our fellow participants. It is expected of us. And, we have to do it now, because we do not have the luxury of time. Anyone who doesn’t believe we are in trouble is in denial. We cannot talk our way out of our problems and we cannot take steps that are perceived as mere window dressing.

Can we reverse the negative perceptions of our sport, particularly as it relates to the perception of rampant and illegal drug use? Can we truly say that our sport is clean? I think we can and I am going to suggest to you how we can do it. But we had better move quickly. 

The first step is to acknowledge the problem.   We spend approximately $30 million annually on drug testing, but that funding is spread among 18 different laboratories servicing 38 racing jurisdictions. The dollars are not spread evenly. 

There is a wide variation among our laboratories in the number and types of tests performed on test samples. Even our best don’t have the resources to do the testing that should be done. 

In 1989, when the industry was far healthier, we spent $27.6 million on drug testing. So we’re basically spending the same amount on drug testing as we did 20 years ago, while much has changed.

This is not new information. Scott Waterman told you this last year. The difference this year, and for the foreseeable future, is that our federal and state governments are in economic free-fall.

Our laboratories operate by virtue of written contracts with state governments, state or land-grant universities or through private companies who bid for our work through a procurement process that rewards the lowest bidder. Budget cuts in the face of enormous deficits mean inevitable cuts for drug testing of race horses. 

What politician would rather allocate money to drug testing of race horses rather than fund health care, education or other taxpayer needs? What laboratory doing drug testing for horse racing right now isn’t facing significant budget cuts?

This, in the face of an industry- imposed steroid policy that requires our laboratories to do a whole new level of mandatory testing without the funds or equipment to do it.   Simply put, our system worked decades ago. It won’t work now if we are intent on restoring consumer confidence without major changes.

We have too many laboratories feeding off the same revenue stream. They are understaffed and lack the necessary equipment that will allow us to do what we need to do.

We have little, if any, research and development underway, nor are we preparing for the “future” generation of drugs, which may, in fact, already be upon us.  For years, we have been consumed with concerns about tranquilizers and therapeutic medications that have been around for decades. 

While we should certainly be chasing all drugs that have the potential to affect performance, there are a new generation of doping agents entering the world of sports unlike anything we have seen before—genetic manipulators—and we are unprepared. We have neither the resources nor the mechanism to address this emerging threat.

This leads me to something that no one has talked about, but which poses a major problem for the future of our sport. The names Maylin, Soma, Tobin, Sams, Stanley, Lomangino, Strug, Hyde, Lorimar, Uboh to name a few, are synonymous with equine drug testing and pharmacology in this industry. They have been our Army, Navy, Air Force and Marine Corps. 

They have been our scientists leading the integrity battle.   They are the unsung heroes of our sport. They would be the first to tell you that they could do better with more money, better equipment and more staff.

However, there is going to come a time when they are no longer available to us. There is no bench. There is no farm system. There is no talent pool waiting in the wings to do our critical work. We are unable to compete with private industry nor do others want to work within the constraints of government or university bureaucracy.

Basically, we are not training the next generation of scientists to do drug testing and be our experts in blood doping, gene manipulation and other emerging threats.

Well, I think you get the picture. Can we truly make the case that our sport is clean, which, by the way, I think it is, or succumb to the perception that we are not, when we can’t forcefully answer the question because our system is flawed?

Does anyone in this room dispute the belief that solving these problems is critical to the future of our sport? If we are going to change the perception of our sport and if we are going to restore consumer confidence in our brand, then we need to take substantive steps and I suggest the following:

1.       We need to establish a reference, research and testing laboratory controlled by the racing industry. We can no longer afford to be at the mercy of states and private entities for our testing and research needs. We’ve known of this need. McKinsey told us 20 years ago. The THA called for it 8 years ago. The RMTC has recognized its need. Yet, we’ve done nothing. We must explore the possibility of a public/private partnership or look at the feasibility of joining with our colleagues in the performance horse industry who share our problems, concerns and ideals. Whatever the case, we need to move on this and do it now, with specific and demonstrable timelines for implementation.

2.      We need to establish strict industry laboratory standards for drug testing in this country and implement them in the quickest and most practical means possible. These standards must address current technology, equipment, staffing, proficiency, number of tests, types of tests, minimum concentration levels and compliance. They should be established by our scientists who know of our needs–not horsemen, breeders, track operators, regulators or the federal government. Our scientists must be directed to create the standards for the best and most effective comprehensive state-of-the-art drug testing system for racing and we need to listen to them by implementing their recommendations. I ask the Jockey Club to support this effort and for the RMTC to begin this process immediately, with specific and demonstrable timelines for implementation.

