PAULICK REPORT FORUM brought to you by Breeders’ Cup: PEGRAM UNPLUGGED PART 1

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By Ray Paulick


You might beat Mike Pegram on the racetrack, but you’ll never stop him from having a good time. Pegram, who grew up in southern Indiana and cut his teeth at Ellis Park in Henderson, Ky., now is a self-proclaimed “West Coast guy” with homes in Del Mar, Calif., Arizona and Nevada. He developed a successful string of McDonald’s franchises, first in the Seattle, Wash., area, and later in Arizona, then got into the casino business in May 2008 with the opening of Bodines Casino in Carson City, Nev. He opened the Carson Valley Inn Casino in Minden, Nev., earlier this year.


As one of the co-owners of last year’s 2-year-old male champion and this year’s Preakness winner, Lookin At Lucky, Pegram, 58, is one of the most prominent and successful owners in the sport. Horses he’s campaigned have won, among other races, the Kentucky Derby, Kentucky Oaks, Dubai World Cup, and several Breeders’ Cups.


While the Preakness winner, a May 27 foal, is settled back into his home track at Santa Anita Park, Pegram, trainer Bob Baffert and jockey Martin Garcia will celebrate Lookin At Lucky’s “birthday” this Friday at Pegram’s two Nevada casinos. Meet and greet opportunities for racing fans are scheduled, first at the Carson Valley Inn Casino from 10:30-11:45 a.m., and then from noon-1:115 p.m. at the racebook in Bodines Casino.


His infectious laugh and good-natured approach to the sport may be his calling, but there is a serious business side to Pegram, and he makes no secret of the fact he is worried about the future of the sport he loves, particularly in California, where his racing operation is based. He spoke with the Paulick Report in a wide-ranging interview that will be presented in two parts. Part two runs next Wednesday.

Tell me a little about the promotion you’re doing this week to celebrate Lookin at Lucky’s “birthday.”

I’m kind of a new boy in town in the Carson Valley community I now live in, but the folks there have gotten so enamored with the horse. They said it was like a morgue when he got wiped out in the Kentucky Derby and the place absolutely erupted when he won the Preakness. I thought it was unique that he wasn’t even three years old yet. So I got Bobby and Martin Garcia to come over. We thought we’d give Carson Valley a little taste of horse racing. We wanted to put the human connections with the horse because these people supported us so much. It also will bring some awareness to racing, and I’ve never heard of a birthday party for a horse before. When you’re in the circus, you’ve got to get a new act now and then.

What is it about horse racing, despite all the current challenges, that keeps you going?

Boy, I’ve asked myself that question a lot recently. It’s the human element that you get in horse racing that you don’t get anywhere else. You’ve got racetrack characters like Fat Eddie (a constant presence at Southern California tracks). You’ve got the thing where the man with the most money doesn’t win. How many people have you seen come in and try to buy the game? Can’t be done. You have the Cinderella stories.


And then it all comes back to the horse. Every little girl you’ve ever seen always falls in love with a horse, and I guess we’ve all got a little girl in us. It’s a rush. I had so many people tell me they never saw me so happy when Lookin At Lucky won the Preakness. And you always feel better when it’s about someone else. Lucky got to show what he could do after not being able to do that in the Derby because of all the trouble he had. There’s nothing like seeing your kids do well–in little league, kids soccer, whatever. How proud they make you. You get the same feeling with a horse. You go out in the business world and deal with stuff, then you go to the racetrack and see the characters and you see the horses, and it brings that hope and sense of pride. That’s the reason I keep owning horses.


I’ve dug deeply on this. I’m wondering if I want to be the last one around to turn out the lights–especially in California. There’s only one thing that could ever get me to move out of the West—and that one thing would be horse racing.

What are some of the things about racing today that make you just shake your head?

Well, here we are in California. Hollywood Park announced a long time ago they will lock up. When that happens, you can give the dates to Santa Anita and Del Mar, but where are you going to put the horses? Nowhere. Who’s working on that? Try nobody. That’s one piece. Second piece: I’m tired of hearing Frank Stronach talking about the horsemen’s bill of rights. I want to hear about his 1998 plans where he was going to do all this grandiose crap.  That frustrates me. I don’t like having my future messed up by someone else.


