Lasix ban: Breeders' Cup's hand forced by waning support

Barbara D. Livingston

Shanghai Bobby (third from left) leads the Breeders’ Cup Juvenile field in 2012, the first year the use of Lasix was banned for all 2-year-old BC races. The Breeders’ Cup recently decided it would not expand the Lasix ban to all of its races in this year’s championship races.

When the board of the Breeders’ Cup met recently to vote on whether to suspend a policy that would ban the raceday administration of the legal anti-bleeding medication furosemide at its 2013 event, its members had to weigh the changes that had occurred in the racing industry since the policy was first approved in 2011.

As it turned out, the racing industry hadn’t changed much at all.

According to Breeders’ Cup officials and board members, the lack of a substantive industry-wide movement over the last two years to restrict the administration of raceday furosemide – also known as Lasix – was the largest factor leading to the board’s decision to suspend the policy, although other factors, particularly financial considerations, played significant roles. As board members pored over financial projections for this year’s event and looked to the 2014 event, they could not avoid the fact that the anti-Lasix movement in the U.S. had not only failed to advance its goal, but also that many of its supporters had actually retreated in the face of an unrelenting pushback from U.S. horsemen.

The signs of retreat were everywhere. The Association of Racing Commissioners International, whose outgoing chairman had launched the movement in early 2011, was now working with horsemen on uniform rules explicitly allowing for the regulated raceday use of the drug. In August 2012, the Jockey Club amended its model-rules document in the same manner while saying it still supported a ban of the raceday use of Lasix. Earlier in 2012, the American Graded Stakes Committee rescinded a controversial rule that would have denied grades to any race that allowed raceday Lasix. And only one state, Kentucky, had passed even a limited ban on raceday Lasix use – only in stakes races – beginning with juveniles in 2014, and horsemen were confident they could get the rule nullified.

“At the time [of the 2011 vote], the American Graded Stakes Committee, the Jockey Club, and a lot of states – obviously Kentucky, which I know well – said that they were going to go Lasix-free,” said Tom Ludt, the chairman of Breeders’ Cup’s board and a former member of the Kentucky Horse Racing Commission. “But we all know what happened. The Jockey Club backed out of the push. The Graded Stakes Committee backed out of the push. Looking back, if you looked at it like it was a race, we saw that we were the only ones that had left the gate.”

Since the Breeders’ Cup decision on March 1 to suspend the policy, one director, Oliver Tait, a representative of the international breeding and racing operation Darley, has resigned, citing his dissatisfaction. European racing officials have widely chastised the board for going back on its original plans, and relations between some board members have become strained, according to several board members.

The initial outcry from European officials has tempered somewhat in the weeks since the vote was taken, according to Craig Fravel, Breeders’ Cup’s chief executive, in part because U.S. officials have had time to explain their position.

“It’s clear we need to be better in communicating to our partners in Europe the constraints here in the U.S., as far as dealing with the state regulations and horsemen’s rights,” Fravel said.

Under the suspension of the policy, raceday furosemide will still be banned for the event’s four juvenile races this year. Last year, when five juvenile races were run, the aggregate field size in the races declined 21.6 percent, leading to a 23 percent decline in handle on those races. Many directors who supported the suspension of the policy felt that field sizes might decline a similar amount in all the races this year if the ban were expanded, leading to even larger declines in handle.

According to Breeders’ Cup officials, the vote to keep the same policy in place for 2013 was conducted only after a vote calling for a complete reversal of the ban was narrowly defeated. In the second vote, several directors who had voted against the reversal voted in favor of keeping the juvenile ban in place, leading to a 9-4 vote to retain the current policy.

Those votes were conducted after directors spent hours reviewing the organization’s budget, including financial projections that included a “worst-case” $6  million loss in revenue to the organization if the complete ban was implemented and the Breeders’ Cup approved other initiatives the board was contemplating for the 2013 event, according to an official with knowledge of the budget presentations. Those other initiatives included the advance of travel allowances to all horses that entered the races and a one-third reduction in entry fees. Both initiatives, which had been discussed by the board for six months, were approved two weeks after the vote on the Lasix policy was conducted.

Although Ludt and Fravel declined to confirm the exact financial projections, Ludt said that the budget estimates being considered by the board during the Lasix policy review introduced concerns over whether Breeders’ Cup would be able to weather a sharp drop in revenue without cutting its purses or dropping additional races from its lineup. (During the same meeting in which the Lasix policy was suspended, the board voted to cancel the $500,000 Juvenile Sprint, the first time a race had been cut from the event’s lineup.)

“That is the part people forget when they talk about this whole situation,” Ludt said, referring to criticism that the board members cowed to pressure from U.S. horsemen on the Lasix policy. “We’re a non-profit. As a board, our major responsibility is fiscal responsibility.”

In 2011, the latest year for which Breeders’ Cup’s financial documents are available, the organization had $27 million in revenue from its two-day event. Operating income that year was $2.6 million, a figure that would be entirely wiped out by a $6 million decline. Worse, it would put the organization in cash-negative territory.

Over the past five years, Breeders’ Cup has had to tighten its belt to deal with a decline in nominations, the expansion of its race card, and a significant drop in the value of its investment holdings. Its investment holdings have rebounded over the past several years, but Breeders’ Cup remains wary about risky strategies after criticism in recent years of the organization’s financial performance, mainly voiced by Central Kentucky breeders.

“Here’s what the directors were considering: let’s say you have a boycott or people holding horses out of races because of the Lasix policy, and then on top of that, you get a market crash,” said one person with knowledge of the board’s deliberations. “They wouldn’t have been able to withstand both of those things at the same time.”

On top of the financial concerns, board members were also briefed on the difficulties that the organization would face when trying to come to an agreement on a host site for the 2014 event. Horsemen’s organizations have made no secret of their opposition to restrictions on raceday furosemide use, and board members were told that no state horsemen’s groups had indicated they would be willing to sign off on the Breeders’ Cup’s simulcast contracts without an assurance that the ban would be lifted.

Both Ludt and Fravel stressed that the Breeders’ Cup’s medication and security policies, which are typically far more strict that those on an average raceday, illustrate that the Breeders’ Cup remains committed to ensuring that the event is conducted with the highest levels of integrity.

“We clearly have nothing to apologize for as far as integrity,” Fravel said.

But for now, at least, the Breeders’ Cup bid to lead the way in rolling back the raceday use of Lasix has stalled. Unless the landscape dramatically changes in the next six months, when Breeders’ Cup is expected to reach an agreement with a host track for the 2014 event, it is fair to wonder whether the 2013 policy will survive and whether the event will return to a policy that once again gives all horsemen the option of raceday furosemide, an option that nearly all owners and trainers – even Europeans – have exercised in the past.

“We haven’t made any determination for future events,” Fravel cautioned. “We still believe in uniformity in the U.S., and we still believe that uniformity on an international basis is an important goal. But we have to acknowledge the reality on the ground.”