Tom Noonan

Update:  After completing this post, the Gaming Commission announced it would hold a meeting to discuss policy issues I had raised in comments to the regulation.  Their meeting is scheduled for Thursday, January 3 at 11:00 a.m. and can be seen on the Commission’s website.

The New York State Gaming Commission has weakened a rule they enacted to protect horses from fatal racing injuries.  The policy was adopted in April, 2012, in response to a rise in the number of catastrophic breakdowns that occurred in late 2011 and early 2012 at Aqueduct Racetrack.

The regulation established the minimum claiming price for which a horse could be entered in a race.  “Claiming races” are one of the most inscrutable parts of racing for the uninitiated.  A claiming race is one in which a horse can be bought for a specified amount before the race is run.  It is the lifeblood of racing, and the purpose of setting a claiming price is to attract horses of comparable ability.

Aqueduct experienced a sudden influx of cash for purses when the revenues from Video Lottery Terminals started coming in.  This resulted in significant increases in purses, including for claiming races.  As an example, a horse valued at $7,500 that had been running in a race with a total purse of $15,000 might now be entered in one where the total purse was $30,000.  (The winner generally gets 60 percent of the purse, second gets 20 percent and so on.)

The Gaming Commission’s predecessor adopted an emergency regulation in April, 2012, requiring that the claiming price be at least 50 percent of the race’s purse for a “purse-to-claim price ratio of 2.0.”  In the example from above, a horse could not be entered in a race with a $30,000 purse unless its claiming price was at least $15,000.

The crisis in fatalities resulted in the appointment of the New York Task Force on Racehorse Health and Safety.  It was a panel of widely-respected racing figures chaired by Dr. Scott Palmer, now the Equine Medical Director for the Gaming Commission.

The Task Force investigated the possible causes of the fatalities and made a number of recommendations. Their Report was universally praised, and has been considered a model of steps to improve the safety of the equine and human athletes participating in the sport.  New York implemented a number of the recommendations and has now seen a reduction in racing fatalities at its tracks.

The “purse-to-claim price ratio” was one of the factors examined. The Task Force concluded that the policy of entering a horse for a claiming price significantly below the purse value was an “imbalance contribut[ing] to perceptions that horses were being entered in claiming races beyond their level of competition and forced to perform to the point of serious injury or death.”

The Task Force did not consider the April, 2012 regulation of a “2.0” ratio adequate protection for the horse, and instead recommended the more stringent standard advocated by the American Association of Equine Practitioners:

“Accordingly, the Task Force believes that the purse to claim price ratio should be no greater than 1.6, in which the value of the horse is approximately equal to the winner’s share of the purse, and that the Rule should be amended accordingly.”

Governor Cuomo agreed with the Task Force’s determination on the 1.6 ratio, explicitly citing it when he issued a statement ordering implementation of the Report’s recommendations in September that year.  Despite the Governor’s order, Dr. Palmer seemed to have a change of heart and wrote a memo three days later in which he decided that the 2.0 ratio was sufficient, citing economic considerations that might put New York at a disadvantage with competing racing jurisdictions. The 2.0 ratio was not changed.

Dr. Palmer is now of the view that even a 2.0 ratio could be higher.  He wrote a memo outlining steps New York has taken to enhance equine (and human) safety.  He convinced the Gaming Commissioners that the 2.0 rule could be relaxed if a track has implemented increased safety measures.  Even though the weakened rule was put out for public comment and has now been approved as a permanent regulation, the Gaming Commission has refused to release the Palmer memo that was a key factor in the Commissioners’ deliberation.

Dr. Palmer acknowledges that there are no magic solutions that will eliminate all risk for thoroughbreds in training or racing. His 2012 memo references “degrees of risk aversion.” This appears to be a central theme in his approach to the regulatory change proposed in 2018.

In his remarks at the Gaming Commission meeting in September at which the proposed rule was approved for public comment, he recognizes that changing the rule will increase the risk for horses. At one point he stated:

“I always thought that if we were going to take away one protective factor, what do we have to take the place? What are we going to put back in that is going to protect these horses?”  (Transcript by Commission.)

What Dr. Palmer stated at this meeting is that a program of “Out of Competition Scrutiny” – not to be confused with Out of Competition Testing – would identify certain horses whose record might indicate an increased risk of injury. It is a worthwhile effort, relying on factors that have been identified as increasing the risk of racing.  The notion of a “profile” to identify at-risk horses has become widely accepted  –  it was one of the topics in the 2012 Report of the Task Force.

The new Regulation requires that a relaxation of the “2.0 ratio” can only happen if a race track requests an exception:

“The commission shall not approve such a request unless [the track] has implemented increased measures to ensure close examination of the competitiveness, soundness and safety of each horse entered in such a race.”  (Emphasis is mine.)

The regulation is clear.  “Each horse” in a race must under scrutiny if an exception to the 2.0 rule is to be made.  But that is not how Dr. Palmer described the change to the Commissioners at their September, 2018 meeting.

This is the colloquy between a Commissioner and Palmer from the Commission’s Transcript:

Commissioner:  “[s]omeone will be taking clinical history of each horse for each claiming horse?’

Dr. Palmer:  “No.…”

Commissioner:  “Is it before each claiming race?”

Dr. Palmer:  “No, it is one time….”

Dr. Palmer is the expert upon whom the Commissioners rely.  He has said he is responsible for monitoring the effect of the revised regulation.  But he has also said that he will not be adhering to the explicit language of the regulation.

This approach by Dr. Palmer appears to be “trading” one program to reduce risk for another that increases risk.  This implies that there is a certain level of risk that is acceptable. While I think most people realize that risk is an element of horse racing that cannot be eliminated completely, I question whether there would be widespread approval of a transactional approach that balances a track’s economic considerations with equine and human safety.

At their September 24 meeting, the Commissioners focused exclusively on the increase in risk and the ability to bring a halt to the new regulation if equine fatalities approached an “unacceptable” level.  While Dr. Palmer said there would be requirements on the tracks seeking an exception to the 2.0 ratio, he did not provide any examples of what those standards might be.

Just as troubling, however, is that this is a change, according to the Commission, being advocated by persons who were not identified, and neither testified before the Commission nor submitted public comments in support of the rule.  In his September 13, 2018 memo to the Commissioners, the Commission’s General Counsel stated that “[v]arious interested parties have requested the Commission to consider adding flexibility to the existing rule….”  Similarly, the Commission’s Executive Director referred to “[v]arious interested parties” having requested a rule change at the September 24 meeting.

There was a time when the “purse-to-claim” ratio was viewed as an important safeguard for protecting horses. The Task Force rejected the notion that a 2.0 ratio was adequate, instead insisting on a 1.6.  Governor Cuomo considered this to be such a significant step that he explicitly ordered adoption of a 1.6 ratio when he released the Task Force’s findings in 2012.

Now, however, “various interested parties” who are not identified have recommended a weakening of that safeguard.  The Commission has refused to release the memo that supposedly supports the change.  The apparent rationale are tradeoffs intended to mitigate the increased risk even though the standards that will be utilized have not been specified.  And it appears the Commission will not even be complying with the revised regulation.

This is a secretive process and not the way an accountable and transparent government operates.  More significantly, however, it is certainly not a way to bring about changes that will affect the safety of racing’s equine and human athletes.