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Jim Gallagher New York Thoroughbred Horsemen's Association

Thur Aug 30, 2007 at 12 p.m. (ET)

Nowhere in the country is the current state of Thoroughbred racing more turbulent than in the state of New York. To help sort out the issues and discuss possible outcomes, we welcome Jim Gallagher, the executive director of the New York Thoroughbred Horsemen's Association.

Gallagher, a former consultant for the Racing Medication and Testing Consortium, is responsible for overseeing the daily operation of the New York THA, which represents horsemen at Aqueduct, Belmont Park, and Saratoga.

Gallagher has served as chief of racing operations for the New York State Racing and Wagering Board and vice president of regulatory compliance and pari-mutuel operations for New York Racing Association (NYRA), which is now fighting to retain its license to operate racing at Saratoga, Belmont Park, and Aqueduct. There are three other bidders interested in pursuing the franchise, of which NYRA's legal ownership expires Dec. 31. The other bidders are Empire Racing Associates, Excelsior Racing, and the Australian-based Capital Play.

Outside New York, Gallagher was executive director of the Kentucky Horse Racing Authority, which adopted more stringent racing medication rules, hired more veterinarians, and began implementing a new breeders’ incentive program under Gallagher’s tenure. He also headed up the National Thoroughbred Racing Association's Racing Integrity and Drug Testing Task Force.

Join us here this Thursday at noon or use the form below to Submit a Question now.

Florence, KY:
Jim, Congratulations on your new position and your achievements in KY. After holding a racing license in many states and trying to follow the initiatives of many of the state racing commissions, I have begun to question how much can be achieved to better racing by states acting individually. Whether it's the initiatives of the RMTC or model rules from the ARCI, can anything truly be made mandatory "across the board"? Do you feel a need for a National Commissioner such as they have in other sports?

Gallagher:
Thank you. All racing states need to work on a more collective and collaborative basis. Fortunately, the majority of racing states are working under the umbrella of Racing Commissioners International. In that regard, there has been significant support of the equine medication and penalty guidelines that have been proffered by the RMTC and model racing rules as proposed by RCI. In my opinion, there has been more success in recent years with stakeholder groups working for the collective good of the game than ever before. I don't know that we need a racing czar but we do need all the constituency groups to work together to make an impact for the benefit the industry.

Harrisburg, PA:
With the expiration of exclusives pending, among other upcoming changes and the addition of Hal Handel to NYRA, will PA residents have access to your signal? Will non-residents have access to wagering services? Thanks, Chuck.

Gallagher:
I honestly do know the answer in this instance, however, as an advocate for the New York horsemen, we need to make our product available to the broadest base of fans possible to garner the most pari-mutuel handle and elevate the purse structure to ensure the continued investment of owners and trainers in our industry.

Barboursville, WV:
Can you explain to me how a viable enterprise like New York racing can lose money? This seems absurd to me.

Gallagher:
This has been spoken about for many years. Simply put, the model created within the racing law in New York is broken and needs to be re-worked. As the franchise process winds its way to a conclusion, a significant revision to the racing law is on the horizon. The host track absorbs significant overhead costs for conducting live racing and for the maintenance of ancillary training facilities to support the live racing product. This is further exacerbated by the pricing model that was established when simulcasting began. The inception of a video lottery terminal operation will help in this regard.

Newark, DE:
Without the fans (bettors), there would be no horse racing. The average fan goes to the track to try and win money. You can't win much on Win, Place, Show and Exactas. Why doesn't N.Y. tracks offer more Pick 4's and Superfectas? Saratoga had some big fields this year. There could have been some nice pay outs.

Gallagher:
As the Executive Director of NYTHA, the betting menu provided by NYRA is not part of my day to day responsibilities. This issue is better addressed to NYRA management and its V.P. of Pari-Mutuel Operations. I know these types of initiatives, dime superfectas and lower takeout rates for Pick 4s at Ellis Park were well received by the wagering public.

If this were to increase to overall handle at the NYRA tracks the horsemen would be supportive of such a change.

Sydney Australia:
Hi Jim. What are your ideas to attract the younger generation to the races and make horses household names again? Also why are 3-year olds expected to run 1 1/2 miles in the Belmont yet no race for 3yos & over on dirt are this distance since the Jockey Club Cup went to 1 1/4 miles? My tip, probably next Triple Crown winner will have Point Given, Lemon Drop Kid, A. P. Indy or Affirmed as the dam sire.

Gallagher:
I understand that we live in the age of simulcasting and 80-90% of handle is bet off-track and that we need to better cater to the wagering public that supports the industry, but the beauty of the racing product is that it can prosper if it is handed down generation to generation.  Saratoga, Del Mar and Keeneland are prime examples of this.   Grandparents and their kids and their grandchildren attending a day at the races make a lasting impression on them and bring them back to the track. That may be too simplistic but it works.

