A FACTUAL ANALYSIS OF THE JUSTIFY SCOPOLAMINE POSTIVE IN THE SANTA ANITA DERBY

The recent New York Times story by Joe Drape pertaining to 2018 Triple Crown winner Justify testing positive for scopolamine in the Santa Anita Derby drew international attention to the incident…and a plethora of almost entirely negative commentary outside horse-racing circles. Most of the media accounts (starting with the New York Times article) were to varying degrees inaccurate and incomplete. A few were rush-to-judgment condemnations.*

Irrespective of sensationalized and often erroneous media accounts, reporters and commentators are just doing their jobs, albeit poorly in some cases, and are not to blame for the bad publicity horse racing is receiving. An objective analysis of the facts points elsewhere.

Facts:

Under California Horse Racing Board rules, there are four levels of drug violations, ranging from A to D, with level A designating the most serious drug offenses. Scopolamine is a level C violation, in the same category as aspirin and Tylenol. The penalty specified for a trainer with a first-offense C violation is a “Minimum fine of $500 to a maximum fine of $1,000 absent mitigating circumstances.”

A CHRB rule states in part: “In reaching a decision on a penalty for a violation of Business and Professions Code section 19581, the Board, the board of stewards, the hearing officer or the administrative law judge shall consider the penalties set forth in subsections…of this Rule and any aggravating and mitigating circumstances. Deviation from these penalties is appropriate where the facts of the particular case warrant such a deviation, for example: there may be mitigating circumstances for which a lesser or no penalty is appropriate, and aggravating factors for which a greater penalty is appropriate.” One of the mitigating factors listed is “The probability of environmental exposure…” (For instance, in 2016, the CHRB issued an alert over straw contaminated with Jimson weed at Del Mar.)

Justify was one of seven horses from five separate barns that tested positive for scopolamine. This strongly suggests contamination as the origin rather than a plot to cheat.

A number of leading equine veterinarians, with impeccable credentials, are on record as stating that scopolamine is not a performance enhancer. To the contrary, it can be poisonous.

The point system to determine which horses qualify for the Kentucky Derby is not a rule or regulation, but rather is simply a selection methodology that Churchill Downs can modify by fiat. Track management can change or abandon the point system and expand or contract the field size if it so desires because Churchill Downs owns the Kentucky Derby.

Analysis

The CHRB should have announced the Justify scopolamine positive immediately after the lab result came back and explained that since seven horses from five barns tested positive, feed contamination was the leading suspect. In other words, that there was a mitigating circumstance. And that a scopolamine positive is not automatically a disqualifying infraction.

Then Churchill Downs and the Kentucky Horse Racing Commission would have been able to articulate a rationale for permitting Justify to run in the Kentucky Derby, perhaps as the 21st entry. Since the CHRB was still investigating at the time and had made no final decision, Churchill Downs and the Kentucky Horse Racing Commission would have been in no legal or ethical position to bar Justify’s owners from entering their colt in the Kentucky Derby before their due process with the CHRB was completed.

Because the CHRB did not publicize the Justify positive in a timely manner, the omission understandably gives the appearance of a cover up and favoritism toward trainer Bob Baffert. Lending credence is that members of the CHRB are prominent California horse-racing insiders who may not be impartial enforcers of rules and regulations, especially when it comes to their friends, acquaintances, and business associates.

The Justify positive for scopolamine would have elicited extensive media coverage no matter when it became public, but leaked information to the New York Times nearly a year and half after the 2018 Santa Anita Derby yields the inescapable look of a coverup at the CHRB. The CHRB’s bungling of the Justify case is indicative of what is likely to happen when regulators are cozy with the people being regulated.

And American horse racing is paying the price.

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* To illustrate, a sports writer, formerly with the Louisville Courier-Journal and presently with a national online publication, concluded that the Times’ revelation is the “beginning of the end of horse racing.” This deduction, apparently rendered with confidence and surety, is contrary to a vast wealth of contemporary evidence from Major League Baseball, cycling, track and field, the NFL, the NBA, and other sports, which remain popular in spite of repeatedly having far worse substance-abuse (and domestic-abuse) issues surface. Gymnastics still draws fan interest notwithstanding ongoing publicity from a despicable scandal, arguably the most egregious in sports history, that makes illicit medication of human and equine athletes look like a minor traffic violation.

Copyright © 2019 Horse Racing Business

THE PARALLEL UNIVERSES OF THE NY TIMES EXPOSE AND KEENELAND: FOLLOW THE MONEY

Follow the money.  That adage does not always prove true in discerning outcomes but it is often a reliable guide of things to come.  For instance, betting sites are usually a more accurate predictor of who is going to win an election than expert forecasts and public opinion polls.  Bettors have “skin in the game” and therefore more closely research and weigh possible results. 

