12/22/2010 4:07PM

Q&A with CHRB chairman Keith Brackpool


Keith Brackpool will be nearing his one-year anniversary as chairman of the California Horse Racing Board when the Santa Anita meeting opens Sunday. He volunteered for the position three months after being appointed to the board in October 2009, and since then, the board has dealt with squabbling tracks, the transfer of the Oak Tree Racing Association not-for-profit meet from Santa Anita to Hollywood Park, the fallout from legislation that raised takeout rates and conditionally authorized the legalization of exchange wagering, and a request by Santa Anita’s owner, MI Developments, for a waiver of the CHRB’s mandate of synthetic racing surfaces at all major California tracks.

Through it all, Brackpool, 53, has done little to stray from the reputation that many CHRB chairmen have earned over the last 20 years as hard-nosed and sometimes confrontational. Brackpool makes no apologies: The CHRB exists, he said, to work for the benefit of the racing industry, not just one particular group, and that sometimes requires ruffling a few feathers.

In a recent interview with Daily Racing Form’s Matt Hegarty, Brackpool discussed the CHRB’s role in attempting to smooth over the problems affecting the racing industry, touching on issues such as synthetic tracks, racing dates, and exchange wagering. A portion of the interview follows.

What criteria will the CHRB use to evaluate whether it made the right decision to grant Santa Anita a waiver on the mandate that all major California tracks use a synthetic surface? I wasn’t on the board when the board issued the mandate, so I don’t think it’s fair or appropriate for me to play Monday morning quarterback as to whether that was the right decision or the wrong decision. I do think that the intent of the decision was safety, safety, safety, and we have not shied away at all from safety, safety, safety being paramount. That being said, [the benefits of artificial surfaces], if you look at the statistics, it plainly was not as black and white as people had been led to believe at the time, and I also think that there is very much a role for a dirt surface that is properly engineered and constructed. We said to the people at Santa Anita when they came to us that if they could demonstrate a significant investment in time and money in the design and construction of the track in the promotion of safety, then we would very much look at it. I think they did just that, and we right now probably have a state-of-the-art dirt track in which safety is the number-one issue.

As you said, the mandate was initially put in place under the premise that the synthetic tracks would be safer. Is there a concern that fatalities will be under a microscope this meet, and how is the CHRB addressing the shift to ensure that the surface is safe? I think we’re doing a lot of different things. One of the things we did, part of the waiver of the mandate, was to require additional veterinarian coverage at the expense of Santa Anita, and that’s been done. So I think there’s a greater degree of pre-race inspecting we are going to do.

I would be surprised if we could accurately evaluate after one meet. The question is going to be, “How does this look over the next two or three meets compared to what had happened?” Plainly, by the end, the existing synthetic surface had broke down, so I don’t know what one can compare this with, but we’ll have to take a hard look at that. We’ve got additional veterinarians, we have had a run at the leading experts in the design of this new track, and Santa Anita has spared no expense and guaranteed full access for our staff. At this stage I can say both sides have done everything they can do, and we will continue to monitor and report back to the public on how we think it’s holding up.

Critics of the CHRB have said the board plays an overly active role in the affairs of racetracks. Specifically, Frank Stronach, the chairman of the company that owns Santa Anita, has consistently been critical of what he calls over-regulation. In what ways, if any, do you agree with him? I don’t know that he has necessarily criticized a specific regulatory body. I think he has been critical of there being too many regulations in general. I’m not sure I would disagree with him there. The notion that the state legislature has been getting involved over the last 20 years at the level of detail it has, not just for our industry, but every industry, I don’t know that many of us believe that is the specific role of the legislature.

At this stage [the CHRB’s] job is to regulate given the laws that exist. I think that we have done that. A more interesting part of our role comes from the mission of the CHRB, and it’s not just to regulate, but it’s also out there to help promote the sport. This is a very unusual structure that we have in racing, where there is no central body that promotes the sport, whereas the other major league sports have done, frankly, a much better job for the central coordination of that marketing and promotion. Perhaps we have taken on some of that, and I see the role as part regulatory and part promotion.

