012-allan-balch

THE CURRENT POLITICAL AND SOCIAL
CLIMATE OF HORSE RACING

A discussion with Alan Balch

Connect with Alan Balch

Website
https://www.linkedin.com/in/alan-balch-3298b915 

John Debevoise:Greetings everyone, and welcome to another serving of Bizness Soup Talk Radio. If it’s in business, it’s business soup. I’m your host, John Debevoise. Win, place or show from the California Thoroughbred Trainers Association, my longtime and good friend Allen Balch, its Executive Director, will be joining us here to talk about the professional horsemen who train horses. And we’re going to talk about the state of racing as it is today; the good, the bad and the ugly and what is in the future for the sport of kings.

John Debevoise:Allen, welcome to the program.

Allen Balch:Thank you, John.

John Debevoise:Allen, you and I go way back to the early days of the Del Mar Horse Show. To this day, I still remember those exciting events when I was much younger. And you have continued in the horse arena, and now you are the Executive Director of the California Thoroughbred Trainers. What does that mean?

Allen Balch:Well, back then of course, I was working for Santa Anita as well as managing the horse show at Del Mar, which is a major race track, as I think everybody knows. Over the decades since then, I’ve been in both the racing and the non-racing equestrian sport. And as you say, I’m now Executive Director of California Thoroughbred Trainers, which is a mutual benefit corporation in California that is set up statutorily to represent all the professional horsemen who train horses and anyone who’s licensed as a trainer in California, because to train a horse at the track for racing, you have to be licensed by the California Horse Racing Board. The statute requires that all the trainers be represented by this organization, so they are automatically in the association, including Bob Baffert, of course. He’s the former Director of California Thoroughbred Trainers, and is probably the most prominent of all of our members. But we represent everyone, whether they have a one-horse stable or a hundred-horse stable.

John Debevoise:What benefit does your organization, the California Thoroughbred Trainers … What benefit does that bring to the trainers?

Allen Balch:Under the statute, I would say one of our main things is we have, right now, a defined benefit pension plan. We’re one of the only places in the world where professional horsemen are qualified for a pension plan, which is funded from the total amount bet … before the California Horse Racing Board.

Allen Balch:Just the general rules, we negotiate contracts with the horsemen on everything from stall assignments to the conditions on the backstretch, all that type of thing. We have a heavily regulated election structure, so all of our Directors, we have nine non-horsemen who are elected from throughout the state of California, both northern and southern California, and they have staggered terms, so we always represent all of the trainer’s interests, whether they’re, as I said before, large or small trainers.

John Debevoise:Now in your association, I’m sure you deal with political elements. What are some of the most pressing political aspects, or we could say social and political in the world of horse racing?

Allen Balch:Well, I think one of the biggest things that perpetually is, and it’s more so now than ever before, is the welfare of horses. People are much more in tune now to how horses are treated. One of our biggest responsibilities by law is to deal with the trainer’s interest in track safety. So we’re constantly advising and consulting on the condition of the race track, how it’s maintained, condition of the turf course, how it’s maintained, and always trying to reduce the number of injuries and make sure that racing is as safe as possible for the horses, obviously, as well as the jockeys. And that consumes an awful lot of time, because the art and science of track maintenance has evolved tremendously just in the 50 years or so that I’ve been involved in racing. Racing has always been a world leader in research and maintenance of the racing services, but now moreso than ever, we’ve been through a number of years where we experimented and tried to install so-called engineered or synthetic surfaces, which have not been, unfortunately, too successful. So for the most part, we’ve gone back to so-called natural services; dirt and, of course, grass. But even the grass courses have evolved a great deal, given science and engineering, to make them safer and safer.

John Debevoise:Yes, as a horseman, I would watch the evolution of the changing of the dirt. And they would go to, as you mentioned, the synthetics and trying to improve the conditions only to find that it just didn’t pay out and then they end up going back to the dirt, and the art of keeping it, as I learned it to be, live; keeping the dirt live and turning it over, maintaining it. And that’s one of the challenges. What is the big political challenge that the Thoroughbred Trainers Association is facing now, whether it be on a local or national basis in politics?

Allen Balch:Well, on a national basis, there’s a move to have some kind of oversight of racing. It’s been a constant thought in the minds, particularly of the leaders of the Jockey Club who don’t like the way racing is regulated on a state-by-state basis. But the fact of the matter is that every state that has racing has a regulatory commission, and that’s much closer to the circumstances of the individual state. Clearly, Kentucky is a much different jurisdiction than California, which is different than New York, which is different than Ohio and Texas and so forth. While the Jockey Club and some people within racing are pushing for federal oversight, I would say by far most of the racing constituents believe in the state-by-state regulation. And what we’re trying to do is harmonize the regulatory framework, whether it’s medications or discipline or whatever it is on a state-by-state basis.

