The critical issues affecting the United States Thoroughbred industry might, on the surface, plead for the creation of a central commissioner’s office. Divergent racing rules between states and tracks, disagreements on medication, testing, and enforcement, and the absence of national marketing strategies seem to suggest the need for a national leader to establish overarching policies for the sport. Let’s review two serious collaborative efforts of the past 20 years that failed to achieve this goal, revealing three simple reasons why no commissioner will ever ride to racing’s rescue.
In March 1994, the Thoroughbred Racing Associations (TRA), the fifty-one member organization comprising North America’s largest racetracks, appointed Brian McGrath as their first ever commissioner. Jon Morgan of the Baltimore Sun reported at the time, “McGrath envisions several roles for himself, none of them regulatory: industry consensus builder, marketer, Washington lobbyist, and clearinghouse for data and ideas.”
McGrath’s two most significant initiatives as commissioner were a national pick-seven bet and a weekly televised racing show on ESPN2—both of which met with disappointingly weak participation. Within 18 months, McGrath had been dismissed and the national office closed. Santa Anita’s Cliff Goodrich, then president of the TRA, told the Los Angeles Times, “The effectiveness of a national office was severely compromised by an inability among the membership to forge an agreement on a national direction.”
April 1998 saw the launch of a new organization, the National Thoroughbred Racing Association (NTRA), headed by Tim Smith as commissioner and CEO. Initial funding ($1 million apiece) was provided by the Breeders’ Cup Ltd., the Thoroughbred Owners and Breeders Association, The Jockey Club, Keeneland Association, Oak Tree Racing Association, and the National Thoroughbred Association. This broad- based coalition of horse racing interests consisted of the leading Thoroughbred racetracks, owners, breeders, trainers, and affiliated racing organizations in the country.
Early optimism for the NTRA envisioned the achievement of a national advertising and marketing strategy, national television and licensing deals, substantial consumer brand sponsors, significant revenue from an account wagering platform, and effective lobbying in both national and state government. Mr. Smith left the NTRA in 2004 without reaching many of the ambitious goals set forward in 1998. An account wagering initiative with TVG was discontinued due to direct competitive concerns by NTRA member organizations. Significant consumer sponsors did not materialize, and – absent account wagering revenues – the television and national advertising plans were necessarily curtailed.
Dissension among constituent board members stymied management efforts to initiate new programs, and membership slowly declined as racing organizations questioned the return on their annual dues payment. Today, the NTRA continues to operate with a much-reduced staff and concentrates its efforts on marketing and public relations, industry events, lobbying, and integrity initiatives.
Leaving aside the particulars of these two failed initiatives, there are three reasons why a powerful national commissioner for racing in the U.S. is unlikely to happen.
1) State governments control all regulatory racing and medication policies for individual jurisdictions
2) Racetracks – both for-profit and not – control most of the industry racing assets
3) Racing lacks an ongoing funding source to support the commissioner’s office
Of the 50 states, 29 conduct some form of horse racing, and 43 allow pari-mutuel wagering on horses. In this country, individual states have statutory responsibility for promulgating their own racing laws, and each state has established a gaming or racing commission that enacts these laws through proprietary rules and regulations. Generally, state racing and gaming board members are political appointees who do not necessarily possess experience or intimate knowledge of the industry.
The practical implication is that each state has its own rules for racing regulation, medication policies, drug testing, totalizator systems, and racetrack operations and security. The result: No truly accepted national standards for the conduct of racing exist.
The inconsistency of racing rules from state to state can have serious implications for the conduct of racing. In New York, a jockey can clearly impede (or foul) another horse but his horse is likely to be disqualified only if, in the opinion of the stewards, “the foul altered the finish of the race.” This rule opens the door for individual judgments by the stewards, and creates a potential integrity issue for racing that comes up time and time again.
Another integrity issue is presented by the complexities and inconsistencies in medication and drug testing rules. Testing protocols – such as blood vs. urine, and the range of technologies employed in the testing process – vary from state to state. Acceptable withdrawal periods for approved medications, such as clenbuterol, can vary significantly from 96 hours in one jurisdiction to 14 days in another. In sum, the bureaucratic structure of state regulatory agencies challenges the industry as a whole and prohibits a centralized industry leader from wielding meaningful authority.
Turning to commercial rights, national league offices in such sports as baseball, basketball, football, and hockey, maintain control of most commercial assets for the league’s teams. Television broadcast and Internet rights are negotiated at the league level and the proceeds divided among the teams. Property rights including clothing/uniform licensing and sponsorships are in most cases negotiated by the league office. Finally, the league office generally has control over the development and distribution of league marketing initiatives, and the leagues have an active role in conducting labor negotiations with various player associations.
In the U.S., nothing remotely like the commercial rights outlined above exists to support a central agency in Thoroughbred racing. Only a few races, namely the Triple Crown and the Breeders’ Cup, have television licensing value. License fees and sponsorship revenues generated by the Triple Crown accrue directly to the tracks that host these races and not to the benefit of the rest of the industry. The Breeders’ Cup does currently have a multi-faceted programming deal with NBCUniversal for the rights to the two-day Championship event. Any revenues from this deal help fund and promote the annual two-day World Championship series and have an indirect benefit to the racing industry, but the Breeders’ Cup is a two-day event once per year. Hence, the traditional revenue streams that fund professional sports league offices are nonexistent in Thoroughbred racing.
In the absence of a centralized commissioner, individual organizations are essential to the future success of the Thoroughbred racing and breeding industry in the U.S. (There has been some support for federal government involvement in racing, but that topic will be saved for another day.) The Jockey Club and affiliated companies, Thoroughbred Owners and Breeders Association, Racing Medication and Testing Consortium, Inc., Association of Racing Commissioners International, Breeders’ Cup, National Thoroughbred Racing Association and Thoroughbred Aftercare Alliance, Thoroughbred Horsemen’s Association, Thoroughbred Racing Associations, Horsemen’s Benevolent and Protective Associations, and the Jockey’s Guild are among those dedicated to growth and modernization in the industry. These groups, and others, provide a reason for optimism, and at the moment, they are our best hope to catalyze needed change at the national level.