RESCUE, AFTERCARE, AND HORSE SLAUGHTER: PART III

“If I were to remain silent, I’d be guilty of complicity.”

Albert Einstein
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Three compelling but much different rationales can be proffered for why the Thoroughbred horse racing enterprise must find a way to fund a massive and ongoing program for rescue and aftercare.

First, horse buyers and sellers, auction companies, racetracks and advance-deposit wagering firms, owners and trainers, veterinarians, common carriers, bloodstock agents, feed suppliers, and a host of others who derive income and enjoyment from the business of breeding and racing share a moral imperative to staunch the unrelenting flow of Thoroughbred horses to slaughterhouses.

Second, civilized societies expect all businesses to clean up after themselves, which is why the Environmental Protection Agency and similar governmental entities issue and enforce pollution regulations on manufacturers, miners, agribusinesses, and other for-profit ventures.  From this perspective, saving Thoroughbred horses from slaughter is an obligation that the racing industry owes to society at large.

Third, a marketing rationale for saving Thoroughbreds from bad endings is enlightened self-interest.  It is manifestly good for business to do so.  The reputation of Thoroughbred racing–and therefore its widespread acceptance by society as a decent and respectable sport and business—depends on how it is perceived by the public outside racing circles.

By any measure, it is enlightened self-interest to be able to say factually that “We do more than any other equine breed to provide for our animals, including horses that have no value in breeding or racing.”  In order to be able to make this bold claim, the never-ending struggle to greatly curtail the number of registered Thoroughbreds finding their way into the slaughter pipeline must be collectively addressed by breeding and racing interests in a much more structured or formalized way than is presently the case.  Aftercare facilities that do most of the heavy lifting of saving and rehabilitating Thoroughbreds need a dependable and much larger stream of monetary resources to ramp up their efforts.

A well-organized and reliable funding foundation established by the triumvirate of auction companies, pari-mutuel providers, and horse owners would be a huge step forward.  The foundation could be generously built upon and augmented by an assortment of existing and new estimable industry efforts.

The Ontario HBPA Approach

LongRun Thoroughbred Retirement Society in Canada receives one half of one percent of purse money from Woodbine and Fort Erie under a meritorious agreement arranged by the Horsemen’s Benevolent and Protective Association and approved by the Ontario Racing Commission.  Horse racing businesses in the United States have a path-breaking humane funding model to emulate.

A previous article in this series estimated, conservatively, that it would take about $7.8 million annually for aftercare facilities to maintain an additional 2,000 Thoroughbreds, assuming that the normal stay at a facility is for six months prior to outplacement.  (The ultimate “stretch goal” is to find the huge sums necessary to save all Thoroughbreds.)  Over twice this amount–enough to save 4,000 horses–could be raised from three sources without inflicting a monetary burden on anyone.  A self-imposed and tax-deductible half-percent levy in North America on:  (1) bloodstock auction revenue; (2) purses paid to owners (via programs initiated and coordinated by state HBPA affiliates, following the Ontario precedent); and (3) net pari-mutuel revenue (i.e., commission or takeout on betting handle) would produce the funds.

Thus the oft-heard reasoning that the horse racing and breeding industry is too fragmented among provincial interests to craft a unified solution is specious in the case of aftercare funding.  A mere seven pillars of the North American racing and/or auction businesses, with huge market shares, could set the process in motion by adopting a .50% percent funding mechanism as soon as their next quarterly board meetings, if not before:  Churchill Downs, Inc., Del Mar, Fasig-Tipton, Keeneland, NYRA, Penn National Gaming, and Stronach Group.

Based on gross auction revenue in North America in 2015, an aftercare premium of .50% would have yielded nearly $4.7 million.  The sales companies could include a legal condition of sale that the mandatory .50% premium is shared in thirds by the buyer, the seller, and the auction company.  On a horse that sold for $50,000, the three parties would each be assessed about a tax-deductible $84.  The money raised could be distributed by the Thoroughbred Aftercare Alliance (TAA) and similar reputable and transparent organizations.

(Currently, five North American auction companies match contributions by horse buyers and sellers to TAA at the rate of 50 cents per $1,000, with the buyers and sellers having the choice to opt out.  The participating firms are Barretts, CTHS, Fasig-Tipton, Keeneland, and OBS.)

A pact to distribute .50% of purses to aftercare would be initiated by the various state affiliates of the Horsemen’s Benevolent and Protective Association.  The purse contributions would logically be allocated to TAA-approved and audited aftercare organizations in the states in which the purses were earned.

Aftercare contributions of .50% on North American purses in 2015 would have yielded almost $6 million. The charitable donation or business expense would amount to a tax-deductible $500 on a $100,000 purse and $50 on a $10,000 purse.  Over the 43,949 races run in North America in 2015, a $6 million set-aside for aftercare would have equated to $136.52 per race.