Further, we need to foster writers that have an interest and love of the game which would go along way to help the casual fan base.  This may be accomplished through Blog sites and not major newspapers in the future.

Make a trip to the backstretch to watch horses working out available to the public.  People love horses and given the opportunity they could learn more about the many moving parts that make our game so great. 

The Triple Crown is the most difficult feat in sport.  Part and parcel of that is the “Test of a Champion” – The Belmont Stakes at 1 ½ Miles.  It is tradition and will remain so.

Valley Stream, NY:
Jim, without answering politically correct, who would you like to receive the New York racing franchise? Thank you.

Gallagher:
That's any easy one, an entity that puts horse racing first and foremost. With the integration of a prospective gaming operation, we want to make sure the horse racing remains the primary focus. Further, that the infrastructure of racing is significantly upgraded, including but not limited to, the improvement of the living conditions for backstretch workers, the overall facilities and the racing and training surfaces upon which racehorses run. These are priorities that must be addressed.

Lexington, KY:
It seems as though the holding/detention barn at NYRA has not changed the trainer standings and has caused hardship on the trainers and their employees. I am an owner and pay each time I run a horse in New York. Couldn't a small percentage of handle nationwide pay for "super" testing such as in the Olympics and other world games that athletes are accustomed to with state commissions giving major penalties to bring back confidence with the fans?

Gallagher:
This is an issue that is going to require a lot of dialogue with track management. A combination of different surveillance schemes, additional investigators on the grounds in the backstretch and designated lasix administration teams might be able to address many of the issues that the 'monitoring' barns now seeks to accomplish. There is no doubt this is a costly exercise for both management and the horsemen, which is ultimately borne by the owners.

The system you are describing is similar in nature to the United States Equestrian Federation, wherein a fee is paid to participate which offsets the costs for an effective drug testing program. In New York, a regulatory fee is paid to the regulatory body from pari-mutuel handle to underwrite the costs for the Equine Drug Testing Program at Cornell University.

We always want to strive to improve testing and enforcement, but don't lose sight of the fact that the equine drug testing program in New York is excellent (on par with the testing done in the Olympics) and that significant funds are designated to backstretch security as well.

We would like to engage track management in a dialogue to address these issues to create a level playing field for all owners and trainers.

Lexington, KY:
Other than the obvious problems with the gate crew, what are some of the issues concerning NYTHA members in working with NYRA?

Gallagher:
There are always going to be issues.  The key is being able to communicate and discuss matters that are of mutual interest in what has to be partnership.  Effective communication can alleviate problems and create a solution oriented approach.  Rick Violette and the entire NYTHA Board are desirous to see this happen, as we want to work with management to advance our mutual interests.

Saratoga Springs, NY:
In recent years, there have been suspensions of several high-profile trainers that effectively became a farce when the trainers' horses were simply transferred to the name of an assistant and business went on as usual. What is your view of the rule recently adopted in some jurisdictions that would prevent a suspended trainer from being able to transfer his horses to an assistant or family member?

Gallagher:
The Racing Medication and Testing Consortium have done much work in this area, dealing with the major stakeholders in the industry.  Much of their work relies on making a distinction between mitigating and aggravating circumstances relating to a post race positive. 

There was a very good article by Drs. Rick Arthur and Scott Stanley on the medication issue recently in The Blood-Horse, try to read it.  Most post race positives revolve around 8 therapeutic medications, which reflects about 75% of the positive calls made in the United States.  It is important that no one party be judge and jury in this domain.  In all instances, a thorough investigation is required and if the circumstances warrant a significant sanction against the trainer then having the horses transferred to an unaligned party would appear prudent.

Lexington, KY:
How would you rate your tenure as Executive Director of the Kentucky Horse Racing Authority, and what other programs would you like to see implemented?

Gallagher:
My tenure in Kentucky as the Executive Director was a top-shelf experience.  Horse racing is the fabric of the Commonwealth and it is the Horse Racing Capital of the World.  I had much respect for the Authority members, the staff of the KHRA, the racetrack operators and wonderful people that I interacted with – owners, trainers, veterinarians, riders, even opposing attorneys.

As a regulator, I would have liked to have more veterinarians and investigators to make us a more proactive regulatory force.  These issues are going to be addressed if the financing can be arranged by the Legislature.

Lexington, KY:
Were you surprised when the Kentucky HBPA fought the KHRA's efforts to install stricter drug laws? What still needs to be done on this issue?

