It seems as if the Travers Stakes at Saratoga Race Course is dominating the conversation as we draw closer to tomorrow’s race. This morning on the The Capitol Press Room with Susan Arbetter, Karl J. Sleight, leader of the Harris Beach Racing and Gaming Industry Team, noted the activity this weekend at Saratoga is taking the worldwide destination for racing to a new level with the appearance of Triple Crown winner American Pharoah. Karl had watched with thousands of other fans American Pharoah galloping in preparation for Saturday’s race. The thoroughbred looked strong. But Saratoga has a long history of being a competitive course where some of the greatest horses of all time have not won. Surely, the race will be an attention getter. Karl will appear on Capital Tonight with Liz Benjamin tonight to talk about Travers and other topics on racing and gaming in New York.
It’s the talk of the horse racing circuit and beyond: Triple Crown winner American Pharoah’s appearance tomorrow at the Travers Stakes at Saratoga Race Course. Karl J. Sleight, leader of the Harris Beach Racing and Gaming Industry Team, will offer his insights and preview the race this morning at 11:00 a.m. on The Capitol Pressroom with Susan Arbetter. Be sure to tune in.
A hot topic at this month’s Saratoga Institute on Equine, Racing and Gaming Law Conference was the question of legalized sports betting. Yesterday, the U.S. Court of Appeals for the Third Circuit struck down a New Jersey betting law (See NCAA, et al v Governor of New Jersey, et al). In a 2-1 decision the court found that the New Jersey law allowing betting at casinos and racetracks violates the federal Professional and Amateur Sports Protection Act of 1992 because it “authorizes by law sports gambling.” PASPA was passed by Congress in 1992 and prohibits state-sanctioned sports betting. This was a win for professional sports leagues and the NCAA.
The court acknowledged New Jersey’s salutary purpose in attempting to legalize sports gambling to revive its troubled casino and racetrack industries and further acknowledged that PASPA is not without flaws such as the spread of illegal sports gambling and a lack of transparency.
The court noted that those states wishing to legalize sports betting should seek Congressional action noting that “[u]nless or until that happens, [the court] is duty-bound to interpret the text of the law as Congress wrote it.”
On August 11 and 12, 2015, Karl Sleight, Allen Molnar and Mitch Pawluk will be presenting at the Saratoga Institute on Equine, Racing and Gaming Law Conference at the Saratoga Hilton in Saratoga Springs.
Mr. Sleight will moderate a panel on “Internet/Mobile/Social Gaming and Virtual Currencies.” Mr. Molnar will participate in a panel discussion on “Know Your Customer: Anti-Money Laundering and FinCEN Compliance.” Mr. Pawluk will participate in a panel discussion on “The National Picture: Horseracing’s Place in the Betting World.”
Harris Beach is a sponsor of the Institute. The Saratoga Institute on Equine, Racing and Gaming Law Conference, organized by the Government Law Center of Albany Law School, is an annual program dedicated to exploring the legal and public policy implications of racing and gaming in New York state and the nation.
By The Editorial Team
Here at the blog, we aim to continuously keep you apprised of what is coming next in both the racing and gaming industries. With three casino applicants recommended and awaiting licensure, we will be turning a portion of our attention to the next big issue—the future of the New York Racing Association (NYRA) and racing in New York state. We will continue to cover the latest news and provide commentary on all things NYRA as the Reorganization Board embarks on what is expected to be a new chapter. Want to follow along? Subscribe to the blog by entering your email on the right hand side of our home page to receive notifications of new blog posts by email. Alternatively, if following us on Twitter, search the hashtag #NYRAwatch for the latest news and commentary.
As first reported by the Albany Times Union, a number of New York State Senators and Assemblymembers signed a letter this week (below) calling for Governor Andrew Cuomo to “move as quickly as possible to transition [the NYRA Reorganization Board] back to a nonprofit racing association.” As readers of this blog will recall, in 2012 the previously private, not-for-profit NYRA was replaced by a publicly-controlled NYRA Reorganization Board consisting of appointees of the governor and legislative leaders (prior coverage: “Governor Cuomo Signs Legislation to Establish NYRA Reorganization Board”). The legislation creating the Reorganization Board only called for its term to last three years. This past spring, as part of state budget negotiations the term was extended to four years (prior coverage: “NYRA’s Privatization Addressed in New York State Budget”).
This week’s letter calling on the governor to transition NYRA back to a private, not-for-profit racing organization cites concerns that the temporary reorganization board does not have the ability to make necessary long-term decisions essential for continued success in the racing industry. In particular, the letter raises concerns over the potential negative impact on the Saratoga Race Course, which opened its 40-day meet last Friday (July 24, 2015). Notably, the letter was signed by both chairs of the legislative committees overseeing racing in New York state—Senator John Bonacic and Assemblymember Gary Pretlow. What lies ahead for NYRA and racing in New York state is unknown. The only thing you can bet on is that we will be here following the latest advancements and keeping you apprised of the issues of the day.
