Ray Paulick<br>Editor-in-Chief

Ray Paulick

Free Ride

Owners and breeders who have become increasingly critical of the National Thoroughbred Racing Association point to a funding imbalance that shows racetracks lagging behind in their financial contributions to the organization.

Until this year, member tracks were able to recoup a large portion of their NTRA dues through a co-op advertising program that rewarded them for increasing their marketing expenditures with NTRA-branded material. Owners and breeders, on the other hand, had no such enticement. They have paid their NTRA dues in hopes a league office eventually would have a positive influence on the economic conditions of the industry. Included on that side of the ledger is the Breeders' Cup, the single biggest contributor to the NTRA.

Without question, one of the NTRA's major successes has come in Washington, D.C., where its Legislative Action Campaign and Political Action Committee have dramatically increased the industry's profile. For starters, in conjunction with the American Horse Council, the NTRA has formed the Congressional Horse Caucus, which counts 60 lawmakers from 23 states as members.

Even in the political arena, however, racetracks have shown themselves to be financial slackers. Owners and breeders are footing the bill for these political efforts, while the tracks shamelessly reap the benefits.

Millions of dollars have been raised, either through a $50 contribution from breeders when they register a foal with The Jockey Club, or from buyers and sellers participating in a 0.25% checkoff program at public auctions. A number of sale companies have contributed to this program as well. These funds (considered "soft" money in political parlance) have been used to hire and support a team of lobbyists.

More than $1 million in "hard" money, used to support national candidates, has been raised in the NTRA's Horse PAC. Only one of 15 current members of its board is affiliated with a track, that being Robert Elliston of Turfway Park.

Based on information from the Federal Election Commission, only a handful of the 146 contributors to the Horse PAC in 2005 were racetrack executives. The overwhelming majority of the contributors are owners or breeders.

Among the contributors from racetracks are Carl Pollard, an owner/breeder who is chairman of the board of Churchill Downs, and Richard Duchossois, the former owner of Arlington Park and the largest shareholder in Churchill Downs Inc. Yet neither Churchill president Tom Meeker nor any of his 18 vice presidents contributed to the fund in 2005.

No top officials from Magna Entertainment contributed either, with the exception of Corey Johnsen, president of Lone Star Park.

Churchill and Magna are mentioned here not just because they are the two largest pari-mutuel operators in North America, but because they are working on a joint venture to expand international simulcasting. It was largely through the efforts of the NTRA that a major barrier to the expansion--a 30% federal tax on winnings--was eliminated in 2004.

Churchill and Magna also stand to gain from Internet wagering, legalized through an amendment to the Interstate Horseracing Act in 2000. That issue remains under attack, not just from members of Congress, but from other gambling industries that believe horse racing has an unfair advantage.

To be sure, owners and breeders are benefiting from the NTRA's presence in Washington, and not just from international simulcasting or Internet wagering. One example: the proposed Equine Equity Act will provide nearly $450 million in tax benefits to horse owners over 10 years.

It's important that owners and breeders continue to support these causes. It's equally important for racetrack executives and others to make a similar commitment.