NYRA’s Inferno

A recent editorial by Ray Paulick about the mid-seventies shake-up of NYRA, as well as NYRA’s close relationship with the Jockey Club, reminded me of an unsuccessful 1975 suit brought by the HBPA and various owners and trainers against NYRA, the Jockey Club, and 21 individual defendants, including the President and Trustees of NYRA. (Karlinsky v. New York Racing Ass’n, Inc., 517 F.2d 1010 (2^nd Cir. 1975)). In fact, this case served as the background to the story that Paulick details, as many of the players he mentions were defendants in the case.

The Plaintiffs in Karlinsky were not happy with the way that NYRA was running Thoroughbred racing in New York. In their suit, they were able to establish that a higher percentage of horses owned by the Defendants were allocated stalls at New York tracks than those owned or trained by the Plaintiffs. Additionally, they alleged that the “lavish” 24-day racing program at Saratoga each summer was “a treat which the Jockey Club/NYRA Trustees give themselves at the expense of all the other horsemen who race in this state.” The Plaintiffs wanted to change the NYRA racing program, give more stable space to non-NYRA/JC owned horses, and “radically alter the Saratoga summer program.”

The problem with all this was that the Plaintiffs failed to state a claim other than a kind of general discontent. They brought the action under Sections 1 and 2 of the Sherman antitrust act, alleging that the Defendants “combined or conspired to monopolize the Thoroughbred racing business” in New York. But the court did not find that New York tracks constituted a “relevant competitive market” to satisfy the Sherman Act, since the horses that competed in New York also competed elsewhere in the U.S. The court also found that the defendants operated pursuant to a state regulatory scheme, which set the racing dates and purse percentages. Lastly, the court held that there was no restraint of trade that violated Section 1 of the Sherman Act.

I would note a few things about the case. First, the court’s reliance on the fact that a state regulatory scheme justified much of the alleged unlawful behavior is a little troubling, since state regulation is far from perfect and certainly not free from bias. The court could have looked a little closer at the relationship between the New York Racing Commission (which by the time the decision was handed down had been incorporated into the Racing and Wagering Board) and the immense amount of power handed off to NYRA. Second, one of the court’s suggestions for the Plaintiffs was that they incorporate their own non-profit racing association under the New York statute that authorized NYRA. What exactly would this anti-NYRA have done? Would it lobby to have the Racing Commission strip power from NYRA and delegate the operation of New York racetracks to the new association? That idea wasn’t successful even after the eye-opening, jaw-dropping Spitzer Report was released.

Ultimately, the Second Circuit was correct in dismissing the Plaintiffs’ antitrust claims, which were apparently not very well pleaded anyway. But its final statement left only more questions: “[W]hatever dissatisfaction Plaintiffs may have with the conduct of the horse racing business in New York should be directed to fora other than the federal court.” It is difficult to imagine what fora the Plaintiffs could have resorted to, but these same years did see a reorganization of NYRA’s management. As it was, the case likely played some role in the NYRA shake-up Paulick describes, but whether even that internal rearranging was successful is questionable.   

These days, racing in New York continues to operate in a multi-level system that I don’t even fully understand. They’ve got the Senate Racing Committee, the State Racing and Wagering Board, and NYRA. And, rather perplexingly, we now have the new Chairman of the Racing and Wagering Board chastising NYRA for the way it operates New York tracks. Seriously? Isn’t that like chastising your puppy for pulling on the leash when you haven’t trained it how to heel? Or is NYRA not answerable to the Racing and Wagering Board, but only to the Attorney General?

As Jess Jackson and Michael Iavarone volley challenges back and forth, with many of the potential showdown races being at New York tracks, I’d like to point out what I find to be the most troubling of Sabini’s comments. In the same speech in which he criticized owners for retiring their horses from racing too soon, he said that ”[w]e don’t run races so horse owners can watch their horses race.”

Where there used to be a horse race, with wagering attendant upon the sport, there is now wagering, which happens to be on horses. Regulators chase down pirated signals and off-shore account wagering, anxious to regain control of the revenue that they only became entitled to after states OK’d pari-mutuel wagering on the grounds that they had the police power to monitor the potential “evils” of gambling. What a long strange trip the last 100 years have been.

The best advice I can give Mr. Sabini is the wisdom of Justice O’Rear, then Chief Justice of Kentucky’s highest court. In 1909, he wrote that “[r]aces are run mainly for amusement. While purses, cups, and other trophies are awarded the winners, and are no doubt valuable inducements to owners, so far as the public are concerned, it is the exhibition of skill, speed, and intelligent courage that attracts the patrons to the race course.”

I think Halsey Minor, and all those cheering on his efforts to resurrect Hialeah, would agree. It’s too bad we can’t fast-forward to its re-opening. Maybe there, Jackson and Iavarone could put the challenges to rest, give us an exhibition of Curlin and Big Brown’s skill, speed, and intelligent courage, and, I don’t know, just watch their horses race.