Allen Balch:There are some differences state-by-state, but generally speaking, the state-by-state regulation is pretty consistent from state to state. But when it’s not, there’s a big hoo-rah that some technical detail of either discipline or medication is different from this state to that state, and that leaves the Jockey Club to make a big issue out of it.

Allen Balch:But the principle issue behind all of that is that the Jockey Club opposes the use of race day medication. There’s only one race day medication that is generally permitted, and that’s furosemide, Lasix, which is the anti-bleeder medication that prevents or inhibits bleeding in horses, and the Jockey Club, for its own reasons, is absolutely opposed to the use of Lasix. And I would say 95% of horsemen realize that Lasix is a wonderful medication that’s been developed. You may not be old enough, John, to remember, but I can remember when I first got to the races in the late sixties and the early seventies; we used to have bleeders.

John Debevoise:Yes.

Allen Balch:And when a horse has a … It’s called exercise induced pulmonary hemorrhage. When a horse bleeds from super exertion during a race, it is a tragic circumstance, where a horse can even drop dead in an extreme case, or suddenly stop because he’s swallowing so much blood. And that’s very dangerous in and of itself. Over the years, this medication, furosemide, which in humans, I guess, is a blood pressure medication from what I’ve been told, but it’s administered in a very careful dosage to race horses, and it is clearly extremely successful in inhibiting bleeding. And that’s for the welfare of the horse; his welfare, as well as the betting public, which, they don’t want to see a favorite stop when he, all of a sudden starts bleeding through his nostrils.

Allen Balch:So a lot of this is about that particular issue, because furosemide, or the trade name Lasix, is not used in other parts of the world on race day. But there’s an allegation that it’s a performance enhancing drug. If a horse doesn’t bleed, he’s going to perform better.

John Debevoise:You know, I’ve always found that works best for me, too.

Allen Balch:Exactly.

John Debevoise:We’re talking with Allen Balch. Allen Balch and I go back decades. He is the Executive Director of the California Thoroughbred Trainers, and we were just talking about a trademark medication called Lasix, which I’m familiar with. And yes, Allen, I go back to those dates, too, but I was younger, sitting in the grandstands, threatened with my life that if I got up out of my seat, I would die. Now, that was parenting back then. And so I had to sit there in my shorts and bow tie and my short sleeve shirt and the only thing I was allowed to do was breathe. And it was only because they didn’t have the ability to take that away from me legally. So, I remember those days.

John Debevoise:Now, Allen, we’ve seen several closing of racetracks. Most recently and famously was Hollywood Park. And I, too, remember that back in the golden age of thoroughbred racing. What is the state of thoroughbred racing? Those dates I know had to be reassigned that were at Hollywood Park. So what is the state of thoroughbred racing in light of the closures and the impact that the off-track betting has had on the industry?

Allen Balch:Well, going way, way back, racing has been undergoing a consolidation, you would say. It really dates back to the aftermath of World War II. I mean, tracks have gradually disappeared. Narragansett Park back east. I mean, I could go through a whole list. Tanforan in northern California. The tracks have been disappearing, but over the last, say, 10 to 15 years, the consolidation has been accelerated tremendously because of the advent of the internet, advanced deposit wagering over the telephone, the advent of Indian gaming casinos, state lotteries, you name it. The amount of legalized gaming has just expanded exponentially. And clearly, all those things together have put tremendous pressure on racing. And then racing itself has cannibalized the gaming dollar because of simulcasting and bringing the big races back and forth across the country. For example, at Santa Anita, we’re among the leaders in starting simulcasting, taking the Kentucky Derby or the Jockey Club Gold Cup and things like that. And it used to be that each region had its own major races, and then you had to travel someplace to see the Kentucky Derby or to go to New York for the Jockey Club Gold Cup.

Allen Balch:Now, all of these major races, even internationally, of course, Ascot, Hong Kong are simulcast and bet on, and that pressure has just been exceedingly difficult for brick and mortar racetracks to withstand, particularly in Los Angeles, to take your example, when about 300 acres at Hollywood Park in Inglewood, the real estate values are just astounding. They’re so huge. So when the highest best use of property in publicly held companies becomes just too much for the racing, the racing cannot generate that kind of income, whether it’s Bay Meadows up north being developed for housing, or Inglewood, Hollywood Park being developed for a mixed use housing, and then the new Ram Stadium, which if you fly into LAX, you look out the window and see what a fabulous stadium that’s going to be. The real estate values, the racetrack takes a tremendous amount of property for horses and the track and the grand stands and so forth, of course, so that’s what’s led to the consolidation all over the country.