Gallagher:
As a former regulator, you are never surprised with what can happen in horse racing.  I now have the luxury of hindsight, which is always 20/20.  In retrospect, the old medication rule was flawed from an administrative standpoint and had to be changed, but we (the KHRA) should have engaged all affected parties within our dialogue.   It may still have been contentious issue but everyone would have been more directly involved in the process.

Fitchburg, MA:
Do you think it would be in the best interests of racing in NY if the Governor decides to tie-in OTB's to whoever gets the green light to run New York Racing in the future?

Gallagher:
The short answer is yes and hopefully those discussions can occur in the future.

Alpine, NJ:
Can you speak to the fiscal health and stability, or lack thereof, of the NYTHA? The amount of money spent in legal bills seems excessively high. For the amount of money spent, a full-time attorney, in-house counsel type of position, could be positioned. Being a member of the NYTHA, and paying the NYTHA fees each and every time my horses race, I would think the Board and management would feel a responsibility and obligation to be accountable to the membership at large. Thank you very much.

Gallagher:
I think it is important to note that this is specialized form of law that requires unique legal expertise.  We (NYTHA) were looking to protect your and other owners’ financial interests relative to prospective purse money, also known as “the cushion” in the bankruptcy proceeding, the amount of which exceeded $28 Million.  To have used in-house counsel would have been foolhardy and the NYTHA Board would not have been fulfilling its fiduciary responsibility to its membership.

Albany, NY:
Does the New York Thoroughbred Horsemen's Association have a website?

Gallagher:
Yes and no.  We are in the process of developing the website.  I started working for NYTHA in late June and this has become a primary goal to get accomplished.  With this forum we can keep members informed about Board meetings, circulate important and topical information to them, like an electronic newsletter, which previously was only available in hard copy.  This needs to become an effective tool for our membership.

Dayton, OH:
What is the relationship between the New York Thoroughbred Horsemen's Association and NYRA?

Gallagher:
Since I began my tenure, I would characterize our relationship as mutually respectful, open and cordial and we hope to build upon that.

Paris, KY:
What is your reaction to plans that call for the closing of Aqueduct?

Gallagher:
I believe that is a moot point at this juncture.  Based upon discussions that have taken place with the Governor and the Legislature that doesn’t appear to be an imminent development.

Buffalo, NY:
What are thoughts about Polytrack or any of the other artificial surfaces? Are they in the future of New York racing?

Gallagher:
We are still evolving in our knowledge and understanding of these surfaces.  Only time will tell.

San Diego, CA:
How much influence, if any, does the New York THA have over the awarding of the New York franchise?

Gallagher:
NYTHA represents 5,000 owners and trainers participating on the New York racing circuit at Aqueduct, Belmont and Saratoga.  We want to be part of the process and be able to provide counsel to the Governor, the Majority Leader and the Assembly Speaker on issues that are germane to the horsemen and horse racing in the Empire State. Those discussions are taking place and we have been assured that we will have a seat at the table as those deliberations continue to transpire.

Saratoga Springs, NY:
As an owner in New York State, I want more input into this franchise debacle. I've been saying this all along, that owners, breeders, trainers, etc., in the State should be the ultimate reference for this process. And yet Governor Steamroller feels that it's his RIGHT to control a sport about which he neither knows nor cares. How, at this late date, can NYTHA members, breeders and trainers in the State wrest this beast to the ground? Thank you.

Gallagher:
This has been a long and difficult process for all concerned.  The Governor and the Legislature will take into serious consideration the concerns of horsemen racing in New York.  We need to make those concerns known in a constructive way to move the process forward for the benefit of all owners and trainers.  We have been assured that we will be part of the process.

Mt. Sterling, KY:
Congratulations on your new position. I read where you have been a consultant on the racing and medication testing consortium. Do you think if the tracks put harder fines and suspensions that trainers may think twice about using illegal drugs? What do think of snake venom and are certain types of snakes more poisonous?

Gallagher:
Most regulatory enforcement functions fall to the racing commission.  If a track feels that its business is adversely affected by the mere presence of someone on its grounds, they can exclude them.  In most instances this is a private property issue and can be enforced as long as the track doesn’t infringe on the individual’s constitutional rights.  Tracks have significant powers.  They can refuse to issue stall space or to accept entries. 

I think it is very hard for the wagering public to understand or condone the use of snake venom, period. 

Columbia, MD:
Good morning Jim, I would everyone to know that you are the kindest person that we have ever met and you have forever changed our lives. Thank you again for all of your generosity and all that you have done for us. Our question is if you believe (or is it possible) that there will ever be one ruling entity for horse racing so that there would be more consistency from State to State? Lynn and Michael.

Gallagher:
Lynn and Michael thank you for your kind words.  Given the patchwork regulatory structure that oversees racing it is hard to envision one entity that could rule racing.  There needs to be greater cooperation and collaboration between industry stakeholder groups to provide guidance for more consistent regulation.  The RMTC is a good example of what can occur if everyone helped row the boat in the same direction. 

