IHA Should be KIA

Bill Oppenheim wrote an absolutely dandy piece in the TDN yesterday (pdf) about the debate and obfuscation of the Breeders Cup decision on lasix. In the piece he examines the veto power and machinations of the 1978 Interstate Horse Racing Act that leads up to stand offs such as this.

• Also a factor was that, in 2011, when the Board created the new race-day medication policy, TOBA's Graded Stakes Committee attempted to follow suit, and there were initiatives by The Jockey Club and in various states to ban race-day medication. Ultimately all these initiatives foundered on the same rock--the 1978 Interstate Horseracing Act which made simulcasting across state lines legal, also included provisions requiring consent (in most states) by Aauthorized horsemen's groups. Once the horsemen discovered they really did have veto power, the game was up.

Steve Zorn took exception to this and noted on his blog:

•  Oppenheim finds the root of all evil in Section 3004 of Title 15 of the United States Code – the section of the Interstate Horse Racing Act of 1978 (IHA) that gives local horsemen’s group a veto power over simulcast signals to and from their tracks.  In Oppenheim’s view, the aristocrats of the racing world, embodied in the Jockey Club, the Breeders Cup Board and the TOBA Graded Stakes Committee, were all set to save US racing by eliminating the use of Lasix, when those pesky horsemen discovered that the IHA gave them veto power. 

As with most things in horse racing: You're wrong, I'm right, take that. Then we go back to the status-quo blankie, where we feel safe. 

I think both of them are probably right. Oppenheim is completely correct an act written in 1978 in a world where racing now competes with lotteries, internet betting, poker and everything else is obsolete. Zorn is right that you and I who buy horses can't be walked on like a doormat.

Updating the IHA to reality, i.e. present day 2013, would be warranted.

Having a horsemen group give a yeah or nay with veto power if a track wants to, for example, lower takeout or change a betting product to compete is not the way the IHA was intended to function. But that's what we see today. A track might work on a business plan to do something big to grow, and in one meeting - no more than 10 minutes long perhaps - a couple of fellas across the table can say no. That's that.

What's worse, in some jurisdictions the relationship between tracks and a horsemen group can be so acrimonious, even when something good is proposed, it's rejected because of that dislike. We saw a bit of that in Ontario when a horsemen group was finally replaced by the rank and file at Woodbine. The damage was already done, though.

That's crazy, or as the kids say 'cray cray'.

No one is saying they don't have a say, they should. What I'm saying is, when GM wants to set the price of their new car they're building they use market research, economists and others to do that. The guy who makes the rubber for the tires in Akron can't say "no".

Conversely, it doesn't mean the rank and file has no power. If GM wanted to slash wages by 50% and cut a half a million people, the union does have recourse. They have to, with economists, hard data and a business case show why their way is better. This might go to an arbitrator to be solved.

In California we are seeing a bit of this now with the pick 5, and did a few years ago with the takeout hike. The tracks have made a wonderful case about the pick 5 - how it grows handle in each of the races in the sequence, how the lower rake has worked and so on. The TOC can just say no. They don't have to make a business case. They don't really have to do anything. There's a good chance this bet will be scrapped, where everyone is a loser.

For those of you on Andy's California email list, he put it this morning this way relating it to a Mike Pegram McDonald's: 'A chicken farmer doesn't tell him what price his McNuggets should be'

For simulcast agreements or expansions, no business case, no arbitrator, nothing has to occur. A horseman group can just say "no" and hundreds of thousands of customers can be screwed.

All because an IHA was written for a different time, in a different world.

The world has changed. The gambling landscape is 180 degrees different than it was 35 years ago. The urbanization of North America and their view on how animals are treated for human gain is looked at 180 degrees differently than it was 35 years ago.

This business must change. It's handcuffed to do so by well meaning, but ineffective acts of 35 years ago. For horse racing to move forward, I believe the IHA must be changed. Not eliminated, but changed to reflect the world we live in.