Hypocrisy? You Betcha!

Just a quick thought that popped into my mind as I was reviewing the fallout of Kentucky’s “No!“ to slots:

A common theme you’ll find is criticism of the committee’s Republicans’ hypocrisy, especially Senate President David “Blackjack” Williams, who happily plays the casinos in neighboring states, but doesn’t want to allow them in Kentucky.

I agree it invites ridicule, but since we’re already on the topic of hypocrisy, why not take a quick look in the mirror:

Those racing fans and professionals who support slots want them for no reason other than to fund our sport, yet it would be perfectly within the states rights to legalize slots, VLTs, even full-blown casinos, independently of racing.

Wonder if those Kentucky horsemen and the racing media would be as unanimous in their support for slots then. Or would they suddenly find themselves on the side of the Family Foundation, trumping up the values of the racing-and-lottery-only era and condemning the evils of the highly-addictive slots game?

Hypocrisy indeed.

Trojan Horse Racing

The last few days have seen a resurgence of the ongoing discussion of the merits and potential of slot-subsidized racing, stirred up first by Power Cap, then on the HANA blog and on the Pull the Pocket blog. All of these posts are strong in analysis, and the first two both try to push a concept for a more productive way of doing business.

Power Cap’s currently Utopian idea of a Mid-Atlantic circuit not relying on slot revenues and HANA’s proposition of a slot-revenue system more in tune with the interests of racing are both good in concept, but their chances of ever becoming reality are next to zero.

The reason is that both don’t address the heart of the matter, which is that slot racing has never been intended to help the sport, it has been intended to help current horsemen, state coffers and the casino industry. The difference is not a small one.

Proponents of Slot Racing come from three different camps. First there are the breeders, trainers and owners of thoroughbreds. Since the forces of the market demand that racing (at least in its current state) has to decline in size, their business is doomed, and the lower the quality of horses they handle, the more pressing this problem becomes (which explains why those states offering the worst product were the first to legalize slot racing).
It also poses a problem for state regulators, who are used to the income generated from the sport and whose attempts at getting more out of it than the industry can support is the main reason for the inflation in race dates and the horsemen ranks.
The final camp are gambling enterprises, which have no interest at all in racing, but to whom subsidizing it in exchange for opening up new markets is an investment well worth the cost.

Newsflash here, Casino operators aren’t the most socially-spirited of guys, they’re in the business of tricking you into spending your money on games you can't win, then throwing you out. Sure, if you’re completely broke they might sponsor your trip home, but they don’t do it because of their human qualities, they do it so the sight of your destroyed little remains in front of the glitzy main entrance doesn’t keep their next victims from entering.

Of course the casino industry isn’t interested in playing welfare system for the ailing horsemen population in the long term, but they figure they won’t have to. A couple of decades from now, I’m sure that historians will look back at slot-subsidized racing in disbelief. How could the racing industry not detect one of the most obvious Trojan Horse schemes in world history? The casino industry is promising a couple of frightened horsemen El Dorado, and the horsemen are happily inviting them in.

Once the casino industry has established itself in the state, once public interest in the racing product has further eroded (as it undoubtedly will in an environment in which racetracks are uninviting run-of-the-mill extensions of buzzy casinos), the time has come for them to cut off the costly leech attached to their casino empires. The state governments will be glad to help, by then they’ll have come to think of racing only as a nuisance cutting into their takeout rate too. The horsemen population, and to a large degree the sport so violated, will be spit out and left facing an environment much worse than what they started from.

"It's only a matter of time before they stop racing horses all together and just use them to cart around free booze to the gamblers."

(Greg Wyshynski, seriously under-estimating the introduction of slots to racing at rank #58 in “Glow Pucks & 10-Cent Beer – The 101 Worst Ideas in Sports History”)

NY Handle Decreases; Reduced Quality and Dependence On VLTs A Solution, Says NYTBDF

According to the DRF, New York’s Thoroughbred Breeding and Development Fund is facing “economic catastrophe”. The fund, tasked with paying incentive bonuses for the State Thoroughbred Breeding and Development Fund Corp., is unable to fulfill its payout obligations as the number of state-restricted races increases while handles, its primary source of income, keep shrinking.

According to NYTBDF executive director Martin Kinsella, the number of state-restricted races will increase from between 500 and 600 annually over the last years to 700-800 this year, a change the fund applauds and which, again according to Kinsella, far outweighs NYTBDF cutbacks.

Given a relatively level overall number of races on NY tracks, 200 more state-restricted races means that about one race less per day will be open to non-statebred (or state-registered) horses, further intensifying the already existing decline in quality of NYRA’s racing product. Correct me if I’m wrong, but isn’t declining quality one of the main reasons for reduced handle? For comparison, look up “Gulfstream Park, Development of annual handle at” in the Cambridge Almanac of Common Sense.

Instead, Kinsella is holding out hope for the arrival of VLTs at Aqueduct, a bright future he actually refers to as a “long-term solution”. The NYTBDF was one of the first state incentive programs subsidizing breeding regions with huge amounts of money (over 60 million dollars annually), initially intended to draw breeders and owners from other states, but now mostly subsidizing the breeding of inferior horses that would not otherwise be profitable. It was effective enough to force every other breeding region around the country to start a fund itself, resulting in a stalemate that is a major cause of American racing's current oversupply.

Kinsella, if nothing else, proves one thing: No matter how many times the world economy breaks down because of this mindset, NY executives still won’t grasp a concept that every illiterate tanner in the middle ages was able to understand: In the long term, your business can’t be healthy if your expenses are higher than your income.