I don’t know the man, but John Ed Anthony said at the Jockey Club Round Table in a speech he gave a long time ago, “I don’t where we’re going to be racing, but we’ll find a place, even if we have to watch them at a country track from the back of our pick-up trucks.” Truer words were never spoken, and here we are today and we are getting pretty close to backing up our trucks to the old dirt tracks and watching from there. There will always be horses racing, but it’s just a question of in what form.


Racing is an American tradition. I just don’t know how we screwed up an American tradition. There are some bright spots, but California is very, very troubling. There is no foresight on anybody’s part. There’s none on the Kentucky legislature’s part, either. You could not make up what’s happened in Kentucky. And why is that? One is Churchill Downs’ relationship with the state, and the other is that Keeneland is an associaton that always took the safe way. The last thing we need is someone playing safe. We need major changes for survival.

You and Los Alamitos owner Dr. Edward Allred made a proposal a few years ago to expand Los Alamitos and make it a viable replacement for Hollywood Park. Why did that fall on deaf ears with the California Horse Racing Board?

Two things happened there.  No. 1, we had a great plan and yes we got ignored. No doubt. No. 2, Doc Allred was upfront with me. He said he did not want Hollywood Park to close until they were ready to go. That was his personal sentiments. He did not want to lobby to take away Hollywood Park’s dates. That’s where me and Doc Allred differed in our opinions. I wanted to lobby the CHRB to take away those dates. I didn’t have anything personal against Hollywood Park, but it would have been the right to do.


That happened right after Hurricane Katrina. No one likes going to a graveyard. Everyone knows Hollywood Park is dead. They’ve stopped reinvesting. Hollywood Park has the same owners as Bay Meadows and the same thing happened up there: it just sat there. Horse racing became a joke in Northern California. There was no reinvestment, and handle and attendance went down.


It ain’t the economy killing Hollywood Park, it’s Hollywood Park killing Hollywood Park. What have our leaders done? They’ve said, “That’s OK.” And it’s not OK. Unless something happens quickly, California is going to be dead. You’ve got a man (Dennis Mills, the CEO of MI Developments, which now owns Santa Anita) that comes in and cancels the lease with Oak Tree, for his own personal gain. Not because Oak Tree did anything wrong. And everybody says, “That’s OK.” It’s not OK.

Your relationship with Bob Baffert goes back 25 years. What advice can you give owners about keeping an owner-trainer relationship alive for so long?

Treat ‘em like family. When you’re like family, it doesn’t mean you don’t have problems, but you learn from each other. Learn to understand. You’ve got to have the trust and the confidence and the belief in each other. When you have trust and confidence, it will get you through the bad times.


People are always going to have different opinions, but you live through those things. When you don’t have trust and confidence, that’s when things go sideways. I would never tell my kids or my brother how to run their businesses. Why would I tell Bobby how to run his business?

 
Did you have any input in the decision to run Lookin At Lucky in the Preakness and now not go to the Belmont?

I throw my two cents in on occasions, and may go a year without offering my two cents, then I may go four times in a week. There’s a time for stuff and when I do offer my opinion, there’s usually fact-based reasons I’m doing this. If there’s a tie, Bobby’s the one who is sleeping with those animals, not me. Fortunately, he needs the money more money than I do. That’s one thing about racing that’s right. At least it rewards success.

Where do you think we’ll see Lookin At Lucky next?

The Haskell will be the most logical spot. He could make the Belmont, but I remember  (Derby/Preakness winner) Real Quiet after the Belmont. He didn’t run for another eight months. I don’t want to see that.


Next Wednesday in the Paulick Report Forum brought to you by Breeders’ Cup, Pegram talks in detail, comparing horse racing to the customer service and entertainment-oriented businesses he’s run, and what he thinks horse racing needs to do to be more competitive.

Copyright © 2010, Ray Paulick

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  • john greathouse

    Mike is one of the BEST
    both as an owner but more more importantly as a human being!

  • John Califano

    I enjoyed reading this. Looking forward to Part II of your interview with Mr. Pegram next week.

    Best wishes to Lookin At Lucky, Pegram, Bob Baffert, and the rest of the connections for continued success

  • http://jmcevoyauthor.com John McEvoy

    Mike Pegram’s assessment of our current racing situation/quandary is one of most accurate ever.

