The forthcoming week will offer significant dialogue on topics that have been recently highlighted by the Thoroughbred Idea Foundation. Following the publication of TIF’s first white paper – “Penny Breakage” – the Model Rules Committee of the Association of Racing Commissioners International (ARCI) placed the topic on its agenda for discussion at its session in Tucson, Arizona on Sunday, December 2. The TIF’s paper was submitted as part of the meeting materials for commissioners and attendees to consider.

ARCI Executive Director Ed Martin noted the main function of the organization, and the impact of the Model Rules, in recent testimony before Congress.

“Every state that has authorized pari-mutuel wagering on horse racing is a member of the ARCI and, as such, relies upon the ARCI Model [Rules] of Racing as the template for their individual state rulebook. These rules form the foundation for the regulatory scheme in every state and there is substantial, albeit not total, uniformity between the states.”

TIF hopes this initial discussion on the topic of breakage could lead to further study of the matter by the Model Rules Committee's designated subcommittee and lead, potentially in 2019, to inclusion of a penny breakage provision in the model rules for adoption by the states.
“Since the publication of ‘Penny Breakage,’ we have engaged various stakeholders to discuss the topic, with particular attention to horsemen’s groups,” said TIF Executive Director Patrick Cummings.

“Through contributions to purse funds and other entities, breakage retained through traditional brick-and-mortar play has often been a supplement to horsemen. However, the groups we’ve spoken to have been quite receptive to the notion that those funds are declining in an environment where more play is shifting to ADWs, which retain breakage generated through ADW play.” 

“There was a time when breakage made sense, helping on-track churn by paying customers faster,” said Cummings, “but that time has long since passed. Since the industry modernized with ADW and self-service machine play, the very purpose of retaining breakage was rendered moot, but has continued unabated. It is time to return this money to horseplayers - a stimulus package which will re-ignite the traditional takeout cycle on that churn and yield more significant returns for the industry as a whole. More money in the hands of horseplayers sustains racing more than the status quo.”

The topic is also on the agenda for the University of Arizona’s Global Symposium on Racing when Cummings speaks in a session on Wednesday, December 5. Titled “The Value of Supporting Racing’s Core Product and Players,” the Symposium’s agenda outlines the discussion:

“From giving back what many believe is due the player by changing the rules on the distribution of breakage to enhancing the customer experience at the track to finding an avenue by which the fan can become a vested partner in the racing industry, panelists explore a number of ways to focus on improving our core product and better serving our customers.” 

Cummings will also speak on a Wednesday panel regarding the adjudication of racing. The TIF, following publication of its second paper “Changing The Rules,” supports North America to shift from the Category 2 rules philosophy to Category 1, which would yield a dramatic reduction in the number of inquiries and demotions. 


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