02/22/2008 12:00AM

Finding ways to catch whales

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TUCSON, Ariz. - As usual, the fifth annual joint meeting of the Thoroughbred Racing Associations and Harness Tracks of America, held last week in Florida, featured two general sessions of speakers interspersed with the business meetings of the two associations.

Typical of the quality was the opening pair of speakers, a fascinating daily double matching Maury Wolff, trained as an economist and one of horse racing's keenest minds, and youthful and articulate Nick Eaves, who made clear why David Willmot chose him to be president of Woodbine Entertainment Group.

They were discussing whether "whales" - the game's biggest bettors, of which Wolf is one - could be returned to racetracks from other betting venues.

Racing commentator Dave Johnson, moderating the panel, asked both men to provide their "best and worst" of the situation.

Wolff said that the best for cutomers was deregulation and more competitive pricing in the marketplace. The worst, he said, was an industry that historically has been heavily regulated and has no pricing flexibility. He said that while players today have far more options than 10 or 20 years ago, there was a fundamental need for a pricing model that rewards the biggest players as well as recognizing the needs of smaller players.

Eaves, running one of the largest and most sophisticated racing operations on the planet, said management of tracks and the industry itself had made it a customers' problem.

"That is something that none of us are terribly proud of, but it is a reality," he said.

Eaves said whether you called it a rebate problem, awards program, takeout adjustment, or whatever, there was no question that it is a critical issue and that any solution required an increase in wagering. The challenge, he said, is to keep third parties from taking the lead on the role of rebates. They unquestionably create competition, he said, but unfair competition because the rebate shops have no cost structure that even resembles that of tracks.

"If a rebate structure has to exist," Eaves said, "it has to reward the customer who spends the most and frankly earns it, but it must be a neutral one. We can't continue as an industry to export that function to third parties that are creating the damage."

Wolff pointed out that it depended on whether one considered hypothetical solutions or real-life scenarios. He asked how you deal with a third-party entity like New York City OTB, which he said has developed a remarkable distribution system.

When asked how that could be done, Eaves said it was the $64,000 question. There needs to be an industry strategy that includes each of the third-party participants, he said, because "for the most part, they are not going anywhere." They need to be contracted, he said, in a way that reflects the numbers they deliver, the level of investment that they have in the industry.

It was a fascinating discussion but it produced no miraculous, instant solutions. So despite Eaves's wishes, it will be continued next year, when a huge Racing Congress will be held in Las Vegas.

* If, as it appears, I created havoc and confusion with some inadequate reporting in this space two weeks ago, I hasten to repair the damage now.

For the record, I considered - and still consider - the Racing Medication and Testing Consortium as racing's best hope of bringing the sport's racing commissioners together on steroids and other medication issues. I was present at the creation, and am a charter believer and firm admirer.

My column may have suggested that Alan Foreman, one of the brightest men in racing who laid the foundation for the Consortium, opposes steroid restrictions. The opposite is true. He is a staunch advocate for their restriction, and felt it prudent to opt for a delay in new rules to allow time for racing chemist George Maylin to complete research at Cornell University that can strengthen the Racing Medication and Testing Consortium's proposed regulations.

Sixty years ago this spring, when I wrote my inaugural column for Daily Racing Form, I already had learned an important lesson. My first employer, the superb Chicago sportswriter Jim Kearns, handed me a dime when I reported for work, and when I asked what it was for he said, "To make a phone call and check your facts."

The price is up to a quarter now, still within my range, but I neglected to drop it in the slot on this one and find out firsthand what I now know. It was a mistake that I am not likely to repeat in the next 60 years.