American Pharoah’s performance in the Belmont Stakes cemented his place in the pantheon of American racing history alongside immortals like War Admiral, Citation, Secretariat, Seattle Slew and Affirmed. The feat was 37 years in the waiting and no one knows whether it will be another 37 years before we see his likes again. Or, are we about to enter another golden age of racing, like the 1970s when there were three Triple Crown winners. Time will tell, but the immediate question for many is: What’s next for American Pharoah?
First things first. It will take a few days to see how American Pharaoh came out of the race. Things like energy level and regaining his normal eating habits are telltale signs of what this race meant to American Pharoah physically. Assuming there are no issues there, published reports indicate that before the Belmont Stakes AP’s owners, the Zayat family, struck a deal with Coolmore Ashford Stud the Ireland-based breeding operation that operates an arm in Kentucky. The reports indicate that the Zayat family has retained control over American Pharoah’s racing career through 2015, and thereafter he will become a stallion at Coolmore. Cutting the deal before the Belmont was another big bet by both Coolmore and the Zayat family. AP’s value if he had not won the Triple Crown would certainly be less, but now as the only living Triple Crown winner in several generations of equine history to spread his genes and imprint the breed takes it to another level.
Although the details of the breeding rights deal were not released, the business pressures that now exist will be significant because of the natural concerns and risk that exist with horse racing. To give a sense of these elements, if American Pharoah continues on the logical path, the soonest we might see him race is in August possibly at Saratoga (Jim Dandy/Travers), Monmouth (Haskell) or Del Mar (Pacific Classic). Thereafter, there could be a race against older horses, and then the logical final race of American Pharoah’s career would be the Breeders’ Cup Classic on October 31 at Keeneland in Lexington, Kentucky. If American Pharoah won all of these races, he would add approximately $3-4 million to his earnings.
By contrast, once American Pharoah enters stud he is far more profitable. Each opportunity to breed to American Pharaoh will conservatively be priced at $150,000. The rules of thoroughbred racing do not allow artificial insemination, so these are live “covers” thus limiting the annual breeding opportunities, conservatively to 150. This does not take into consideration shipping AP to the Southern Hemisphere where the breeding calendar (opposite of the Northern Hemisphere calendar) allows for even more opportunities. The conservative math comes out to $22.5 million per year in gross revenue. Assuming he has a breeding career that (again conservatively) lasts 15 years, that’s $337.5 million in gross revenue. Variables including the success of his offspring on the track will affect this, but since the best mares in the world will be coming for a “date” with American Pharoah, the chances of his progeny having success on the race track are very good. With that, his value will increase and a stud fee matching that of legendary stallion Storm Cat ($500,000 per cover) is clearly within reach, as is the opportunity to generate career gross revenue of over a billion dollars.
Back to the business pressures. American Pharoah is the messiah that the racing world has wanted for 37 years. The hope is that a horse capturing the Triple Crown would reignite interest in horse racing, broaden the fan base, and encourage people of means to become owners and participate in the “Sport of Kings.” To see the 90,000 fans at Belmont cheering on Saturday, there may be some degree of logic to that. The statements by Mr. Zayat immediately after the race that he fully intends to race AP for the remainder of 2015, and not immediately retire him to stallion duty has to make everyone in horse racing truly grateful. With the kind of money that is waiting for Coolmore beginning with the 2016 breeding season, lots of folks will be holding their breath and even the most minor hiccup in American Pharoah’s training regime could upset the stated intent to race for the remainder of the year.
Let’s hope for smooth sailing and a few more races to see one of the greatest athletes in American racing history do what he clearly was born to do. As for his next race, if the Zayat family is looking for challenges left to conquer, the historic Saratoga Race Course would seem to offer the most. Both Man O’ War and Secretariat lost at Saratoga. Will we ever find out how American Pharoah would fair at Saratoga? It’s now up to the Zayat family. Stay tuned.
One of our favorite blog posts is our “The Year in Preview” edition, which we post at the beginning of each calendar year. The annual post identifies the big issues for the coming year in racing and gaming and gives our readers a sense of how we think they will play out. The issues we take a hard look at are a mix of legal, policy and political, with a little fun sprinkled in. In our inaugural edition in 2013, we waded into the creation of the new Gaming Commission, budget issues impacting racing and gaming, as well as the constitutional amendment to allow commercial casinos. In 2014, we forecasted the year long time line of events in the casino selection process.
Armed with a sense of fearlessness from our previous experience, frankly, we outdid ourselves for 2015. We are still waiting to see if many of our other predictions for this year come true, but we know for better or worse one of them we be settled late in the afternoon this Saturday. Here’s is the conclusion of our blog entitled “2015: The Year in Preview.”]
Our boldest prediction for 2015 is that on June 6 at the Belmont Stakes, for the first time since Affirmed in 1978, the world will celebrate a Triple Crown winner. This equine athlete will take the nation by storm and the name of the Triple Crown winner is ______________. Hey, c’mon, we’re bold, but we’re not that bold.
Cheers for a great 2015. Enjoy.
– 2015: The Year in Preview, January 5, 2015
Like millions of people around the world, we’ll be rooting for American Pharoah to make our prediction come true. After overcoming a far outside post in the Kentucky Derby, the rail post in the Preakness, and most importantly the deepest group of 3 year olds in the last 15 years, if he is successful in “The Test of the Champion” he will be a true champion and deserving of joining the likes of War Admiral, Citation, Secretariat, Seattle Slew and Affirmed as an American racing legend.