Racetracks and advance deposit wagering companies’ net pari-mutuel revenues vary according to the total amount wagered, the takeout rates charged, and what percentage of bets are straight wagers and exotics.  To illustrate, in 2015, net pari-mutuel revenue at Churchill Downs, Inc. came to 10.9% of handle for its racetracks and to 19% of handle for its ADW operation TwinSpires, with a rate of 14.5% on combined handle.  Assuming, again conservatively, that net pari-mutuel revenue is at least 10% of aggregate North American betting handle, a .50% pre-tax charitable allocation to aftercare in 2015 would have come to $5.6 million (the portion wagered on Standardbreds and Quarter Horses would go to aftercare for those breeds).  This is a tiny sum for racetracks and ADW operations to contribute to save the lives of many of the horses that put on the show, especially considering that close to $11.3 billion was wagered last year on horse racing in North America.

Funds from auction firms, horse owners, and pari-mutuel services, potentially over $16 million, would lay a rock-solid cornerstone for aftercare.  Additional sources of ongoing financial support would then greatly expand the number of horses that could be saved.  In 2013, for instance, The Jockey Club increased fees by $25 for nearly all registry-related transactions, including foal registration, and earmarked the money for the TAA, with funds raised from Canadian customers of The Jockey Club remitted to Canadian aftercare operations.  The Jockey Club also has a voluntary aftercare checkoff for owners and breeders that began on January 1, 2009; through 2015, about $256,000 has been donated.  In 2015, nearly 30% of the total funds contributed to the TAA were made by The Jockey Club.

Similarly, 22 farms and syndicates standing stallions designate for the TAA a dollar amount equal to one-fourth of a single stud fee for at least one of their stallions.  The donors are located in California, Florida, Kentucky, and New York.

The TAA should consider extending a certificate of appreciation or recognition to businesses that voluntarily give at least a half of a percent of their annual income to aftercare.  Equine veterinary clinics, racing partnerships, trainers, common carriers, feed suppliers, and sundry others would deservedly be able to publicly demonstrate their concern and gratitude for the horses that make their businesses possible.

Enlightened Self-Interest

The sport/industry of horse racing is an easy target for detractors because it is the equine activity most in the public eye.  No other horse competition, not even in the Olympics, comes remotely close to attracting the media attention and number of spectators that racing does during the Triple Crown season and to a lesser extent for the Breeders’ Cup.  This spotlight makes racing vulnerable to two sweeping claims that have a ring of truth and cannot be effectively answered with rhetoric.  Horse racing tolerates overmedicated racehorses and looks the other way as numerous owners willfully or unwittingly condemn their animals to slaughter.

Just as there is no permanent solution to the everlasting problem of an oversupply of dogs and cats, there can be no assured remedy for saving all unwanted Thoroughbred horses from slaughter.  Nonetheless, the Thoroughbred racing and breeding industry has a golden opportunity to establish the most effective equine-welfare initiative ever launched.  With the leadership of auction companies, racetracks and advance-deposit wagering firms, horse owners, and a host of other munificent industry participants, many more premature horse deaths can be averted, and this principled outcome can be achieved with very little monetary sacrifice from any one source.

The troublesome question of what should be done to significantly curb the dispatch of full-blooded Thoroughbred horses in slaughterhouses does not need the customary “further study, review, and consideration” or more industry conferences.  All it requires are resolve and swift action on the part of the institutions and individuals who have a compelling vested interest in seeing that horse racing has a worthwhile future.  It is within the unilateral power of people and organizations, in all facets of the racing industry, to establish sustainable funding mechanisms, and to do so within months rather than years, so that aftercare facilities do not have to operate hand to mouth and can expand their operations to accept more registered Thoroughbreds for outplacement to new homes.

Wayne Pacelle, president of the Humane Society of the United States, explains in his book, Humane Economy, how he received an unsolicited call in 2011 from Carl Icahn, the prominent Wall Street investor and onetime owner of elite racehorses, volunteering to help with battling against animal cruelty.  Icahn made good on his offer by pressuring McDonald’s to insist that its suppliers of pork bellies abandon the practice of confining pigs in crates, and over sixty food brands ultimately followed McDonald’s lead.  This is just one shining example of what the Wall Street Journal recently depicted as the “unprecedented” progress that has been made in the past decade in “the effort to protect and ameliorate the lives of animals,” encompassing the phase-out of circus elephants to the cessation of orca breeding at SeaWorld.

The unparalleled progress the Journal refers to is the result of heightened societal expectations and stricter demands about how animals must be treated.  A well-funded and ongoing enterprise-wide rescue and aftercare program to spare thousands of Thoroughbred horses from slaughter in the years ahead would be a powerful deeds-over-words statement that the people and organizations in horse racing are passionate participants and leaders in the reform movement.

Carpe Diem.

Copyright © 2016 Horse Racing Business

Three brief notes on aftercare and horse slaughter subjects will appear as follows:

September 22, “Horse-Owner Responsibility”

September 29, “The Euthanasia Alternative:

October 6:  “The Over-Breeding Canard”

I welcome anyone to critique the content in my articles.  Send me an email.  Tell me where I am correct or in error.  The way to solve monumental problems is to bring to bear diverse viewpoints, as no one is always right or has all the answers.