Follow the money is my preferred context for evaluating the possible effects on the American horse racing enterprise of yesterday’s expose by Joe Drape in the New York Times.  In capsule, Triple Crown winner Justify turned up positive for the performance-enhancing drug scopolamine after his win in the Santa Anita Derby.  Tests by two different laboratories came back positive.  Moreover, the California Horse Racing Board and Justify’s trainer Bob Baffert may have covered up the violation.  (The Racing Board attributed the presence of scopolamine to jimson weed, which could have been in straw used for stall bedding, and Mr. Baffert professes his innocence.)

The New York Times story understandably provoked plenty of comments from readers of newspapers and online reports.  PETA, as expected, was quick to condemn. The majority of the feedback was harsh and accusatory as to where the blame lies.  And in some cases, the comments were along the lines of “the world as we know it is coming to an end.”

Meanwhile, down in the Bluegrass of Kentucky, in Lexington, the September sale of yearlings is in full swing.  On the very same day that the New York Times story was published, a filly sold for the highest price ever, $8.2 million.  This followed a colt going for $4.2 million the day before.  In fact, the market is so buoyant that a $1 million sale is hardly worthy of mentioning.

If one follows the money, Mr. Drape’s report does not seem to phase deep-pocketed investors and speculators in Thoroughbred horses.  If the people buying horses at Keeneland are worried about the future of horse racing, their bidding behavior sure doesn’t show it.

So, there is a parallel universe of sorts and time will tell who is correct.  The view here is that while negative publicity is detrimental, the public has become inured by almost daily scandalous news.  In this era of social media, cable TV, talk radio and scandals de jour, a failed drug test of a racehorse will be of little or no interest or concern to the vast majority of people…or to bettors. Then too, polls show that public trust in mainstream media is at an all-time low.

The social psychology phenomenon known as the “spotlight effect” is that we tend to believe that other people are paying more attention to us than they are. Folks in the niche sport of horse racing are no exception.

Mr. Drape’s story would ordinarily have received more attention than it did.  But a bombshell incident involving the National Football League dominated the day and crowded out other news. Media reports and radio/TV shows were consumed with the civil-suit filing against an already high-profile and controversial New England Patriot player.  His former personal trainer said he sexually assaulted her.

Most people with a financial stake in horse racing, or an ardent fan’s interest, want the sport/business to adopt a uniform medication policy with a strict enforcement mechanism.  The folks buying yearlings at Keeneland s seem to be betting on that outcome, or that it does not matter.

Copyright © 2019 Horse Racing Business

On September 18, Horse Racing Business will publish a fact-based analysis of the California Horse Racing Board’s actions after Justify tested positive for scopolamine in the Santa Anita Derby.

DEVELOPMENTS IN LEGAL SPORTS BETTING IN THE UNITED STATES

For the first time ever in May 2019 New Jersey took in more money on sports betting than Nevada (Las Vegas has had sports betting since 1949). In May, New Jersey surpassed Nevada $318.9 million to $318.3 million. By July 2019, the disparity had grown with New Jersey taking in $251 million and Nevada $235 million.

This performance was not unexpected because sports betting became very popular in New Jersey soon after the state legalized it in June 2018 following an enabling U. S. Supreme Court decision. For the first year in operation, New Jersey had $3.2 billion bet legally on sports with 75 percent of the total coming via bets made online.

Eighty-three percent of New Jersey sports bets in June 2019 were online and 17 percent were made at a physical facility, which reflects the fact that more online betting sites are being added in New Jersey. For instance, customers at Buffalo Wild Wings will soon be able to place bets on BetMGM through the restaurant’s app in New Jersey and other states where sports betting is legal.

At this writing in early September 2019, twelve states have up-and-running sports betting operations, and five of these have mobile betting—Iowa, Nevada, New Jersey, Pennsylvania, and West Virginia. Mobile betting is legal in three additional states but it is not yet operational. Four states confine sports betting to a physical location. 

Interestingly, Tennessee permits sports betting but has no casinos; thus sports betting in the “Volunteer state” will be entirely online.

At least six states are considering legislation to legalize sports betting. Sports betting is already legal in states with significant horse-racing enterprises—New York, Pennsylvania, Delaware, New Jersey, Arkansas, Indiana, New Mexico, and Iowa, with California considering legalization. Kentucky is unlikely to be included.

Geographical expansion of legal sports betting is both an opportunity and a threat to horse racing. It is an opportunity to the extent that sports bettors crossover to bet on races, similar to how table-game players and sports bettors crossover. Sports betting is a threat to horse racing if people who support the pari-mutuel product divert cash away from racing and racing does not receive compensatory crossover betting in return.

While sports betting is a low-margin business (about 5% before expenses), it attracts customers to casinos and racinos. Whether horse racing will benefit is a question that will be answered soon.

Copyright © 2019 Horse Racing Business