LIVE BLOG: RCI FEATURING NICHOLSON, WALDROP

by | 11.17.2010 | 12:47am
By Ray Paulick

A couple of horse racing regulators, a politician and some industry leaders. What more could a fella ask for–ducks in a barrel?


That's the starting line-up for this morning's 75th annual convention of the Association of Racing Commissioners International from Lexington, Ky. To paraphrase from one of my favorite movies, “Apocalypse Now,” I love the smell of live blogging in the morning!


We'll be live at ringside in Lexington, Ky., for as much of today's activities as we can put up with (before making our own remarks to the regulators later in the day).

Here's the batting order: Kentucky Horse Racing Commission chairman Bob Beck, followed by Kentucky Gov. Steve Beshear, RCI chairman Joe Gorajec (an executive with the Indiana Horse Racing Commission), and keynote speaker Nick Nicholson, the president and CEO of Keeneland, chairman of the American Horse Council, and a board member with the National Thoroughbred Racing Association and Thoroughbred Racing Protective Bureau. Nicholson is the hands-down winner of the longest resume on today's program.


After a refreshment break, we hope to hear from Alex Waldrop, the president of the NTRA.


The excitement is building and the buzz in the room is damn near palpable. Let's get ready to rumble!!!!!!!!

9:10 a.m…. Opening remarks by Bob Beck were not overwhelming, but at least he warned us that he wrote them at 10:30 last night after a long dinner with fellow regulators. The only thing that stands out is this gem: “I want to congratulate RCI…I understnad this is the 75th anniversary of RCI, which is really something.” 


He didn't tell us what that something is…on to the governor.

9:15 a.m. … Gov. Steve “Boogity Boogity” Beshear was a no-show, unless you count the magic of videotape. Yes, he videoed it in. Beck explained that the governor was really busy this time of year. Yes, checking out those NASCAR tracks and then asking for tax breaks for their billionaire owner is time consuming. Thanks, Gov. He asked the attendees to have and get around Kentucky to see all that it has to offer. “We are the horse capital of the world. We are the home of beautiful horse farms. For centuries,horses and horse racing have been an integral part of our culture and our economy. We have a lot riding on the horse industry here in Kentucky.” 

I'm betting more of them will drive up to the Belterra casino across the river in Indiana.


9:20 a.m. … Always thought Joe Gorajec was a bright and insightful guy. He quoted from the Paulick Report on something I'd written about the shelf life of “white papers” and urged the commissioners to go home and take action. That's a good thing. How can I knock Joe? Gorajec cited a couple of articles from the current issue of Sports Illustrated that were extremely negative: Ernie Paragallo's starving horses and Jeff Mullins' “honest mistake” treating a horse in the Aqueduct detention barn. “The ne
gativity is unprecedented,” Gorajec said. “Hardly a week goes back without solme incident triggering an avalanche of criticism, from inside and outside the sport.” For those who haven't followed Indiana racing, Gorajec is a “hangin' judge,” imposing tough sentence on cheaters in Thoroughbred and harness racing. Other states should look to Indiana for leadership on regulations…and I'm not saying this just because he promoted the Paulick Report.


9:30 a.m. … Nick Nicholson …. how many of these speeches has he delivered over a lifetime in politics and racing? Slick Nick. Very entertaining story about the Blue Grass Stakes winner and the one-horse stable owner, former school teacher and principal Tom McCarthy. On to the serious stuff….

Nicholson calls the NTRA Safety and Integrity Alliance a “seminal moment” in showing “the industry and the country” that racing people can police themselves. Keeneland “killed a tree” to comply with the inspection team, he said. Hope he explains that one.


“I said at the press conference (when Keeneland was accredited) something I want to lead with this morning,” Nicholson said. “I said at the press conference that day that this could not have happened without the competent regulation of the Kentucky Racing Commission. It would be impossible for Keeneland to be certified…were it not for the Kentucky Racing Commission.” He then made executive dirctor Lisa Underwood and chairman Beck stand up to applause.

“We should not accept our status quo. We push ourselves to continually improve….We are all in this together. This could not have been done by Keeneland alone. The private sector and public sector have a joint necessity of working together.”


Nicholson said he told Safety Alliance czar Tommy Thompson that Keeneland would not participate in the Safety and Integrity Alliance if the process was a publicity stunt or “whitewash.” He was convinced that it wasn't. “We are likely to have some stories and headlines that are unpleasant to read while we go through this process…but this industry has to improve a lot of what we do, so whatever bumps along the road we hit, and some will be substantial, it is worth and I am convinced we are going to be a better sport and a better industry for going through this process.”


