THE KOHLER PAPER Fred Kohler must have had a crystal ball. This paper he wrote 15 years ago in the spring of 1999 might as well have been written last week. Back then there were 2 horsemens associations, the VHA and the VHBPA. Mr. Kohler was a director of the VHA. The VHA fought for more live race days for rank and file horsemen, while the VHBPA supported Jacobs and his plan for shorter meets with higher purses. Whats ironic is that after you read this paper you will realize that the VHBPAs agenda today, was the VHAs agenda 15 years ago. Too bad the VHBPA was too arrogant to listen back then. Maybe Va Racing wouldnt be in the fix it is in today. And one other thing. I remember when Colonial said it was gonna find a new horsemens association to replace the VHBPA. In an opinion piece in the Richmond Times Dispatch VHBPA Executive Director Frank Petralamo said “ Track management undoubtedly believes it can reach a sweetheart deal with a compliant in-house organization to reduce, if not eliminate, live racing in Virginia.” I also heard him repeat that statement at last weeks VRC meeting. Well guess what Mr. Petralamo, THE VHBPA IS THE COMPLIANT IN HOUSE ORGANIZATION YOU ARE TALKING ABOUT AND HAS BEEN FOR 20 YEARS. Besides, why would Jacobs want to get rid of you guys??? He owned the VHBPA at the negotiating table and as a result Virginia has 0 live race days this year. GREAT JOB. KEEP UP THE GOOD WORK LOL. THE KOHLER PAPER, published in the spring 1999 issue of Virginia Issues and Answers Lets start with Mr. Kohlers credentials: C. Fred Kohler is the owner of Kohler Bloodstock Company, which sells and buys thoroughbred horses for clients. He has raced and bred thoroughbred horses for over 25 years. Currently a director of the Virginia Horsemens Association, he was president of the now defunct Virginians for Horse Racing Inc., which led the effort to legalize pari-mutuel wagering in Virginia. Additionally, he is a past president of the Virginia Thoroughbred Association, which he also served for 20 years as a director, and is a past president and trustee of the Virginia Equine Educational Foundation. Does horse racing have a future in Virginia? by, C. Fred Kohler FACTORS CONTRIBUTING TO THE CURRENT STATUS OF RACING After nearly a 100-year hiatus of horse racing in the Commonwealth of Virginia, the legalization of pari-mutuel wagering set the stage for a revitalization of Virginias horse industry. Throughout the past 10 years, new racing facilities in other states could not find a formula for success, but Virginias horsemen were optimistic that the Old Dominion would be different. Virginia possessed a proud heritage of thoroughbred horse breeding and a two-million-plus population base with high per capita earnings in two geographic locations. It had an established infrastructure of horsemen, veterinarians, and farriers. Established training and other service facilities would compliment the establishment of a new racing complex. Virginia would be the exception. Tragically, a glowing opportunity is quickly being wasted. How could this have happened? The initial pari-mutuel statute required one day of racing for each day of off-track wagering. This requirement was initiated to ensure that Virginia would have a viable racing industry and not simply be a vehicle to permit simulcasting. Since the requirement attracted no investors, the statute was amended to require a minimum of 150 days of racing. The statute was further amended to grant the Racing Commission the authority to approve fewer than 150 days during the first five years of racing. Colonial Downs is now proposing a statutory amendment to expunge the current statutes 150-day racing requirement. First and foremost, Virginia needs more than the 25 days of thoroughbred racing that Colonial Downs has applied for in 1999. Its contractual requirement with horsemen to provide a $150,000 daily purse structure is not conducive to achieving an expansion of racing days. A lower daily purse structure would spread the available purse money, enabling more days of good racing and providing the vast majority of Virginia horses with more and better opportunities to win races. It would reduce the enticement for ship-ins of superior quality horses from other states, resulting in the retention of more purse money in Virginia. A case in point is the first running of the recent Virginia Derby. Not one Virginia-based horse was in the money, resulting in the races $250,000 purse leaving the commonwealth to enrich those out-of-state owners who took advantage of an attractive soft spot in which to compete. While a $150,000 daily purse structure does encourage higher quality racing, it does not necessarily increase wagering. The primary factor that encourages wagering is a full field of horses in a given race. This permits more exotic wagering and better wagering odds. The quality of the horses running and/or the purse level is secondary. Many races programmed for higher quality horses produce lower wagering as they are run with less than full fields due to the paucity of horses they are designed to attract. The Virginia Horsemans Benevolent and Protective Association (VAHBPA), recognized by Colonial Downs to represent Virginia horsemen, was organized and structured to grant a few individuals negotiating authority on contractual agreements that would not be subject to ratification by the membership at large. These few individuals are currently wed to a creed insisting that Colonial Downs structure a racing program offering a minimum daily purse of $150,000, which, in their opinion, is essential to an incremental increase in wagering. COLONIAL DOWNS High profile races such as the Virginia Derby would be appropriate and beneficial when racing in Virginia is well established and wagering has enabled, as a minimum, a daily purse structure of $100,000 over 100 days of thoroughbred racing. Absent such conditions, a purse for a particular race should not exceed $50,000, permitting more distribution to races where most horses compete. Racing cannot survive unless owners have a chance, at least, to break even. This prepossession to enhance quality at the expense of the vast majority of owners undermines the viability of Virginia racing. Colonial Downs should postpone the ego trip of offering big name races that permit sizable purse moneys to leave the commonwealth. While such races do generate increased wagering and attendance on the few days they are run, they are detrimental to Virginias current overall racing program. Colonial Downs losses during the first two years of operation should have been