John Debevoise:We’re talking with Allen Balch about the horse racing industry. We go back to the early days of horse showing at the Del Mar forum. I remember City of Hope showing at the forum out there. That was one of my favorites, was to be showing at the forum when you managed that.

Allen Balch:Well, that was a great show. Of course, the forum has recently, within the last five years or so, been purchased by Madison Square Garden and completely redone. I went to an Eagles concert there a couple of years ago when they reopened it, and that brought back great memories. But they have certainly refurbished the forum back to its original glory and then some. Unfortunately, it’s not going to be used for any horse shows, I don’t think.

John Debevoise:Well, I still have … One of my favorite pictures is Neil diamond giving me an award.

Allen Balch:Everybody from Neil Diamond to Mae West presenting trophies.

John Debevoise:You always put on a great show.

Allen Balch:It was a big deal in Los Angeles, as you well remember.

John Debevoise:Oh, yeah. And I loved it. Allen Balch is joining us here, as he travels from one meeting to another. And we’re talking about his position as the Executive Director of the California Thoroughbred Trainers, and we’ve been reflecting on some of our past, going back to the days of the forum and the City of Hope Horse Show. As I was mentioning, the forum was one of my two favorite … Well, one of my many favorites. Del Mar, of course, that you managed, as well as the forum. And of course, winning always makes any show fun. I had the privilege of winning at both of those shows. It was a lot of fun.

John Debevoise:Allen, as to … We were talking about the impact of the consolidation of the horse racing industry and the off-track betting. And yes, I have been to the Indian casinos, I’ve been to Las Vegas. In fact, I was just there for the Freedom Fest event, where I got to rub elbows with my new best friend forever, Steve Forbes. And he’ll be joining us here shortly on Bizness Soup.

John Debevoise:So there has been a big impact, and I recall being at Hollywood Park not long ago, where there was nobody in the grandstands. And that was very sad, because I remember as a kid, it was packed, like Santa Anita and Del Mar during the racing season there. Hollywood Park just faded from existence, and now is going to be this great stadium for the Rams. And I’ve been reading and watching how, up in Prescott area, they’re reopening the defunct racetrack up there. Do you see an expansion of the horse racing and the industry with our new economy, burgeoning economy? What do you see in the next three to five years in the horse racing industry?

Allen Balch:Well, it’s very difficult to see it expanding, as far as new. The track in Arizona is a former track that they’re going to retread. The Prescott track, of course, is going to try to capitalize on all kinds of technological age. But really, it’s not going to be able to be a major presence. The problem is the real estate, as I mentioned before, is just too valuable. So what you’re going to see is, I think, an enhancement of existing tracks, where they’re going to try to capitalize on sports betting and other types of things to get people to the track. Del Mar is still a major presence. Saratoga in New York, Keeneland. The few major tracks that have not expanded their racing beyond all means, the racing dates and so forth, they’re going to be fine. But the other ones are … It’s going to be very difficult to see how they’re going to survive because of simulcasting and all these other things. Really, you could make a case that there’s really a demand for one major track in each time zone, so to speak.

John Debevoise:Is it a better use of a facility such as the Del Mar racetrack or Santa Anita or Keeneland or these to have in that time zone where they are essentially running throughout the year, as opposed to a season that we’ve seen in the past? I remember it was the Agua Caliente circuit, and then they’d go to Del Mar or Santa Anita and Hollywood Park. And it was … I called it a traveling circus back then. Are you seeing that there’s going to be a region where the racing seasons are going to extend longer by a geographical and/or time zone?

Allen Balch:Yeah, I think that’s definitely what’s happening. The trouble is that it’s all a reliance now on gross handle away from the track, not so much on track. And Gulf Stream Park in Florida races almost year round, now. Santa Anita races about eight months out of the year, which is just too much racing for the live crowds, but we handle a tremendous amount of money overall because they’re betting on Santa Anita nationally, internationally. And the Stronach group, which owns these major tracks, is providing a signal from very early in the morning, Eastern Time, to the end of the day in California. So it’s just big, big time gaming with big, big money. Enormous money from what amounts to sort of a studio track that is sending its racing out to the whole world.

John Debevoise:We’ve been talking with Allen Balch, long time friend of mine and the Executive Director of the California Thoroughbred Trainers. He’s also the President of the United States, or US Equestrian Trust. And Allen, we’ve run out of time on this segment. I’d love to have you come back and talk about the future of thoroughbred racing as well as your position with the Equestrian Trust.

Allen Balch:Thank you, John. Talk to you again soon.

John Debevoise:This has been another serving of Bizness Soup, where business comes for business. I’m John Debevoise, inviting you to visit the website for more servings of what is best in business.