9:40 p.m. … ON to Washington, D.C. “This particular Congress is not concerned where the problem is but they are determined that they will be part of the solution,” Nicholson says, “This Congress is going to be activist, this Congress is going to pass a lot of legislation. It is time to pay attention to what goes on.” Nicholson quoted Ronald Reagan saying “government is the problem.”


Here's one for the horseplayers. Nicholson said the “best single thing” we can do this year in Washington is to get the I.R.S. off the backs of horseplayers who are fortunate enough to hit a ticket they have to sign for.


There will be a move to legalize internet gambling, he warned, and thinks it will be successful. “All sources of new revenue will be looked at and I'm convinced internet gambling will be one of them….You are going to see transporation legislation, slaughter legislation, animal welfare legislation, and this Congress is much more in a mood to pass something that sounds like a good idea than the last Congress.” AHC will devote its next major meeting studying welfare issues.


9:45 p.m. … A forest and tree issue. “The entire economic survival of the modern pari-mutuel system is based on interstate simulcast. At least for the time being we have a virtual monopoly on interstate simulcast.” The industry told Congress, Nicholson said, that it could trust the industry because it would be monitored and regulated effectively at the state level. “Any entity that gets into our pools should have a regulatory body, and if it were my say they would have a regulatory body that belongs to this distinguished organization.” Horseplayer Mike Maloney erupts in applause. Maloney will speak later today on pari-mutuel integrity issues.


“Let's talk about steroids,” Nicholson says. “This time last year they were common around the race track. This year they are not. … Once this industry collectively decided it was time that we do something about steroids, you demonstrated…that we as industry can moderate ourselves and do it quickly. The steroids situation in America today is dramatically today than it was a year ago. … I understand it's not perfect, but drugs and drug enforcement is not an area that you ever can declare victory. It's a permanent, constant journey.”


9:55 p.m. … Uniform rules? “We have made worlds of progress. .. We are more uniform right now in our medication and drug policies than we have been in modern times.” But, Nick, how do we compare to other equine activities (Olympics, USET, etc.) or human athletics? Isn't that a more legitimate benchmark than comparing today to our ridiculously un-uniform past?


10:00 p.m. … I sense and I hope that the time is upon us that we come closer to uniformity with the rest of the world. Europe and Asia are moving away from…zero tolerance policy,” he said. “I am convinced that each and every one of us wants the end game to be the same: racing with integrity. As long as we get to that goal, that's the key thing.”


In closing Nicholson suggests the legacy of the 2009 RCI convention be that the regulators bring us to uniformity with one another and the rest of the world.

10:30 a.m. … Forgot to mention that Richard Thalheimer, a numbers runner for industry groups (also known as a research consultant) is on the agenda to send everyone who likes horse racing into a deep, deep depression. Pari-mutuel handle down over 50% over time since lotteries and the expansion of casino gambling. I've seen this movie before, for the most part. Short message: we are doomed.


But Thalheimer has a new twist based on a Prairie Meadows study. Live racing helps slots handle, as does simulcast racing.  I guess the good news here is “racinos” that might consider getting rid of horse racing and just going with slots might be better off if they keep live racing and/or simulcasting. Who is the dog and who is the tail and who is being wagged here?

“Having slots at the track has saved our industry. On the other hand for the long run viability of our industry, (we) have to find ways to increase the pari-mutuel viability,” said Thalheimer. He called it a “two-edged sword” that live racing helps slots, though slot machines reduce pari-mutuel handle. “Finally, I'd like to mention…racing has a viable product where you can sell your signal from ADW and online wagering. The time to do it is now.”


10:40 a.m. … Alex Waldrop takes the stage. He promises to cover a lot of ground…”the economics of this industry mirror the overall economy.” Waldrop blames the media for focusing too much on live handle or overall handle. He points out that “bringing competition into our facilities” (slots at tracks) has driven handle down. He cites slightly declining purses and a major decline in bloodstock prices. “Tracks are struggling….NTRA Advantage (group purchasing) is declining. … Magna bankruptcy, I don't know much about it, but it's not a good sign. We know that horse owners are struggling.” He condemned the behavior of Ernie Paragallo but then linked it to the falling economy.


Waldrop even touched on the “rise of the bloggers” and the fall of newspapers and trade magazines in the industry. “I blog myself…I'm one of those bloggers. I do it to listen. I love to hear what the fans have to say,” he said. 


Legislatively, Waldrop said he feels online poker will be legalized by Congress but  doesn't think any other online gaming will be approved in the near future.  He called what he thinks will be a proposal in Congress to regulate horse racing at the federal level a “very negative bill. … It may very well happen before Derby. I don't think there's much appetite in Congress, they've got other things to worry about.”


