Will We See A Horse Racing Commissioner? Don’t Bet on It

Stop me if you’ve heard this one: What horse racing really needs is a commissioner, a czar, an all-powerful person in charge that will have the authority to dictate change and cure all of the sport’s ills.

The thought of one person in charge of establishing uniform rules, doling out punishments for rule breakers and finding ways to grow and market horse racing across North America certainly sounds appealing, especially in a fractious industry with many disparate partners.

Just one problem: it isn’t ever going to happen, say the experts.

Scroll to continue with content

At least, it’s not going to happen for horse racing in the way most people envision a commissioner in the mold of the National Hockey League’s Gary Bettman or the National Football League’s (NFL) Roger Goodell.

Sue Leslie, the long-time president of the Horsemen’s Benevolent and Protective Association of Ontario (HBPA), the former president of the now-defunct Ontario Horse Racing Industry Association (OHRIA) and a board member of OHRIA’s successor, Ontario Racing (OR), has deep experience dealing with government, regulators and governance of the sport. She said horse racing is simply too different from most sports for a commissioner model to ever work.

“On the surface the concept sounds good, right? Have one guy or one woman and put them in charge and have them make all the decisions, but when you start getting down to the technicalities of it, there’s a lot of challenges there,” Leslie said. “I hear people say, ‘Well, it works in hockey and it works in baseball,’ but… the owners basically run those leagues and they choose their czar… Players really are employees. In our case, you have the racetracks fulfilling the venues and you have owners with their individual investment supplying the product.

“You can’t compare (horse racing) to the NHL and basketball and (other sports). Their venues are all identical in size and structure and talent. They’re all pros. They don’t have the stakes, the allowance and the low-priced claimers. There’s an owner for each team, whereas in our case there’s an owner for each horse. They all use the same equipment, we don’t. The league itself is the regulator.

“It’s a very, very different type of business. I don’t know how a czar could instruct individual owners what they should or shouldn’t do with their horses.”

Woodbine Entertainment Group chief executive officer Jim Lawson has experience with a more traditional sports league. Twice, he was the interim commissioner of the Canadian Football League (CFL). He currently is the chairman of the CFL’s board of governors.

He said the challenge horse racing has, that the CFL does not have, is the fact horse racing is a gambling game and, as such, requires government regulation in each province.

“By the very nature of the business the gaming has to be regulated and there have to be rules which are quite different and apart from the rules of racing. These are rules protecting the consumer… an independent regulator setting rules is very important. So, there’s a big distinction from the CFL where the teams work through the league office on the rules on the football field,” Lawson said.

Jean Major, the chief executive officer of the Alcohol and Gaming Commission of Ontario (AGCO) that regulates horse racing in the province, agreed with Lawson that gambling is one of the main problems with establishing an NHL-style commissioner for horse racing.

“Regulation of the sport is within provincial jurisdiction so a ‘Canada-wide’ commissioner model is technically possible but highly unlikely in my opinion,” Major said. “The major league sports organizations like the NHL, NBA and MLB have mandates provided to them by the various owners that make up the league. They primarily manage ‘marketplace’ issues – there is no oversight over gambling on their products — and they are not regulated by government. Horse racing has both marketplace and gambling/integrity issues to govern. Most jurisdictions around the world have a government agency/department overseeing the racing industry because gambling has inherent social/health harms associated with it — i.e. problem gambling — which requires closer regulation to ensure public policy goals of harm minimization are achieved.”

GOVERNMENT IS OUR GAMING COMPETITOR

For a second, put aside the “protecting the gambling consumer” argument that keeps government in the horse racing regulation game. Leslie said it is extremely unlikely that governments would hand over complete control of horse racing to the industry itself for another important reason.

“Why would they? They are our competitor,” Leslie said, using the Ontario example where the Ontario Lottery and Gaming Commission (OLG) not only controls the money flowing to the horse racing industry from the provincial government, the OLG also competes with horse racing for gambling dollars through its lotteries and other gaming operations.

“The whole practicality of it just unfortunately doesn’t work. Now, maybe we could have a stronger regulator, in terms of drug control, but, even then, you get into the government giving us money and they want a say in what racetracks are operating… it’s just very convoluted and I think it’s just naïve (to think we could have a true commissioner).

“I’ve thought, at times, if you took OR and then you had meaningful subcommittees of OR, like a standardbred committee that made the standardbred decisions and a thoroughbred committee (it might be better), but, believe me, I’ve thought this through nine ways to the middle and no matter what way you do it, there’s no perfect way. There’s things to try, but no matter what the idea is, there are challenges to it.”

Leslie said she doesn’t think government should be involved in day-to-day decision-making of the sport, but since the government is giving money to the industry, “there certainly has to be financial accountability while they’re invested in our industry… If the government was financially committed to the NHL and putting a lot of money into it, Bettman wouldn’t be having the last say, right?”

WHAT COULD WORK BETTER IN HORSE RACING

That doesn’t mean the industry shouldn’t have more control of its destiny. That’s precisely the model Lawson said Woodbine would like to see established.

“When it relates to gaming, that is where the regulator must have the heavy hand and the authority,” Lawson said. “Having said that, I mentioned the rules of racing verses the rules of football… This is not to be critical of the regulators across the country, but you know, much like marketing and the other aspects of horse racing, the people best to understand the rules of racing are the people that live it and breathe it every day.

“I think there’s a greater need for self-regulation, in the industry managing itself, because the industry people know how to do it better. We’re a long way away from that and maybe the only way we get there is to be less disparate and less dysfunctional and come together and have consistent rules on the rules of racing and integrity.