3.      We need to consolidate our drug testing laboratory system and significantly reduce the number of laboratories conducting testing for the racing industry. A regional system makes the most sense. We must pool and reallocate the financial resources we now have within a new streamlined, stronger and more efficient system. We can accomplish this in the first instance by requiring any laboratory that intends to conduct drug testing for racing to meet the strict standards that are established for the industry. Those laboratories that cannot meet the standards should look for work elsewhere. I call on the Graded Stakes Committee to condition the grading and running of any graded race, and the Breeders’ Cup to condition the funding and running of any Breeders’ Cup related race, on drug testing being conducted for those races only by a laboratory that has met the new industry standards. Churchill Downs, Magna and NYRA need to do the same for the Triple Crown races. Eventually, this must cover all of our races at all of our tracks.   When appropriate, we will need to publicly identify those racetracks that do not have their testing performed by a laboratory that meets the new industry standards and demand their compliance. We need to require that all positive tests for which confirmation is requested be performed by one of the industry recognized laboratories. We will need the help of our regulators to make this recommendation a reality and we will look to the ARCI for its help.

4.      We need to invest in research and development now, before it is too late. This presents a perfect opportunity for a new racing research and reference center. We need to begin research into gene doping, gene manipulation and other emerging integrity threats. If laboratory mice can be injected with targeted genes with reported astonishing results, how long will it be before someone attempts to manipulate a race horse? If necessary, we need to contract this work to researchers and universities already studying this emerging problem. We need to look to partner our efforts with other major sports leagues who have begun to devote significant research dollars to doping concerns.

5.      We need to start developing a new generation of scientists — toxicologists and pharmacologists — who will lead our integrity efforts. On this issue in particular, we do not have the luxury of time. Given the importance of this issue to our overall integrity efforts, I am pleased that the THA will continue to lead by example. Eight years ago, the THA called for the creation of a national drug testing and research consortium that ultimately became the RMTC. We committed permanent funding for it when others were on the fence. Recently, the New York THA, working in partnership with the State of New York, allocated $500,000 from its revenues that would otherwise be dedicated to backstretch programs and equine research, to purchase the state-of-the art equipment necessary for the New York Equine Drug Testing Laboratory to conduct steroid testing and testing for the new generation of drugs. Today, the THA is pleased to announce that it will commit additional funds , and we ask every racetrack and industry organization to match our commitment, to recruit and support post graduate students interested in a career in equine drug testing and research. We will ask our experts and those conducting cutting- edge research to allow us to place interested students to work and learn beside them, and we will pay for it. What better way to invest in the future.

6.      The THA is going to ask the RMTC to revisit and recommend uniform withdrawal time guidelines based on existing and historic research. We can no longer get by with just publishing each State’s recommendations, which vary. We must eliminate positive tests. They give us a black eye, no matter that they demonstrate our deterrence system at work. Notwithstanding that most of our positive tests are the result of sloppy or errant administrations of therapeutic medications, to the public, a drug is a drug and there is no difference. All horsemen and veterinarians need to do their part by strictly adhering to these guidelines when published. 

7.      Finally, we need this industry to recognize the importance of, and the significant work performed by, the RMTC. It is the best organization we have ever had in racing on medication issues and policy. It has forged unprecedented and necessary collaboration among our scientific community. It is truly a national voice on medication. And, it is the best response to the threat of federal intervention.

It is always an honor to be invited to speak at this forum. However, I didn’t come here today to give a nice speech that my children and grandchildren can access in the archives of the Jockey Club’s website. I am here because I want to make a difference and encourage change. I thank the Jockey Club Safety Committee for giving me the opportunity over the past few weeks to express my views on this subject. I am encouraged by their strong interest. I am also encouraged by the positive response from horsemen across the country with whom I have shared these recommendations.

Everyone in this room is the steward of a national treasure, a great sport, a great tradition. What began as a sport more than a century ago is now a diverse and dynamic industry that is a part of the history, economy and social fabric of this country. 

But, we’re in the 21st century and the world is a vastly different place. We are clearly struggling to adapt. We have an obligation to preserve and protect this institution for our next generation. We are well known for arguing and disagreeing about everything. If we don’t address this drug testing issue now and let it become a catalyst for what can be a change in the perception of our sport, then we may not have anything left to argue about. I am willing to drop everything I am doing to make these recommendations a reality. I hope you feel the same sense of urgency. – Alan Foreman, CEO, Thoroughbred Horsemen’s Association

The racing industry is like a three-legged stool with the horseplayers and fans, owners and breeders, and racetracks and wagering companies comprising each of the three legs. Take one away and the stool collapses.

Horseplayers, as we all know, are the least organized, though some individuals from that group bet massive sums of money and can inflict economic punishment or rewards by shifting their action from one track to another.

Tracks are more organized than ever, largely because of the consolidation by Magna Entertainment and Churchill Downs, their respective wagering companies, ExpressBet and TwinSpires.com, and their joint venture simulcasting consolidator TrackMedia.

Owners and breeders are somewhere in between. Negotiation of purse and simulcast contracts with racetracks are negotiated by local horsemen’s groups (state division of the Horsemen’s Benevolent and Protective Association, Thoroughbred Horsemen’s Association, the Texas Horsemen’s Partnership, and Thoroughbred Owners of California).

