Monday, April 30, 2012

Horses, Racing, and Slot Machines

One of the most famous horse races in American history took place near Nashville, Tennessee in 1806.

A local lawyer, judge, gambler and slave plantation owner was trying to get out of debt. Andrew Jackson was profligate with his own wealth but a stern disciplinarian with slaves and horses. After losing heavily on prior champion, he saw the potential in Truxton and bought him to train.Truxton then took on the reigning Tennessee champion Greyhound in 1805. Truxton and Jackson won, "winning Jackson $5000 cash on the spot. Had he lost he might have been jailed for debt and sunk into poverty. His training of the horse had made the difference. Truxton also became a good source of revenue from stud fees. Thus Andrew Jackson became the best known horse trainer, racer and gambler in Tennessee." [Internet Biography of Andrew Jackson]

In 1806 Truxton beat a new comer, Ploughboy, by forfeit when Ploughboy went lame before the race. Debts incurred by the losers led to Jackson assaulting another lawyer, Thomas Swann. In hopes of recouping their losses, Ploughboy was run again against Truxton. This time it was Jackson's over-trained horse that was lame before the race. Jackson, possibly out of pride but probably for the money, ran Truxton anyway. Truxton won the first heat, but now both limped on his hind leg and had a lame front leg. To win the bet Jackson needed to win two of three heats, so Truxton and Ploughboy were forced to race again. Truxton won the second race, and is justly famous for it.

Andrew Jackson soon killed Charles Dickinson in a duel related to the Truxton race. Jackson went on to kill many white men and American Indians, win the Battle of New Orleans, create the Democratic Party, and serve for eight years as President of the United States.

Now it is as if Jackson's ghost is back to haunt us in our increasingly barbaric era. For the most part people who race horses love them. They are prized possessions that are well cared for. I see nothing inherently wrong in horse racing, as the horses themselves seem to like to race.

Yet in the last couple of years something has gone horridly wrong in the horse racing industry, which is supported by fans wagering on the races. Injuries to horses (and jockeys) were already unacceptably high two years ago, but they have grown at an alarming rate recently. At one race track alone, the Aqueduct in New York City, 30 horses have died in less than a year, doubling the number that died in the same period a year earlier. [New York Times, "Big Purses, Sore Horses, and Death," April 30, 2012] Typically the horses are not killed by the racing accident itself, but are put down afterwards.

Race tracks have been under business pressure for years. Thirty years ago they were one of the few legal forms of gambling in many states. As casinos proliferated across the states more and more gamblers abandoned horses for craps tables and slot machines. As a result the money available for purses (the prizes that go to the owners of the horses) declined, as did race track profits.

Most, but not all, states have now legalized attaching casinos to race tracks. There is a tendency for the horse racing to be an event that draws people to the sites, with the real money made from the 24/7 availability of slot machines. There are less horse breeders and trainers than there used to be 30 years ago when there was more money to be won. So to stage races the racetrack/casinos have started using casino profits to increase purses.

As a result winning purses has become more important than pride for many professional horse owners. They are doing the Andrew Jackson: training horses to the maximum, which helps them win races, but is also bad for their health and leads to accidents on the tracks.

No one in the industry wants to see injured horses. But clearly that is the consequence of the system that has evolved.

Free market theorists would probably suggest that the situation will resolve itself. Attracted by larger purses, more those who race horses will breed and train more. Then they won't need to race the older horses that are most prone to injury.

I believe the risk to horses should be minimized, while still allowing racing. The industry should not wait for a free market fix that may exist only in theory.

Whenever a horse has an accident the owner should get a hefty fine. The money should fund an independent organization that monitors the training of race horses and disqualifies owners that do not comply with humane standards. Greedy, cruel owners would then pay most of the bills for the monitoring system.

If the industry cannot regulate itself to insure a reasonable degree of safety and dignity for its horses, then local, state, and yes the dreaded federal government should establish regulations to protect the horses. Or we could just close the industry down.

Disclaimer: In the past I have done some paid consulting work for investors in the racing industry, mainly related to legal Internet betting on races. At this time none of my clients, to my knowledge, is invested in the industry.

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