The Good, Bad and Ugly of 2020 in California

Most, I'm sure, will have seen the television advertisement for an online dating site that's as on-the-nose as a well-placed left hook.

In it, Satan falls in love with the year 2020, played by a hellraiser masquerading as the girl-next-door. As flaming asteroids pelt the earth, Satan and 2020 watch on while lamenting the imminent turn of the calendar. “I just don't want this year to end,” says Satan, wistfully.

Wistful nostalgia is hardly something many will be feeling when they eventually look back over this annus horribilis–yet somehow, it hasn't been all tears and recriminations. Here's a year-end review of the good, bad and ugly of the last 12-months in the California horse racing industry, with a few pointed questions that will roll over into the New Year…

The Bad: Pandemic in numbers

While the old racing game has proven surprisingly resilient to the schedule–shredding machinations of a global pandemic–especially compared to other sports whose calendars were taken to with a chainsaw–the Golden State has hardly walked away unscathed.

Earlier in the year, live racing was suspended at Santa Anita Santa for nearly two months. Del Mar management had to nix a weekend of racing near the start of their summer meet after 15 jockeys tested positive.

Golden Gate Fields, with more than 300 positive cases, is currently sitting idle, handbrake on, while they await the greenlight from local authorities. And when will that be?

The news out of the track continues to be open-ended. Dave Duggan, the facility's general manager, explained via text how they continue to work with the local health department. At the same time, he remained mum on things like a tentative opening date and the current situation regarding positive tests.

Both in the near and long term, however, a more consequential fallout is the economic impact on the industry's daily operations from an unprecedented betting shift towards ADW platforms–a trend that may prove hard-baked into the bettor's psyche, even when the pandemic lifts.

This should make for stark reading for anyone who makes their living from horseracing in the state. Why?

The way the industry operates in California, many vital programs receive a good bulk of their funding through bets made at brick and mortar facilities, and decimated revenues in this sphere are going to have a profound impact on the bottom line of these programs, some of which were anemic as it was.

In an October Q&A with the TDN, Thoroughbred Owners of California (TOC) CEO and president Greg Avioli dug down into the complicated financial weeds of this issue.

Just look at the state's stabling and vanning fund. In that Q&A, Avioli explained how that program–primarily funded from wagering at the OTBs and satellites–is operating with a $3.7-million deficit this year. Other effects are less obvious but just as astringent.

Revenues, for example, from uncashed or unclaimed refunds, tickets and vouchers are used to fund such things as health and welfare benefits to jockeys and to programs benefitting the backstretch community. While those funds aren't limited to bets made at brick and mortar venues, ADW wagers never go uncashed. And we're talking hefty amounts lost as a result.

During the fiscal year 2018-2019, funds from unclaimed tickets used to benefit the backstretch community totalled $836,090, according to the California Horse Racing Board (CHRB).

Then comes the issue of purses–an imperative for trainers who don't make a living from their day-rates.

As I reported a few months back, against a comparable eight-month period in 2018, the number of races this year had declined 30%, and while the overall handle fell only 18.8%, purses dropped more than 26%.

In other words, a boon for the ADW industry hasn't necessarily translated into a windfall for the California horsemen. Which begs the question: How much of Santa Anita's recent record opening day handle funneled back into purses?

The deadline for the latest round of ADW contract renegotiations is the end of the year, when the hub agreements expire.

I've asked the TOC for a primer when the details have been inked. The TOC has also promised a full annual breakdown of handle and purses–much like the organization did for the first eight months of 2020, but this time month-by-month–when the new year rolls around. Watch this space.

The Good: Equine safety

This is an easy equation: California's improving equine safety record, with Del Mar once again heading the safest racetracks in the country. In their case, this marks four years of hard work and proven results–an achievement that can't get noticed enough.

I've written about this topic pretty extensively, trying to parse the whys and wherefores–no easy task by virtue of the multifaceted nature of any equine injury. One common thread has been this, however: Catching brewing problems early enough.

In this regard, Santa Anita's new diagnostic tools–the MRI and PET scan technologies–are a central piece of the puzzle. Since their inception at the track, researchers have unearthed a veritable treasure trove of new information to help explain the epidemiology of fetlock fractures.

