01/20/2016 12:07PM

Portland Meadows Rainbow Pick 6 races come in one color


Portland Meadows has introduced a jackpot-style carryover wager in an attempt to raise the track’s profile with horseplayers, but the structure of the races has generated concerns about a conflict of interest since all the horses in the bet sequence are owned by a single person related to the track’s owner.

The National Racing Club Sweepstakes Rainbow 6 Jackpot -- which attracted $24,539 and $20,624 the first two times the wager was offered, Jan. 11 and Jan. 19, at Portland Meadows -- is modeled after jackpot-style bets that pay off only if there is one winning ticketholder. However, unlike those other bets, all of the horses that competed in the six races were owned by Andy Stronach, son of the track's owner, Frank Stronach.

Portland Meadows is a small, struggling racetrack, and the specifics of the bet slipped largely under the racing industry’s radar when it was first offered Jan. 11. However, out-of-state regulators who later learned how the bet had been structured expressed concern that the wager had been allowed to go forward, citing the involvement of Andy Stronach as the owner of every horse that ran.

“The concept of having one owner of every horse in a race is extremely problematic, to say the least,” said one regulator who did not want to be identified because of relationships with Oregon racing commission personnel. “Let’s not even talk about the nature of the bet, which has its own set of conflicts. This is a big, big problem.”

There is no evidence that the races were manipulated. However, in addition to the danger of manipulation to engineer payouts in single-race pools, the most apparent dangers involve whether the races or race fields could be manipulated to make it more difficult for there to be a single winning ticket at the end of the sequence. Wagers that only pay off when there is a single winning ticket draw more handle as the carryover grows, with racetracks retaining more revenue as players are attracted to the jackpot.

The ways that a single owner could manipulate a race or series of linked races to limit winning tickets are numerous, including directing jockeys to hold their horses or scratching horses from races after the bet sequence had begun, which would move bettors’ selections to the post-time favorite after they had already paid for their wager. Both are far easier to direct if there is only one owner involved. An owner with ties to the racetrack, such as Andy Stronach, would appear to have an incentive to encourage a carryover.

Karsten Hennze, general manager of Portland Meadows, said the track would not have been able to card a jackpot-style bet without the involvement of Andy Stronach and the horses he brought to the track. Portland Meadows has struggled to fill fields for a typical nine-race card, and the Stronach horses allowed the track to fill an additional six races for a bet that “is one way to get Portland Meadows on the national radar,” Hennze said. The bet is guaranteed to pay out $100,000 at the conclusion of its run.

“Regular race-day field size has not been high enough to justify a single-winner wager that has the chance of carrying over and building momentum,” Hennze said.

Hennze added that the track has disclosed that Stronach owns the horses and that the track’s horsemen have signed on to the bet. Hennze also said races at Portland Meadows are “always under the scrutiny” of the Oregon Racing Commission and its state veterinarians.

“Both have demonstrated tremendous dedication to protection of horses and the interests of wagering customers,” Hennze said.

Jack McGrail, executive director of the Oregon Racing Commission, said the commission reviewed the bet and the way the races would be conducted late last year. McGrail said that the commission did not have any concerns about maintaining the integrity of the races. McGrail also pointed out that two of the three stewards at the track are employed by the commission, while the other is employed by Portland Meadows. He said the stewards would treat the races like any other, watching for suspicious rides and scratches.

“The intent was to get full, well-matched fields that would make competitive wagering contests,” McGrail said.

“I don’t think it’s a likely scenario that Andy is sitting around wherever he is trying to figure out ways to get these horses to run so there’s a carryover,” McGrail said. “It’s a much more likely scenario that he’s trying to generate some interest in a small track he’s concerned about.”

Andy Stronach does not have an official position with the Stronach Group, but he has been active in the management of his father’s breeding and racing stock and has proposed a number of ideas that have been implemented at tracks controlled by his father. The Stronach Group is a private company structured as a family trust.

No one had a single unique ticket in the first two weeks of the bet at Portland Meadows, leading to a carryover of $14,091. The track plans to offer the wager through Feb. 8. Most weeks the best is offered on Portland's Monday program.

All of the races offer $3,000 purses, are run at the highly unusual distance of two furlongs, and are open to horses “by invitation only,” allowing the Portland Meadows racing office to distribute the horses in the six races as they see fit. All of the horses that compete are owned by “racing clubs” that were put together by Andy Stronach from horses he purchased privately and distributed to trainers based at the track. Jockeys in the races are randomly assigned.

While racing rules in most jurisdictions do not explicitly bar racehorse owners from running horses at tracks they own, the rules typically contain language that suggests racing commissions should make judgments on apparent conflicts of interest. All states bar ownership for racing officials who could have a direct impact on a race, such as a horse identifier or clerk of scales, and those rules often stretch to people who could influence the adjudication of any fouls, such as a director of the company that owns the track or a high-level employee, according to Ed Martin, executive director of the Association of Racing Commissioners International, an umbrella group for racing commissions.

“You can see on these lists why these people have to be excluded” from owning a horse at a racetrack where they work, Martin said. “You don’t want anyone owning a horse who is in a position to impact a race.”

Barbara Borden, the chief state steward in Kentucky, said that several years ago the stewards reached a “mutual agreement” with Ron Geary, the owner of Ellis Park, prohibiting him from running horses he owned at his track.

“That’s just common sense,” Borden said.

It is not uncommon in the parimutuel industry for a racetrack owner to also own the racing stock at the facility. In fact, generations ago, some greyhound tracks owned their entire racing populations, according to Chris Scherf, executive director of the Thoroughbred Racing Associations, a racetrack trade group. But that was well before the advent of linked bets like the pick three or pick six and the jackpot-style bets that have recently been put in place.

The Stronach Group website notes that creating bets for “life-changing payouts” is a goal for the company. Hennze reiterated the language of the statement in justifying the wager.

“The Stronach Group believes that offering jackpots and life-changing payouts are needed for tracks to survive and thrive in the modern [gambling] environment,” Hennze said.