Good luck to his connection, and Go Pharoah !
Money talks in Las Vegas, but cash always seems to speak a little louder. Whether it’s giving a nice tip to your server even though your drink was free, one to your blackjack dealer for “giving” you a winning hand even if the cards were entirely random, or a maitre d’ for helping you find a better table, regular visitors to Vegas find that showing a little gratitude can go a long way.
Cash commonly has been used at poker tables to keep games “in play” when chips run out. Though permissible casino floor games are officially played with chips, veteran players have learned that it’s never hard to add additional currency to a pot, especially if you’re doing particularly well and don’t want to take a break to change your chips. Dealers, pit bosses and security officials all seem agreeable with this tradition – regularly declaring “cash plays” whenever a player pulled out a bill.
Starting this spring, however, most major Strip casinos have silenced this voice in poker rooms, and now require that all poker games be played entirely with chips.
In March, MGM Resorts announced that, starting April 1, cash will no longer be playable at its nine poker rooms. It joined Aria and Bellagio in making this switch, and within a month, all of the Station Casinos, Wynn, Venetian and Caesars Palace followed suit. None of them made official proclamations about the switch – guests simply encountered the change, and it was also reported on by local gaming media.
However, the move wasn’t entirely unexpected due to increasing scrutiny being given the gaming industry by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), and extra attention to anti-money laundering (AML) initiatives. FinCEN has been increasingly aggressive in encouraging casinos to account for every transaction, and for sizeable winners to complete paperwork before being presented with their winnings. (Most recently, FinCEN issued uncommon “Geographical Targeting Orders” affecting businesses in certain zip code zones of Los Angeles and Miami it deemed particularly vulnerable to money laundering activity through the regular use of cash by customers for “large-ticket” purchases. Businesses operating in the designated geographical locations now must report cash transactions to the government in greater detail, and at lower threshold amounts, than AML regulations ordinarily require.)
While casino owners may quietly grumble about the increased regulation and gradual shift from the city’s traditional “anything goes” reputation, they also seem willing to be seen as complying with still-evolving gaming laws.
Poker in poker rooms especially has stood out as a table game with slightly more lax views on playing with cash vs. chips. Players adding $100 bills to their bets were not uncommon. It certainly sweetened the pot and was a simple work-around for tables with a maximum amount of chips per bet.
But it also created security concerns – besides the potential risk of players not reporting any cash winnings, it also increased the potential for theft or accidents – it’s easy to identify which player may have dropped the blue chip, but harder to reclaim a missing $100 bill.
Players will likely adjust to the new chips-only rule adequately. They may remember to change extra money before a big tournament, or casinos may hire extra runners to change money when needed. What’s less known is how this change will impact the World Series of Poker, traditionally held at Caesars Palace. The role of currency for supplemental bets seemed like part of that event’s format.
The National Thoroughbred Racing Association issued a statement today (May 1, 2015) saying the proposed legislation by Senator Tom Udall and Representative Joe Pitts to repeal the Interstate Horseracing Act of 1978 “is a shameless publicity stunt that mischaracterizes one of the nation’s most highly regulated sports.”
The NTRA said it “strongly opposes this most recent attack on horseracing by Sen. Udall and Rep. Pitts, who have introduced federal legislation that threatens to destroy the economic viability of the $26 billion horseracing industry and the 380,000 jobs it supports nationwide.”
Senator Tom Udall and Representative Joe Pitts introduced legislation yesterday (April 30, 2015) to eliminate most wagering on horseracing, encouraging the sport to end doping and crack down on cheaters. In a press release, Udall and Pitts said “horseracing is the only sport specially permitted by federal law to offer online gambling and interstate betting, yet widespread corruption has stained the industry.”
Udall and Pitts noted that almost every horse is given race-day medication — banned in other countries — and no uniform medication rules or doping penalties exist. They cited a New York Times story from 2012, that pointed out “doping undermines the safety and viability of the sport, and 24 horses die each week from racing injuries — an alarming fatality rate likely caused by the misuse of permitted medication and abuse of illegal drugs.”
The proposed legislation is certainly an industry “attention getter” with the Kentucky Derby set for tomorrow. And in light of that, Udall noted: “Out of sight of the spectators in the grandstand, 19 of the 20 horses competing in this year’s Kentucky Derby will be injected shortly before post time…We must stop the abuse and restore integrity to this once-dignified sport.”
“Horseracing is the Sport of Kings. Unfortunately, however, it’s plagued by too many unscrupulous trainers, owners, veterinarians and other race track officials who race sickened or injured horses, pumping them full of painkillers or other performance enhancing drugs in order to try to win at all costs,” Pitts said.
The bills are named after racehorses who were given drugs to race and were euthanized on the track. Udall named the Senate bill after Teller All Gone, a 2-year-old Quarter horse who fell after the wire at a race in New Mexico. Pitts named the House bill after Coronado Heights, a 4-year-old Thoroughbred who died racing after receiving a diagnosis of early degenerative joint disease.