Earlier this year (February 9 and 13), Horse Racing Business ran two posts on the unfavorable state government-imposed environment for racetracks in Texas (click here for reference.)   For example, Texas prohibits wagering via the Internet/telephone and pari-mutuel wagering on historical races.

Given Texas’ well-deserved reputation for fostering business and entrepreneurship, I thought the forgoing bans were uncharacteristic for the Lone Star state.  I changed my mind when I read about Wal-Mart’s current lawsuit against the Texas Alcoholic Beverage Commission.

Texas has a 1995 law that restricts hard alcohol (excludes beer and wine) sales to stand-alone stores owned by private companies holding state-issued liquor licenses.  Further, under a 1977 Texas law, a private company cannot own more than five store permits, with the huge exception that the principal owner can buy additional permits from a “first-degree” blood relative.  In other words, closely related family members can own an unlimited number of permits and stores.

In Texas, public companies (defined as firms with more than 35 stockholders) like Wal-Mart are confined to selling beer and wine.  Texas is the sole state to permit private companies to sell hard alcohol but not public companies.

In addition to Wal-Mart’s lawsuit, the corporation has joined Kroger and a number of other public companies and groups in seeking legislative relief.

The view here is that, while Texas generally offers a “can do” climate for doing business, the state nonetheless has laws and attitudes that are remnants of an insular culture intended to protect small business from the “predatory” Wal-Mart’s of the world.  The same lingering culture explains the legislature’s paternalistic stance towards its citizenry when it comes to such putative temptations as advanced deposit wagering and betting on historical races.

Copyright © 2015 Horse Racing Business


Instead of American Pharoah winning the Kentucky Derby, suppose that he had run out-of-the-money after going off as the favorite.  Then, the following morning, it was revealed that his trainer Bob Baffert and his owner Ahmed Zayat had for several weeks concealed a significant injury to the colt, but they had decided to run him anyway.

Can you hear the allegations that horse racing is not on the up and up, and justifiably so?

In this hypothetical, the betting public would have placed their bets on a horse that would be unable to perform up to the level indicated by his past races.  This kind of subterfuge was seemingly what happened in the May 2nd title fight between Floyd Mayweather and Manny Pacquiao.

Millions of dollars were bet on both fighters, and some wagers were reportedly as large as $1 million.  Yet, after the fight, Pacquiao’s trainer Freddie Roach said that Pacquiao suffered a right-shoulder injury three or four weeks ago when he threw a right hand while sparring.  Fight promoter Bob Arum explained that the injury was identical to the torn rotator cuff incurred by Kobe Bryant of the Los Angeles Lakers, which ended his 2014-2015 season.  According to Arum, he and Roach considered postponing the fight but opted for physical therapy.

Nevada boxing Chairman Francisco Aguilar commented that he did not hear of the injury until less than five hours before the fight when he came to Pacquiao’s locker room and was asked for permission (which was denied) to administer an anti-inflammatory shot consisting of Bupivacaine, Celestone, and Lidocaine.

Most observers would surely agree that bettors were denied highly relevant information bearing on the outcome of the fight.  An insider with such information would have bet on Mayweather and avoided betting on Pacquiao.

The view here is that people who bet on Pacquiao were deprived of pertinent information about his diminished chances.

In the 2010 Breeders’ Cup, bettors are likely to have wagered on a physically compromised entry in Life at Ten in a case that still has not been fully resolved and may never be.

Whether it is the stock market or athletic competition, investors and bettors deserve the same access to information as insiders.  Otherwise, the idea takes hold that the game is rigged…and that is real bad for business.

Copyright © 2015 Horse Racing Business


A Kentucky Derby winner is exalted and memorialized.  But what does the future typically hold for the worst of the laggards in the Run for the Roses, the horses who finish dead last in America’s most venerated race? How often do these dawdlers have racing careers that compensate for such a dismal performance on the first Saturday in May?

The answer, at least for the past ten Kentucky Derby runnings, is frequently.

Here are the nine colts and one gelding who finished last (either 19th or 20th) in the Kentucky Derby from 2005-2014, followed by their career earnings and career race records.

2005 High Limit, $922,500, 12 starts, 5 wins, 1 place, 1 show

2006 Keyed Entry, $322,852, 12 starts, 4 wins, 1 place, 1 show

2007 Cowtown Cat, $562,228, 16 starts, 4 wins, 1 place, 2 shows

2008 Monba, $669,034, 10 starts, 3 wins, 0 places, 2 shows

2009 Flying Private, $346,203, 20 starts, 2 wins, 6 places, 1 show

2010 Backtalk, $405,051, 15 starts, 4 wins, 4 places, 3 shows

2011 Comma To The Top, $1,349,406, 33 starts, 14 wins, 3 places, 2 shows

2012 Daddy Long Legs, $1,348,231, 16 starts, 3 wins, 0 places, 0 shows

2013 Falling Sky, $420,118, 14 starts, 5 wins, 1 place, 2 shows

2014 Vicar’s In Trouble, $1,228,292, 11 starts, 4 wins, 1 place, 4 shows

Kentucky Derby’s “biggest losers” from 2005-2014 have average career earnings of $757,392.  Three of them earned over $1 million and another earned close to a million dollars.  They had 159 combined career starts with 48 wins, 18 places, and 18 shows.  This equates to 52.8 percent in the money and a 30.2 win percentage.

Two of the ten last-place finishers were conditioned by Hall of Fame trainers (Robert Frankel and D. Wayne Lukas), two were conditioned by a certain future Hall of Fame trainer (Todd Pletcher), and one was conditioned by Europe’s leading trainer (Aidan O’Brien).   In summary, half of the last-place finishers in the Kentucky Derby from 2005-2014 were conditioned by four of the best trainers in the modern era in the United States and Europe.

Whichever colt in Kentucky Derby 141 passes under the Churchill Downs finish line in last place won’t receive any accolades and his connections will likely be disappointed if not embarrassed.  Yet recent history suggests that tomorrow offers a fresh start and redemption is ultimately a distinct possibility.

Copyright © 2015 Horse Racing Business