On that front, Santa Anita’s owner appears to be set on claiming more racing dates on the calendar, and Del Mar has also indicated that it would like to expand on the number of racing dates it runs, especially if and when Hollywood closes. With acute horse shortages that are only supposed to get more serious with declining foal crops, how are you supposed to accommodate those requests in the future when the prevailing trends seem to call for a reduced number of race dates? I don’t know that everything has to be the same as it has been. The greatest problem our sport has is the mantra that we’ve always done it this way. We have to lift our heads collectively and look to see what has changed. I don’t know that a five-day-a-week year-round is viable. That’s something we have to consider: maybe less racing days a week, but more racing weeks. There are things like that we can look at. The calendar does need a rework. We’ve started some pretty good dialogue on that, and I think we’ll see the fruition of that in the next 60 days.

Why, specifically, should regulators be involved in setting dates? Why isn’t that just a function of the marketplace? First of all, it’s state law that mandates how many days a certain district can have. It’s not completely within the CHRB’s discretion to just do away with that. Those state laws existed at the time that both MEC and, subsequently, MID, purchased the assets. So it’s not as if they purchased assets and somebody changed the rules. The rules have always been there. What I have said to Frank is that he has some valid points on the dates, and that we should all work together to try to come up with a consensual calendar. If necessary, we can go back to the legislature and make the necessary changes to accommodate that.

Your tenure at the CHRB has led to some acrimonious exchanges, particularly with officials of MI Developments. Have those exchanges affected your ability to regulate the sport or come to compromises on situations such as the dates, where you’re looking to have a unified whole? I don’t think we’re going to get many places by having a requirement that we have unanimous consent on every issue, because you’re not going to get there. Given that you’re not going to get unanimous consent on many issues, our role in this is to listen and ultimately make a decision on which way we are going to go. The difference between, perhaps, our role and my role as chairman and someone sitting in the witness chair opposite, is that they are there, quite rightly, to represent their own special interest. That is not a pejorative term. They are there to represent whatever entity they are paid or otherwise authorized to represent. We are trying to look for the greater good. That means that naturally, occasionally, there is going to be some acrimony.

In the particular case of Santa Anita and MID, there was certainly a set of difficult hearings at the beginning of the year, but we resolved the track issue, we resolved the waiver issue, and at this stage, all of us are very pleased with how the relationship is going and how we’re communicating. To me, it’s where you end up. What’s the end result of this? The acrimony has to have a purpose.

An issue where the Thoroughbred industry is going to have to have a united front is exchange wagering, which will become legal in 2012. Currently, there are two big concerns about the practice: cannibalization of existing handle to the detriment of racing’s current revenue sources, and the potential for the practice to lead to race-fixing. How can the CHRB address those concerns? We have to understand what the legislature approved when it approved exchange wagering. What it said was that exchange wagering can be legal commencing in May 2012, only if the CHRB has approved the rules and regulations for that. To me, it’s much better that the CHRB, with the consent of all the various horsemen’s groups, trainers, everybody else, spends the next 12 months working through all of those issues, and if we all get comfortable, then we’ll have a platform to go ahead. I felt that was a far safer and more productive method of exploring this than letting lobbyists negotiate the language out of context at the 23rd hour in a legislative session.

So the points you raise are the points that have to be worked through. They’re valid concerns, and they have to be worked through. I see light at the end of the tunnel for doing it, and one thing we can’t afford to do in racing right now is to dismiss new ideas out of hand. We have to work through the issues.

Perception is many times stronger than reality, so, theoretically, should you be able to bet on a horse to lose? Does that ability weaken racing’s integrity simply by its existence? It all depends on how you pose the question. Every time I bet on a horse to win, I guess I’m hoping that the other horses lose. So the pejorative way is to say, you’re betting on a horse to lose, but I don’t view it this way.
What the data has shown so far is that the type of player that is playing the exchange-wagering game is a very, very different bettor to that playing the game through the parimutuel system. That goes with in-race wagering, it goes with arbitraging the odds. I just think it’s a completely different set of players who are there. For it to work in California and for us to give it the license to go-ahead, we’re going to have to be convinced that the benefits significantly outweigh any of the potential problems that are there.