  • MH

    Loved this comment:

    “…I guess we’ve all got a little girl in us.”

  • Zak

    Mike is one of the reasons we still plug along. Clarity of thought and not afraid to tell people the truth. What a rare combination in horse racing. Or any business for that matter.

  • NYC Horsefan

    Love this guy. Dead on.

    But once again – as we write and read – our sport gasps for air . . . .

  • MED

    What a great article and great guy. Racing needs a lot more owners like him.

  • William Webb

    I’ve seen Mike Pegram several times at Keeneland. He always has time to chat and share a laugh with the “little” people. Very much a class guy!

  • http://www.oldfriendsequine.org Michael Blowen

    Great article…Mike Pegram and Bob and Jill Baffert support one of their wonderful horses…Danthebluegrassman at Old Friends…Thanks…

  • FourCats

    “Two things happened there. No. 1, we had a great plan and yes we got ignored.”

    Mike seems like a good person. And he tried to revive racing in California with Los Alamitos. But, as he said, he was ignored. Therein lies the biggest problem. The racing establishment (by which I mean the racetrack owners, the racing commissions and the state governments) already view racing as dead. They don’t care about the sport, and they only think about short-term profits with slots (not long-term prosperity for racing).

    “Everyone knows Hollywood Park is dead. They’ve stopped reinvesting.”

    The fans are still there. Potential fans are still there. I believe that racing can go back to its glory days and more; but only if the people running it care about the sport and have the will to work hard to get us back there. Racing needs to be taken away from these people who only care about getting slots and given to people like Mike who love the sport and are willing to work hard to get it to prosper. But how’s that possible? Many people like Mike have talked about how to restore racing. And a few, like Mike, have tried to do so. But, “they were ignored”; which says it all.

  • Kathie King

    Mike Pegram is one of the neatest guys in racing. He loves his horses. My husband and I met him at the Gold Cup in KY years ago. He was the most personable man you could ever want to meet. Chatted for a half hour about racing and Silver Bullet Day. We had to implore him to go watch his horse get ready for it’s race, he was just chatting up a storm.

  • john g sikura

    Looking for someone to ‘run the show’ ,whats wrong with Mike Pegram. Brilliant in how he distills everything into common sense. He loves to bet, go to the races and puts up his money . No one is more deserving of a good horse. Its too bad California does not heed his advice. Final point, even a guy living in California sees the ineptness of Frankfort politics. jgs

  • Fred Pope

    Mike comes from a business structure where every detail is controlled. McDonald’s does not allow anyone to stray from their plan. He would not be the first franchisee I’ve seen that chafed from such control, but the financial benefits make it worth it.

    Racing today controls only 10% of its revenue from gambling. That’s the on-track amount. When off-track started, the host tracks could have controlled the distribution of the wagers on their races, but they didn’t. They let off-track bet takers at other tracks, otb’s, and now ADW’s to control it. Now, they can’t get it back by themselves.

    California racing was the best in the country before off-track, for all the normal reasons — most people, most money, best weather. But, with their destiny now controlled by out-of-state bet takers, their failure is predictable. If the California tracks could accept wagers direct, they could return to an on-track model and control 100% of their business and they wouldn’t have to worry about bet takers going bankrupt and failing settlement which leaves the host tracks (purse accounts) high and dry like NYOTB is now doing.

    Magna wants de-regulation in California, but they haven’t shown us they can make racing work at any of their locations. That’s because they continue to think the facility is the answer. The facilities are not the problem and not the solution.

    Monmouth is showing everyone that one part of the solution is the product —how it is packaged and presented. Unfortunately Monmouth cannot solve the other part of the problem because they have the same problem as California and every other host event, they cannot get anything for their product, so they cannot sustain their purse money from the handle bet on “their’ races.

    Oak Tree has been a model for how some guys can join together and form a racing association and lease a track facility, but as much as we all like Oak Tree, they do not package and present racing any different from how it is done at other tracks. If some guys and gals could put together an association and assure a track owner they would supply quality horses to run there, there should be a track owner who would listen.

