NTRA: 'Punching Bag' or Valued Resource?

As the National Thoroughbred Racing Association prepares for its June 3 board of directors meeting in New York amid a changing landscape, the organization’s biggest challenge could very well be industry perception.

With Churchill Downs Inc. having opted to not renew its 2010 membership, and MI Developments, which now owns former Magna Entertainment Corp. properties, on the fence, questions about solidarity have arisen. Most industry organizations with board seats, however, remain firmly committed, and CDI officials did say the decision would be regularly reviewed.

“The NTRA’s mission is to improve the economics of horse racing,” NTRA president and chief executive officer Alex Waldrop said in a recent interview. “Rightfully, people have some expectation the NTRA will do what its mission says it will do. People are frustrated.

“In some respects people look to the NTRA. Whether that’s fair or not, we can discuss it, but it is understandable. People are looking for leadership. We’ve done many things, but the broader issues are more difficult to address.”

The national economy and its impact on pari-mutuel racing, as well as competitive pressures for gambling dollars, are two of those issues. Waldrop called 2000-09 a “horrendous decade, the worst since the 1930s.”

In the 1930s, states needed money and turned to gambling—horse racing. Now, states are broke and looking to gambling again—casinos, Waldrop said.

“This industry is facing competitive pressure from casino gambling,” Waldrop said. “I don’t think we understand just how tough that competition is. It makes it tough on the industry and the NTRA to get us out of the slump we’re in. It begs a real question: ‘How do we compete?’ It’s a tough environment for racing right now.”

The marriage of horse racing and casino gambling has complicated the issue. Gaming revenue has increased purses, but companies that operate racing and gaming—CDI, MID, Harrah’s Entertainment, and Penn National Gaming Inc.—have conflicting agendas.

The NTRA board on June 3 will have decisions to make, some based on bylaws. CDI and MEC, like other organizations, have dedicated board seats. CDI president Bob Evans is off the board, and it remains to be seen if Dennis Mills, vice chairman and CEO of MID, will join the board.

Just before the May 15 Preakness Stakes (gr. I), Maryland Jockey Club president Tom Chuckas said there had been no discussion about NTRA membership with new owner MID.

The Eastern Region board seat held by Delaware Park chief operating officer Bill Fasy is open because the Delaware racetrack dropped out of the NTRA for at least 2010. Horsemen’s groups such as the Thoroughbred Horsemen’s Association have extended their membership.

“Our support is unwavering whether the tracks stay in or not,” said THA general counsel Alan Foreman, who has been on the board since its inception in 1998.

Remi Bellocq, CEO of the National Horsemen’s Benevolent and Protective Association, which also has a committed seat on the NTRA board, noted in a recent blog post on the group’s web site steps the NTRA took in response to questions from two members of Congress concerning progress the industry had made in the area of equine health and safety.

“The racing industry has, in fact, done quite a bit to reinvent itself in certain ways since the summer of 2008,” Bellocq wrote. “We are much more attuned to improving the safety and welfare of horse and rider and to raising the standards of our tracks and licensees. Ask yourselves whether the same response could have been made or would have been made on our behalf in 2008 or earlier without the NTRA there to make it happen. The answer is no.”

Questions about the NTRA’s mission are nothing new. Early on, the organization focused on national advertising and television coverage; for the past several years, legislative advocacy and equine safety and welfare have been at the forefront.

Earlier in 2010, Waldrop acknowledged a desire to expand work in the areas of TV and promotion, but said the current climate—scrutiny by the federal government and potential legislative changes tied to wagering—calls for a different path.

The horse racing industry has proven it won’t collapse without regular TV coverage and national promotion. Loss of a carve-out for Internet wagering or changes in laws that govern interstate simulcasts, however, could be very damaging.

“I don’t want to criticize anyone who’s sounding the alarm that racing is facing serious competition,” Waldrop said. “But what we’re focusing on now are private solutions to problems. The NTRA Safety and Integrity Alliance is a self-governing approach to racing problems, and the National Racing Compact, if done well, could be a great cooperative between public and private.”

The alliance, which began accrediting racetracks in early 2009, thus far has survived criticism from some quarters that it’s simply window dressing. Officials expect another 15 tracks to be accredited this year, bringing the two-year total to about 30.

The alliance has its supporters, but Waldrop said there have to be more carrots tied to the accreditation process. Industry organizations, he said, can force the issue; federal lawmakers may expect nothing less.

“There have to be other consequences (for not being accredited),” Waldrop said. “This takes time, like in the health care industry. Hopefully in the next 12 to 18 months, there will be significant rights and benefits withheld from non-accredited tracks.”

A reduction in NTRA dues the past four years was by design as the organization hopes to raise more revenue from industry initiatives and cut members a break. Financial hardships—Hoosier Park Racing & Casino, for instance, is in bankruptcy—have kept some pro-NTRA tracks from renewing for this year.

When account wagering was in its infancy, the NTRA saw it as a means to generate revenue, an effort that ultimately failed and led to a mass racetrack defection. Today’s issues aren’t as volatile, though some members, including CDI, expect more from the NTRA in the area of TV exposure for racing.

If anything, this year’s developments prove no matter what the NTRA does or doesn’t do, some members won’t be happy.

“There has been a constant issue with the racetracks’ involvement,” Foreman said. “What irks me about Churchill is that when Breeders’ Cup separated from the NTRA—I don’t think it helped either one—we created a strategic planning group. We’ve been doing what all parties thought was valuable, but Churchill kept threatening to leave.

“Churchill sees its mission as its brand—what’s best for Churchill. If (something) doesn’t bring value to that brand, they’re not interested in paying for it. The NTRA is just another punching bag. It’s time to move on.

“I’m positive about the NTRA. I know how hard they work and what they’re doing. If (members) aren’t interested in the business as a whole, they don’t belong there. I’m not worried about criticism—it’s endemic. I’ve been hearing the same refrain for 30 years.”