expected and anticipated as in the early years of most new business ventures. Such loses belong to Colonial Downs and should be paid for with an infusion of working capital that would also anticipate losses that may be incurred over the next several years. Rather than accepting its responsibility, however, track management has threatened bankruptcy unless outside sources of financial relief are forthcoming. Such sources would include tapping into the Virginia horsemens purse account and reducing the horsemens percentage of simulcast wagering receipts generated at facilities other than the track location and its six satellite facilities. VIRGINIA RACING COMMISSION The Virginia Racing Commission has used kid gloves in addressing Colonial Downs many departures from the commitments presented in its license application and other commission directives. The commission must now assert, in no uncertain terms, that its licensees privilege to operate will be revoked if financial viability has not been restored by a set date in the near future. The license also should be rescinded absent a practical plan that firmly commits to the sustainment and expansion of live racing. The commission has been vested with plenary power to prescribe regulations and conditions under which racing and wagering shall be conducted for the sustenance and growth of Virginias horse industry. Licensees shall be permitted to conduct such activities as a privilege that may be denied by the commission at its discretion in order to effectuate the purposes set forth above. Colonial Downs has not demonstrated a capability or desire to sustain and grow a vital component of Virginias horse industry. This in itself provides strong justification for a revocation of its license. With its plenary powers, the Racing Commission has a responsibility to require Colonial Downs compliance with the intent of the statute. Absent such compliance, the commission should rescind the license it has granted and entertain other license applications from whomsoever wishes to apply. PARI-MUTUEL RACING STATUTE Virginias many industries seek to improve their respective causes by lobbying the General Assembly each year, and the horse industry should not be afraid to do likewise. Changing circumstances require changes in a racing statute that currently does not adequately address the interests of those providing a vital product to a racing program: the horses. Simulcasting is defined as the simultaneous sending or receiving of live racing programs, via electronically transmitted signals, to video monitors at locations distant from the site initiating the signals. Currently a track owner has the statutory authority, subject to commission approval, to simulcast its racing program to six off-track facilities within the commonwealth. The statute should be amended to permit unlimited facilities. It is illogical to permit the choice of pari-mutuel wagering, via local referendum ballot, only to Virginians within six designated areas. The statute presently permits a Virginia track owner to retain approximately 18 percent of total simulcast wagering, which is to be distributed between the track owner and the horsemens purse account by contractual agreement between the parties. The statute should be amended to deny any usage of this retainage by the track owner until a contract has been negotiated between the track operator and horsemen. VIRGINIA HORSEMEN Those horsemen contracting with Colonial Downs must rethink their position as to daily purse structure in order to permit more racing days and competitive opportunities for Virginias horsemen to race successfully. The quality of Virginia racing should correspond to the general quality of the states horse population. If racing can be established successfully, it will be a catalyst to increase the quality of horses and racing, each in unison with the other. Virginias thoroughbred horse industry is comprised of two factions: those who breed and raise horses and those who own, train, and care for the final product, the racehorse. The latter group represents a majority whose interests have been and are being subordinated to the interests of the Virginia Thoroughbred Association, an organization historically formed to serve the interests of breeders. This group, in turn, was instrumental in the formation and functional control of the VAHBPA, the entity recognized by the Racing Commission and Colonial Downs to represent Virginias horsemen in contractual negotiations with track management. While breeders have a genuine concern that racing be successfully established, their current financial state has resulted in the acceptance of a few crumbs thrown their way instead of resisting the commissions coddling of Colonial Downs and track managements continual diminution of live racing. Breeders certainly would be distressed if live racing is further diminished. However, the statute provides the Virginia Breeders Fund with 1 percent of whatever the mix of simulcasting/live racing may be. Thus, live racing is being preempted by virtue of a survival mode that permits interstate simulcasting to be the principal source of revenue from pari-mutuel wagering. An industry that cannot exceed a survival existence is doomed to eventual extinction. Virginia horsemen must insist on more than the half loaf that simulcasting alone will provide. An extended live racing program, offering ample racing restricted to Virginia-bred horses, is the vehicle that will permit Virginias horsemen a chance to transcend mere survival. EPILOGUE Despite Virginia horsemens hopes and the General Assemblys intent that live racing would be a productive part of Virginias agricultural economy, current trends are not encouraging. Wagering and attendance are far below expectations. It is doubtful that Colonial Downs present location, management, and inability to access Northern Virginia with off-track wagering sites can engender survival. Access to Northern Virginia is critical, and yet, for the foreseeable future, this can be accomplished only with a track in that location. How this could be implemented is a very important subject that should be seriously considered by the Racing Commission. Unless all parties are prepared to reevaluate present and past positions and be receptive to alternative proposals, there will be a requiem for a racing industry that never really left the starting gate due, in part, to those jockeys whose collective hands have been in control of its reins once it entered the gate.
Posted on: Sun, 29 Jun 2014 18:30:43 +0000
Trending Topics
Recently Viewed Topics
© 2015