But a broader panoramic view is of an evolving culture shift across California's backstretches, with the “one-more-run” mentality being eschewed in favor of a more holistic “one-more-month-off” approach.

Many will say that this should always have been the norm–they're right.

Nonetheless, California's trainers, owners, veterinarians, grooms, hotwalkers, exercise riders and jockeys should be applauded for sticking with it and doing the grunt work of steering this unwieldy boat towards calmer waters–especially when the lure of bigger purses at more permissive states has made jumping ship an altogether tempting proposition.

The Ugly: Arbitrary decision making

At the latest monthly CHRB meeting, a point of contention proved to be the board's decision to grant Los Alamitos a six-month license as opposed to the usual year.

As my colleague at the TDN, Bill Finley, subsequently put it, “The CHRB was being unreasonable when it voted to only give Los Alamitos a six-month license to run in 2021,” arguing that Los Alamitos “deserved better” than the way the matter was handled.

But what this speaks to is a much larger, more pressing and ongoing problem: When it comes to equine safety, by what specific set of standards and metrics are California's license holders being held to so that decisions with professional implications are made with objective rigor rather than a subjective flavor or political bent?

As Mark Twain once said, “Facts are stubborn things, but statistics are pliable.”

On the surface, it looks like Los Alamitos has had a bad year–28 racing or training fatalities, the vast majority of which are Quarter Horses. This looks especially troubling when held up to the smaller fatality numbers at Del Mar and Santa Anita this year. But the devil, they say, is in the details.

For one, Los Alamitos is open to year-round training and racing. At Santa Anita, there have been 16 racing and training fatalities so far this year, but with training suspended during the summer months and a racing calendar in 2020 much smaller than Los Alamitos. How does the basis of comparison look when you factor in the number of horses at a facility, number of racing starts, number of workouts and the sort?

And then, did the board members also take into account how unlike Santa Anita, Golden Gate and Del Mar, Los Alamitos is only just instituting a fetlock arthrodesis program, which ensures that some horses who suffer severe fetlock injuries–those typically requiring euthanasia–undergo a complicated surgery to the ankle?

For context, eight reported Thoroughbreds have undergone fetlock arthrodesis surgery over the past year or so in California. If Los Alamitos had followed suit sooner, would that have skewed any of the numbers game in their favor?

I asked the CHRB for clarification on the basis by which the board made its decision. This is the response I received: “No statistical evaluation was performed.”

Let's then step back and look at the ongoing legal battle between Jerry Hollendorfer and The Stronach Group (TSG), which revolves around TSG's assertion the Hall of Fame trainer's horses were disproportionately at risk during the track's benighted winter-spring meet a couple years ago.

For their part, Hollendorfer's legal team have released a number of counter-figures showing the trainer's broad safety record as statistically normal. But let's wear our analytical hats a moment longer.

One trainer has saddled three of the seven racing fatalities that have occurred at both Santa Anita and Del Mar this year, making this license holder responsible for nearly 43% of catastrophic racing breakdowns between Southern California's two highest profile racing venues.

I'm not raising this statistic as a disciplinary call to arms–rather to bring attention to the necessity of context when looking at these multifaceted issues in isolation.

When digging down into this particular case, for example, all sorts of factors would have to be weighed for it to be analyzed fairly, including the number of starts over a lengthy period of time, number of horses in training, the trainer's regulatory history. You'd also have to ask tough questions about the rigor of the regulatory scrutiny with which this trainer's horses are given prior to running. Blame is nothing if not an egalitarian beast.

TSG's actions against Hollendorfer, of course, took place prior to the adoption of a rule which requires the CHRB to conduct a thorough review of every fatality at a CHRB facility, including a review of the medication records.

But at the end of the day, if matters of professional import are being decided on some kind of proportionality, what exactly are the rules of the game?

Clearly, the state's regulators and track officials need to do a much better job of explicating the lines in the sand, if indeed lines have been drawn. And if some of the newer horse racing board members aren't savvy to the nuances underpinning the issues they're required to vote on, they need to tip their hat to that publicly.

When livelihoods are on the lines–especially in the midst of a global pandemic, the harsh economic ramifications of which have yet to fully play out–it's the least that can be asked.