Following the startup of TVG and other account wagering companies during the past decade, some of these horsemen’s groups began to notice a troubling trend. Increases in handle were being accompanied by a decrease in purses. The terms "leakage" was entering the racing vernacular and it was not the kind of leakage a package of Depends could help control.

This leakage of purse revenue was caused by multiple factors: more money was being bet off-track, with off-shore rebate betting shops and with fully licensed and state-regulated account wagering or advance deposit wagering (ADW) companies.

The economic pie (wagering on horse racing) was previously cut up with the biggest slice going to horseplayers, and the next largest divided equally between tracks and purse money for horse owners, and a smaller slice going to state and local governments.

A new player began bellying up to the table and demanding its own slice: account wagering companies.

The promise was that these companies were going to help bake a bigger pie and fatten everyone up. In truth, there has been only small growth in handle and more redistribution of wagering from on-track and inter-track to telephone and internet bets through account wagering companies. The net result is a reduction in the percentage of each dollar wagered ending up in purses for horse owners.

Some people think horse owners get enough in purse money already. I guess if you think a dollar invested should be rewarded with a half-dollar in return, you’re right. Horse owners put over $2 billion into the game each year so they can fight over $1 billion in purses. That’s not a very sound investment strategy.

Tracks were hurt by this trend, too, at least in the beginning and until they realized the need to operate the account wagering companies themselves.

State horsemen’s groups started talking to each other about this "handle up, purses down" phenomenon and formed a study group to seek solutions. Late last year, after determining that the economic business model for distribution of account wagering dollars wasn’t working, they decided to form a company, the Thoroughbred Horsemen’s Group, in an attempt to change the model.

Thoroughbred Horsemen’s Group counts 18 horsemen’s organizations among its members in 16 jurisdictions (California, Kentucky, Florida, Texas, Pennsylvania, Ohio, Louisiana, Maryland, Delaware, Arkansas, Virginia, West Virginia, Oklahoma, Minnesota, Indiana and Ontario).Collectively these groups negotiate contracts with 52 North American tracks.

Bob Reeves, a third generation horseman with decades of executive experience in the health, insurance and venture capital fields, is president of the TGH. He’s been head of the Ohio HBPA and that state Thoroughbred Owners and Breeders Association. TGH’s sole employee is Wilson Shirley, a consultant who formerly worked for the national Thoroughbred Owners and Breeders Association and Thoroughbred Owners of California.

Reeves and Shirley, on behalf of their member organizations, are negotiating with account-wagering companies to reshape the distribution formula from one that favors the wagering companies to one that puts more money into purse money, which will strengthen live racing and, ultimately, the racetracks themselves. "We are a shared resource," Reeves told the Paulick Report, in reference to the Thoroughbred Horsemen’s Group, which he called an "intermediary" in negotiations.

Sort of like William Shatner and Priceline negotiating with hotels for the best deals on behalf of consumers.

"We are trying to change the model to one that distributes the account wagering revenue based on a percentage of takeout instead of a percentage of handle," Reeves said.

Reeves said the Thoroughbred Horsemen’s Group has hired attorneys intimately familiar with anti-trust issues and is confident the organization is not in violation of the Sherman Anti-Trust Act. Churchill Downs Inc. has sued the Thoroughbred Horsemen’s Group, alleging violations of the Act.

The formulas for distribution of account wagering revenues are complicated. Account wagering companies first pay a host fee to the track and horsemen where the live race is being run on which a bet is placed. There sometimes is a source market fee, if the bet is made by someone who lives in a racetrack market. That fee is divided between the local track and purse accounts for that track. But more often than not, a bettor does not live within 25 miles, so the account wagering company pays no source market fee and retains the money as profit. That is where a big part of the leakage occurs. The net result is that the company handling the bet is getting more money than the horse owners who are putting on the live race on which the bet is made.

That’s like a retail store making more on a product than the manufacturer of the product. It’s backwards.

Naturally, the account wagering companies - especially those owned by the racetracks - don’t want to change the formula. The wagering companies see greater profits for themselves as more people stay home and bet rather than drive to a track or OTB. (And with $4-plus per gallon gas, that number could soar.) There have been stalemates in negotiations involving account wagering, which is why horseplayers were not able to bet by phone or computer on Churchill Downs, Lone Star Park, Calder and other tracks. Churchill reported large declines in handle and purses at their spring-summer meeting.

Horsemen won in their negotiations with Ellis Park owner Ron Geary, who threatened to close his track rather than change the previous account wagering structures. That victory should inspire the local horsemen’s organizations to stay the course in the current and upcoming negotiations. There may be short-term pain but remaining firm in their position will result in long-term gain.

"I am delighted with the resolve the different horsemen’s groups have shown," Reeves said. "We are trying to save racing." 

By Ray Paulick

Copyright ©2008, The Paulick Report