Philadelphia PA:
How will the addition of Hal Handel help impact NYRA's future racing operations?

Gallagher:
Hal certainly has a wealth of experience coming into this new position.  He is a savvy racetrack executive who has dealt with advanced deposit wagering, off-track betting and the integration of a gaming operation at a racetrack.  Those are all topical issues right now.

Lexington, KY:
Jim, will you ever make it back to Kentucky to pick up your jar of Kentucky moonshine or should we go ahead and open it?

Gallagher:
I would have loved bringing that jar back to New York but with my luck I would have a lot of explaining to do to Homeland Security when I landed at LaGuardia Airport.

Lexington, KY:
Jim, you were not very popular with the horsemen when trying to implement the much needed equine medication changes in Kentucky, what was the most difficult obstacle you faced in dealing with the horsemen?

Gallagher:
Building trust.  It isn’t dissimilar from any other endeavor you start out with.  Horsemen just want to know that they will be treated fairly through the process.  Once everyone knows that they will be treated equitably and with respect, things sort themselves out.  

Your word is your bond.  If you look people straight in the eye and tell them the truth, everything works its way through.

Lexington, KY:
Mr. Gallagher your leadership with the Kentucky Horse Racing Authority was second to none compared to previous directors. KY needed a fair and honest person with integrity and the background of knowing all aspects of the racing industry and that is what we had with you at the helm. What is it going to take to keep Kentucky moving forward to maintain the title of horse capital of the world in racing and what was your reason for leaving Kentucky?

Gallagher:
I appreciate your kind words.  I had a great team behind me during my tenure, which helped immeasurably.

The lion’s share of the racing dates in Kentucky take place at Turfway Park.  I read commentary recently that the projected purse structure will be around $170K per day whereas newly founded Presque Isle Downs in PA with gaming revenues will offer $500K per day.

Horsemen will race where the biggest pots are offered.  I know the gaming issue is a divisive one; however, a new revenue stream is necessary to sustain the racing product and enhance the breeding industry so Kentucky can maintain its status of the Horse Racing and Breeding Capital of the World. 

My reason for leaving Kentucky was solely to spend more time with my family and my elderly parents. 

Louisville, KY:
Jim, New York horsemen have made a very wise decision in giving you the reins to their organization. I wonder if they realize your potential in getting things done especially since you are a man of your word and do the things that you say you will do. when will you get on the ballot for our next Presidential candidate?

Gallagher:
Thank you.  For the time being, I will be attending to the horsemen’s business.

Lexington, KY:
How difficult of a task lies ahead of you in going from the regulatory side of racing to the regulated?

Gallagher:
The transition has been seamless.  I have familiarity and experience in dealing with regulatory agencies, track management, horsemen’s organizations and the Jockeys Guild.  Those relationships should be an asset as I advocate for the horsemen.

Lexington, KY:
Mr. Gallagher, what is your philosophy in life and what legacy would you like to leave?

Gallagher:
I have a saying on my desk – Think things through then follow through.

Lexington, KY:
Jim, you've made many beneficial changes to the racing industry in Kentucky, what advice can you give Churchill Downs in promoting the "King of Sports" and the equine and human athletes that are so much more exciting than worrying about getting slots?

Gallagher:
Give credit where credit is due.  Churchill Downs has some superb operational people working for them and they put on a superior racing product with the help of great owners, trainers and jockeys.

This may sound way too simple but it is so true.  Put the horse first and remember if you don’t take care of your customers someone else will.   That applies to all race tracks.

Florence, KY:
Jim, as the executive director of the Kentucky Horse Racing Authority you were very visible amongst the horse people that you regulated. I am truly thankful that Kentucky had the opportunity to have had you to lead us in the medication changes that were so desperately needed in Kentucky and that you were able to accomplish such a difficult task. What do you think of the artificial surfaces now being applied at race tracks across the US and are they a saving grace or is it the medication changes that have made a difference?

Gallagher:
Thank you.  It was very encouraging to see a significant reduction in catastrophic injuries to horses at Turfway Park and Keeneland.  Obviously we are still learning as these surfaces are installed at other racing venues.   It is hard to come up with tangible proof that medication changes instituted have played a contributing factor in reducing injuries.

Mason, OH:
How come Patrick Biancone is allowed to continue to train racehorses after such serious allegations? I think the NFL and the NBA handled their respective scandals much more efficient, and in a much speedier timely manner.

Gallagher:
The presumption of innocence until proven guilty.  Action was taken by the NFL and the NBA after those accused entered pleas.

LAST UPDATED: 1:09 P.M. (ET)

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