02/27/2012 12:12PM

Jay Bergman: Veiled threats don't hold water


If you've been feeling the rumblings in the ground lately, you're not alone. The racing industry, primarily Standardbreds, has been noticeably shaken by the actions of political leadership both in Pennsylvania and more importantly in Ontario over the past few weeks. The sudden and unexpected nature of this movement has left many in the racing industry clamoring, and others taking swift action.

At stake in both locales and perhaps other states in the future, is the continuation of laws that have allotted purse money to Standardbred races, funded in the most part by slot machine revenue.

Foundations for horsemen's defense of keeping the status quo are solid in many aspects. Racing does provide income to more than just the main players in the game and certainly adds to the economic benefit where tracks are located. One of the more difficult things to quantify is the overall employment benefits slot-infused purses have had on the racing industry. While it would be easy to say if General Motors were allowed to go out of business, there would have been severe, immediate job losses. It's much harder to put your finger on employment figures should racing lose political favor.

Recently when Pennsylvania's governor, Tom Corbett, suggested the state "raid" the slot revenue designed for racing purses for the next three years, there was an immediate outcry. Perhaps the most hollow sound came from some trainers who were quick to go on the record. "If they pull slot money out, I'm going to have to think about leaving Pennsylvania."

Hey what do you mean leave Pennsylvania?

Lost in translation is a fact few wish to talk about and those counting jobs number hardly ever consider. That is that there are so many trainers currently leading the industry who not only set up shop in Pennsylvania, but have strong camps in Indiana, New Jersey, New York, Delaware, and even Ontario. All at the same time!

Legislation to bolster local business from slot legislation was well-intended, you can be sure. Yet judging from the numbers it's hard to find too many of today's leading Standardbred trainers anchored to one track, state, or even country.

One of the greatest arguments racetracks used in pushing for "racinos" was that people were already leaving their state to gamble in adjacent states. The campaign spoke of lost business and lost opportunity for local employment and taxes.

While the argument was real in speaking about gamblers, pretty much the exact opposite holds true concerning our leading trainers.
What has become apparent in the last 10 years is that the top echelon of trainers have set up shops throughout the land and continually cross state lines to profit.

Do they create more employment?

Or do they replace existing employment?

While we can all agree that higher purses created more opportunity, it's much harder to agree that it created more employment. Especially when you look closely at the leading trainers at a host of tracks and you see the same names.

In many ways the Standardbred landscape today mirrors Occupy Wall Street. A small group of trainers is taking a lion's share of the purses across state lines and the 99 percent are left powerless and defenseless.

We do live in a capitalistic society. Therefore it would be wrong to blame the successful trainers for their intelligence, management and horsemanship. Yet I can't help think that much of what hurts our sport from a competitive standpoint is that too many of our top horses come from the same stables.

Variables produce handle. Limit the realistic number of trainers who can send out a winner and you reduce the trainer variable in each race. Harness racing by definition (one-mile races) is already at a distinct disadvantage against Thoroughbred racing, which offers varied distances as well as races on dirt or grass.

Big stables can also dominate by sheer numbers. Claiming races are the perfect example. Let a small guy take from a big guy, and the next thing you know the small guy is out of business. The small guy has to overvalue his horse in order to "keep" him from being claimed. The big guy jams the horse at one level over and over again to maximize earnings. If he loses one, he'll just fill that race with a different horse the following week.

The big guys also have a virtual lock on top drivers, which works well for them but again reduces the gambling variables.

One of the key reasons lawmakers have commenced actions against the racing industry is the general outward appearance that nothing has changed at racetracks. Fewer people are attending the races, and handle figures have been stagnant or in decline. While a few have profited from what some have called "free money," the business as a whole has not improved.

Increased purses were supposed to help an industry grow.

Unlike Occupy Wall Street, in this case the 99 percent willingly allowed the 1 percent to win, without any concern as to how the game was playing out. Now, as the bubble gets extremely close to bursting, it's time for all to construct a solution to make the racing (betting) business viable again.