Archives for November 2020

WILL PETA HAVE BOARDROOM ACCESS TO LOBBY FOR ITS PROPOSALS?

The People for the Ethical Treatment of Animals organization recently announced that it had purchased small amounts of stock in publicly traded racino companies, namely Boyd Gaming, Gaming and Leisure Properties, Penn National Gaming, and VICI Properties.  Penn National Gaming owns the largest number of racetracks of any company in North America.

These firms operate racinos in Louisiana, New Mexico, Ohio, Pennsylvania, Texas, and West Virginia.  Some of their many racetracks are Belterra Park, Evangeline Downs, Mahoning Valley, Mountaineer, Penn National, and Thistledown. 

PETA reportedly intends to offer eleven reform recommendations to the companies in which it now owns stock, such as banning medication for a horse in the two weeks leading up to a race; replacing dirt-track surfaces with synthetic surfaces; and banning whips (a change that lies within the purview of state racing regulatory bodies rather than racetracks.)

Kathy Guillermo, PETA Senior Vice President, said: “Track owners in California and Kentucky are changing their rules and sparing horses a gruesome death, and every track owner in every racing state needs to do the same.  PETA is eager to get inside the boardroom and push racetracks to make simple changes that will make a world of difference for vulnerable horses.”

The purpose here is not to discuss the merits of the eleven PETA proposals.  Rather, the intention is to evaluate the practicality of the stated PETA goal “to get inside the boardroom and push racetracks to make simple changes…”

Publicly traded companies almost always have social and governance initiatives advanced at annual meetings by activist shareholders that their respective boards of directors routinely advise shareholders to vote down, which they almost always do.  So it would be difficult, to say the least, for PETA to get a majority of shareholders to go along with a proposal that a board of directors is against.  Moreover, the eleven recommendations PETA has put forward are largely tactical matters that are decided by management rather than by boards of directors who properly focus on macro strategic and governance decisions.

The view here is that PETA will not have much success getting an audience with the board of directors of the aforementioned casino companies, for two reasons:  PETA does not own enough shares of stock to have much influence and most of their proposals are not sufficiently strategic to warrant the attention of boards of directors of large public corporations, especially in companies wherein horse racing is subordinate in importance to casino operations.

On a personal note, although I own a sizeable amount of stock in a well-known casino and racetrack corporation, it is doubtful that I could get the chief executive officer on the phone, much less influence a board of directors meeting.

Copyright © 2020 Horse Racing Business

A DESERVED SIGH OF RELIEF AT SANTA ANITA PARK

Beginning in December 2018 and continuing throughout 2019, the number of on-track horse fatalities at Santa Anita Park in Arcadia, California soared and understandably produced a public relations nightmare for racing in the United States.  The national media reported on the fatalities, prominent political figures in California became involved, and various animal-protection groups were vehement in their criticism, rightfully so with so many horse casualties.  Horse racing can never be free of on-track horse breakdowns and fatalities, but the incidents at Santa Anita were far beyond the norm and were unacceptable.

The 2020 16-day fall meet at Santa Anita provided a welcome dose of good news:  no on-track fatalities occurred, either during racing or morning workouts.  Over the meet, there were 1,100 starts. 

For the entirety of 2020, Santa Anita was fatality-free in 99.89% of 4,871 starts.  This is equivalent to 1.02 fatalities per 1,000 starts, compared to 3.01 in 2019 and 2.04 in 2018.

In the wake of the rash of fatalities in late 2018 and throughout 2019, Santa Anita made marked changes in medication policies and instituted a voided claim rule.  The latter means that a person who purchases a horse in a claiming race can void the claim if the horse is grade two lame or higher on a grading scale devised by the American Association of Equine Practitioners.  This rule is meant as a deterrent to a trainer running a lame horse in order to foist the animal off to an unsuspecting party.

While a 16-day meet is not enough of a sample to make predictions, Santa Anita ownership and management appear to have made an effective course correction that has dramatically improved horse and rider safety. Del Mar near San Diego also has had reduced fatalities at its 2020 summer/fall meet, with a single horse fatality due to an awkward start rather than a breakdown. The winter and spring meet in late 2020 and early 2021 at Santa Anita will yield more evidence, as weather conditions, especially rain, will emerge as challenges to track conditions.

For now, things are looking up but it is too soon to break out the champagne.

Copyright © 2020 Horse Racing Business