Horse racing on congressional hot seat
High-profile deaths of Eight Belles, Barbaro prompt hearings
CHICAGO (MarketWatch) -- On the eve of a public grilling by Congress probing a recent spate of highly publicized racehorse deaths in the United States, track operators defended their overall safety records while hedging on the creation of a centralized governing body in a series of letters to the legislators overseeing the hearings.
A House panel is looking at whether the industry has in place sufficient, consistent standards to minimize inbreeding, doping and other practices that may lead to injury or death.
It was prompted by the death of Eight Belles, the filly who broke down and had to be euthanized minutes after finishing second in the Kentucky Derby last month. That tragedy followed two other high-profile deaths, those of 2006 Derby winner Barbaro and two-time European champ George Washington, put down after getting hurt in the 2007 Breeders Cup Classic in November.
Heavy publicity surrounding those events has drawn calls from politicians and other quarters for more stringent rules on racing and the creation of a national entity to oversee racing, much like those that rule baseball, football and other sports.
But unlike them, racing is inextricably linked to wagering and in fact would not exist in the U.S. without it. Gambling, with the exception of interstate and online forms of it, has always been regulated solely by the individual states -- a perquisite they jealously guard and one the tracks seemingly want them to keep, at least for the most part.
The total U.S. betting handle last year fell 0.4% to $14.73 billion, and dropped another 3.1% in the first quarter of 2008. Total wagering levels have been stagnant for the past few years and are being held up mostly by growth at online wagering firms like TVG and Youbet.com, along with remote betting operations.
Lower attendance
All the attention couldn't come at a worse time for the industry, which has been struggling with declining attendance and wagering levels as rapidly expanding lotteries and casinos lure away its customers. And hopes for a rare Triple Crown winner that might have brought more excitement and interest back to the game were dashed earlier this month when Big Brown, winner of both the Derby and Preakness, fell apart and finished last at the Belmont Stakes.
The two largest operators, Churchill Downs (CHDN![]()
CHDN) and Magna Entertainment (MECA![]()
MECA) , along with the Jockey Club and the New York Racing Association, gave written responses to queries from Chairman Bobby Rush, D-Ill., of the House Commerce subcommittee on trade and consumer protection, and Rep. Ed Whitfield, its ranking Republican. The panel has dubbed its hearing "Breeding, Drugs, and Breakdowns: The State of Thoroughbred Horseracing and the Welfare of the Thoroughbred Racehorse."
Churchill Downs Inc
Sponsored by:
Magna Entertainment Corp.
Sponsored by:
Among Rush's questions to the various parties was whether each would "support a central body or league to govern horse racing similar to what is in place in Great Britain and other countries?"
Standardized rules
There seems to be general agreement that there needs to be more standardization of some rules, but the track operators generally balked at making it too broad, deep or mandatory.
After pointing out that Magna's catastrophic injury rate is 1.75 horses per 1,000 starts -- or less than one-fifth of 1%, William Ford, a senior lawyer at the company, wrote that it "supports a more uniform approach to many important issues relating to the governance of horse racing," which would include a national injury database.
But, he insisted, "the analogy to Great Britain is misplaced -- the United States is a union of sovereign states, and the U.S. Constitution provides that these states retain sovereignty over most intrastate activities."
Further, considering "key differences in how horse racing is regulated in the United States" compared with the United Kingdom "make establishing a central league or body unworkable at this time," he said.
For instance, "the United States has 38 separate racing jurisdictions, each with their own regulatory scheme" whereas Great Britain "has only one racing jurisdiction throughout the entire country."
Whips and surfaces
Churchill Downs, which owns the eponymous track where Eight Belles died, is "supportive of and would welcome the timely national standardization of rules related to the safe conduct of racing," wrote Chief Executive Robert Evans. Those could include everything form everything from medication to track surfaces to post-fatality investigations to even whip usage.
That might best be accomplished by "the promulgation of model rules, strengthening and expanding the role of the National Racing Compact to include the development of racing condition rules, or other similar actions," Evans continued, pointing out there also would need to be "fair assignment of costs for implementation."
(The National Racing Compact is an entity made up of racing regulators from a number of states that has been authorized to conduct criminal background checks on would-be horsemen and then issue national licenses that are recognized by all its member states.)
However, Evans stressed that "multi-jurisdictional rules should be focused solely on the racing conditions as they affect safety. Individual participants and individual jurisdictions must be allowed to innovate and improve the racing product an entertainment and economic standpoint and compete fairly and on a level playing field for the consumer's business."
For its part, the New York Racing Authority, which runs Belmont Park, home of the final leg of the Triple Crown, and other facilities, was less equivocal.
The NYRA "is of the opinion that a centralized, industry-led organization with strong support from all stakeholders constitutes the most beneficial and effective method of implementing industry changes and ensuring compliance, particularly with respect to the use of performance-enhancing drugs and the welfare of the thoroughbred racehorse," said Charles Hayward, NYRA chairman and chief executive.
He, too, supports an expansion of the Compact to be used to "achieve uniformity in regulatory policy on other matters." 
William Spain is a MarketWatch staff writer in Chicago.
No comments:
Post a Comment