    France is the McDonald’s of racing. Total control of everything top to bottom. They know how to produce a good product and how to control the distribution and pricing of it, which is the only way a business can survive and prosper. What makes France different from England, Ireland and North America — no off-site bet takers allowed. They just passed a national law banning BetFair. No, it will not hurt racing there. France enjoys a growing $6 billion in handle with just 4,500 races, versus our declining $12 billion with 54,000 races.

    We have the most powerful economy in the world and we are blind to what it can do for our sport. Mike and some like-minded owners are needed to join together and try again to package and present good racing, but this time not be building a track facility, just by controlling the show and leasing tracks around the country as needed.

  • Kelly

    Great piece Ray. What a great guy! Our sport needs more people like Pegram…more importanly, leaders who have his smart business sense and passion for the sport!!!

  • Chad K

    Fred Pope you are the man, plain and simple.

  • Mike

    Great piece Ray. How can you not love Mike Pegram. Just comes across as an absolute great guy.

    As far as a previous comment about France banning Betfair, isn’t that somewhat incorrect? Aren’t they now allowing outside bookmakers to take bets on their racing provided they’re licensed in France which Betfair at the moment isn’t? Rather than being banned, wouldn’t they just have to apply for a license?

  • Fred Pope

    #16 Mike, you might be right about France licensing some bet takers outside of France. They are asking 8%, where the international norm is to pay 3% to the host. Not familiar with any legal bookmaking on races in France, but maybe so.

    Here’s what Betfair Customer Service has on their site:

    “On 6 April the French parliament passed a law relating to online gaming which came into effect on the 13th May, 2010. This law prevents us from allowing customers to access http://www.betfair.com and associated sites from France. We are considering our options for the future but in the meantime, as a result of this change in legislation, we can no longer accept bets from France or any of its territories. Please note that this restriction also applies to customers that may have accounts registered in a different location but attempt to use their Betfair account whilst they are visiting France.”

  • Don Reed

    In the words of the immortal Mike P.:

    “You’re just about to run out of fence!”

    One of the great Belmont Stakes of all time.

  • Ratherrapid

    hopefully we take a logically view what Fred Pope is selling– let’s reduce our racing from 54,000 down to 4500. big time benefit there to all our breeders, stallions, owners, trainers, black smiths, feed supply stores. contract it right down to a few botique meets where our deep pockets can show off a few horses and split the “proceeds”. this simply has to be opposed every time it is brought up, imo.

    my congrats also to Pegram(and Baffert). never myself heard more succinct, effective comments than Pegram after the Preakness.

  • ManuelB

    Of course, one advantage that the French have is that the country is not composed of 50 States, just one central government. Horse racing is organized on a country-wide basis, with different tracks operating at different levels: some at the national level and some at the local level. There are usually only three or four national tracks running on any given day. They have also organized their betting: one race a day serves the quinte (high 5) for the whole country where the payouts can be in the hundreds of thousands of euros. Aside from the governmental issues, we could learn a lot from the French.

  • Ted Kuster

    One of the best horses we ever raised was High Stakes Player, g, won several Graded races , $800,000 plus, and they, Mike and Bob, bought him for $15,000, still come by the barn and see our horses at the yearling sales., looking for another one for their stable. Mike is a true horseman and loves the sport for what it is, he is right $$ can not buy you a winner but the love of the game will prevail. Yes the tracks like Ellis Park, AkSarBen, which is long gone, , Fonner, Turfway, Hollywood, new and old make the business. There is nothing like seeing your horse win, whether you raise them or buy them and the Mike and Bob team know this and and show it in their love of horse racing. Yes we need their pride of this wonderful American tradition to carry on for the future. Please let’s get something done before it is too late. The greatest sport of all needs leadership from the ownership of race horses, the person that is paying the bill and knows what it is all about. Good luck Mike and Bob, Thank you, Betsy and Ted Kuster , Shawhan Place, llc, Paris, Kentucky.

  • Bob Baffert

    Mike Pegram is one of the few owners that has won practically everything and people still root for him. Even with me training for him. Now that’s strong.

  • Barbara

    Mike Pegram is everything that is right with racing. This is a very short list these days. Oh, and happy birthday Lucky.

  • equine

    Great article Ray.

    It appears there are numerous people behind the scenes in the racing industry who support Mike Pegram’s ideas for improving the sport. It would be great if he published his Facebook account in Part II as a way to bring this diversified group together.

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