“I’ve had my share of issues in the last year with us protecting the integrity. People that are in clear violation rules of racing, or in clear violation of integrity issues, I don’t personally want them on the racetrack because it affects the brand of our racetrack. If in the CFL there’s enough evidence that someone has committed a physical assault on someone off the field and that’s been verified there is enough evidence to suspend the person rather than waiting for the result of a criminal trial, which could be a year later and, meanwhile, is something that affects the brand of the Canadian Football League. I would argue a similar thing if someone is either in violation of a drug violation on or off the racetrack, I think it affects the branded integrity of racing and so I think the industry should be able to, subject to rules and guidelines of course set by the AGCO, be able to step up. The best way for that to happen is for everyone to come together and be consistent on how we do it.”

Count Major among those urging the industry to unite to better dictate its own future.

“It is a repeated and tired refrain in Ontario and pretty much all of North America. And with OR, Ontario has made great strides in this respect,” Major said. “The decision to have a ‘commissioner’ model would not be made by any of the regulators – this would be a government decision from all the provinces and the federal government – and it may very well be the answer to move this industry to the next level. But it stands no chance to ever come to light, in my opinion, unless the industry is united in its pursuit.”

Still, Lawson said he would like the industry to move closer to a commissioner model.

“There’s a lot of merit in (having a commissioner) for me in terms of the industry becoming just a lot more self-regulated and operating on things such as consistent drug policies and integrity issues,” Lawson said. “There’s a lot that falls to the regulator that doesn’t have to. The regulator can set the policy and guidelines at a certain standard, but you know the way even it works today, we work quite cooperatively with the AGCO, but there’s so much that can be done (by the industry itself).”

IS A GOOD MODEL FOR HORSE RACING IN PLACE NOW?

Major said he believes a strong hybrid model, with plenty of industry self-determination inherent in it — is in place now.

“In essence, the industry (through OR) and the OLG have carriage over the direction of the racing business,” Major said. “Therefore, the industry has a significant say in the direction of the business – through the administration of the HIP/OSS program (Horse Improvement Program / Ontario Sires Stakes), race date allocations, purse distributions from revenues from the government (OLG), etc. So in many respects, the industry is enabled to take charge of its marketplace just as a commissioner of major league sports.”

Major said he doesn’t see a structural problem with how the industry in Ontario functions now.

“I do not underestimate the complexity and challenge in making very difficult marketplace decisions, but in my view, we have less of a structural issue in addressing these issues but more of an industry unity issue – but that’s not new, unfortunately. This has been an issue plaguing the industry in Ontario and pretty much everywhere else in North America. Having a ‘benevolent dictator’ or commissioner has been often suggested as a simple answer to a complex matter. It could work but I am not certain the same people who are advocating for such a system would be happy with the outcome. It is always better to have strong industry unity on direction and goals – the recipe for status quo or regression is to continue to be divisive.”

Still, Leslie agreed with Lawson that the industry can — and should — do more.

“I’m not sure we have quite the right governance, yet. I’m not sure you can mix three breeds effectively at the table, because our issues are so different. So, what might work and be applicable to one breed might not work so well on another breed.”

Creating a better model is going to take two things, Leslie said — more money and more product.

“First and foremost, we need more funding. Funding takes the strain off of a lot of things. Everybody is short, racetracks are short, the breeders are really short on the thoroughbred side and the owners are short. The salaries that people get paid on the backside are short. So, we need more money. More money would take a lot of pressure off and that money has to come from product,” Leslie said.

“How do we get product? We have to have a different relationship with OLG. I don’t see the current leadership there. I don’t see a willingness on their part because they are under so much pressure to produce money for the government. Unfortunately for us, at the present time at least, the government controls our destiny. We’ve tried everything, believe me. Sports betting should be a no-brainer, right? But it’s not going to be a no-brainer because OLG are going to want the biggest piece of it and ultimately the government is going to decide how that rolls out. It’s such a no-brainer to use the racetracks (for sports betting), the off-site betting shops, HPI (Horse Player Interactive)… but if they find a way that’s going to be more lucrative to them, you know that’s what they are going to do.”

WEG WANTS TO HELP REGULATE THE HORSE RACING INDUSTRY

Lawson said Woodbine would be a natural choice to take on a larger role of regulating the industry.

“This is not a power play,” Lawson said. “Woodbine is already running the wagering for the entire province and responsible for 12-14 racetracks and everyone in the country is running their wagering now pretty much through our HPI system and we’re managing the tote systems. As a result of that, I think there’s a scope to do that kind of thing (at Woodbine).”

Leslie said she’s not sure that’s a great idea.

“There’s a lot of concern in the industry because Woodbine — rightfully so — is so dominant that maybe there isn’t the balance in the industry that’s needed,” Leslie said. “But I really don’t know how you get around that. Woodbine accounts for the vast majority of the wagering and that’s what we are, we’re a pari-mutuel industry, and I don’t know how you don’t expect that they should have a fair amount of say.”

Yet, even if the powers-that-be agreed to change the model to one more in line with industry self-determination, Leslie said the process of changing the current structure would be arduous.

“We’ve got the Racing Act legislation that gives AGCO the powers they have. I don’t know what it would take to change that and then our main competitor controls the money we get and controls what products we can have,” Leslie said, referencing the OLG. “Then, you’ve got the different breeds and then you have the fact that it’s not like Woodbine owns the track and owns all the horses and the trainers… No, Woodbine owns the track, the owners own the horses, the owners have the employees, so who’s going to be the czar of that?”

Further, even if the industry could install a czar or commissioner, how would they do that?

“Gary Bettman is hired by the owners of the league,” Leslie said. “Who’s going to decide who our czar is?

“On the surface, your first reaction is, ‘Oh God, wouldn’t that be great? One person and they make the decisions,’” Leslie said. “But when you start going down the channels, I just don’t see how it works in our industry.”