10:50 a.m. … Touching on fans and the impact that the death of Eight Belles had on people, Waldrop spoke about how the Safety and Integrity Alliance came to be. He said revelations about Big Brown racing on steroids was a major concern with “core fans” and that the Eight Belles death had a bigger impact on “casual fans.” After both incidents, he said, “Understandably there were calls for change….Others wanted a czar or commissioner. At the heart was a very serious and correct question: Does it have the will and can it change? Or is it doomed to disparate disjointed state by state regulations that is competitive and doesn't represent the interest of the fans and the industry. That is the one we wrestled with at the NTRA last summer.”

“We focused on safety and integrity.” The integrity focus was more on therapeutic medication and drugs and not on wagering integrity,  he said. “Not that wagering integrity isn't important.” Waldrop asked:  “Is (the Safety and Integrity Alliance) an anti-regulation approach? Absolutely not.” 


He talked about the fans and the horses being the right reason to push the Safety and Integrity Alliance forward, hoping the perception of the industry will change gradually. “It's got to be done at the state level. We want change and we want it now. We cannot talk our way out of these problems any more. You've got to be part of that process,” he told regulators. If tracks aren't accredited, “it will be on your shoulders.” Tracks that aren't acdredited “aren't in the big leagues.” Waldrop is drawing a line and telling the industry you're either with us or you aren't.


“I wake up every morning worrying 'what the heck have I guess myself into.' We've got eight tracks in the accreditation process”


Waldrop said the criticism of the NTRA is that the organization has no teeth. “You have teeth,” he said to the regulators. “You're our teeth.”

1:45 p.m. … Bummer. There was a scheduled meeting of the RCI's Wagering Systems and Tote Standards Committee, but chairman Frank Zancuccki of New Jersey had the SAD DUTY TO REPORT THAT A QUORUM OF THE COMMITTEE WAS NOT PRESENT. That's not very encouraging. It's not golfing weather today in Lexington and there's no racing at Keeneland, so it's hard to explain all the empty seats this afternoon that were mostly filled earlier today. Maybe some of the commissioners are resting up for the 5 p.m. cocktail party. Zanzuccki said Larry Eliason of South Dakota, chairman of the model rules commitee (and, apparently, the party committee), warned that the afternoon's program on Wagering and Tote Standards, An Independent Assess of Regulation, Interstate Compact–a New Direction for Racing Regulation WOULD NOT spill over into the cocktail hour.


Thanks for getting those priorities straight, commissioner Eliason. Besides…tote problems? What tote problems? We don't need no stinkin' tote problems!


NOTE: I was told later that Larry Eliason was only kidding about not wanting the sesssion to overlap the cocktail party. I guess I'm lacking a sense of humor when it comes to tote integrity.


2:00 p.m. … Professional horseplayer Mike Maloney was introduced and began his presentation by urging commissioners to become familiar with a new organization, Horseplayers Association of North American (HANA), and he presented four things HANA would like to see achieved. all track signals available to accredited tracks, lower takeout, strict uniform medication and improved wagering security. Easy to state, hard to achieve, Maloney said. He talked about the confusion horseplayers have about wagering formats from track to track, especially on which races have trifectas or superfectas due to the different state rules that apply to field size of those races.

Maloney urged states to allow trifectas in small fields, something Kentucky has done. He said the handle increases when tracks do that. He then went on to talk about past-post wagering, late odds changes and wagering pool manipulation. Maloney called for wagering pools to close at one minute to post time. “That a bitter pill to swallow that we would ever have to do that,” he said, “but it would solve these problems.” He acknowledged that it would cause a reduction in handle. “But if that's what we need to do, if a y ear or two from now if we are still sitting here and don't have a solution, then I think we seriously need to consider closing the windows early enough so that the odds are final before the gates are open. That would bring back a lot of confidnece in that game.”


Maloney also said he supports the NTRA Safety and Integrity Alliance. “I also support Alex Waldrop,” he said. “I have a lot of faith and trust in Alex.”


His final comment involved transparency. “Incidents of past-posting have been hidden from the public,” he said.  Maloney wants all rulings from commissions to be made available to the public. Maloney himself was involved in a past-posting incident he reported, but he said he has not been able to find out from the Louisiana Racing Commission where the investigation has gone. “Lack of transparency” hurts the game, he said.


I hope Mike sticks around for the cocktail hour. There will be more commissioners there that he can give the message to than there were in the room for the meeting on Wagering Systems and Tote Standards. It needs to be heard.


That's about all I can take. That's it from the RCI Convention, where the empty seats outnumber the empty suits.

Copyright © 2009, The Paulick Report


Support the Paulick Report. Make a
donation today.

Visit the Paulick Report for all the latest news throughout the racing world

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

Twitter Twitter
Paulick Report on Instagram