Indiana Standardbred Breed Development Advisory Committee Meeting Notes
Date: July 20, 2007

Please note: These are NOT official minutes of the Breed Development meeting.  They are notes developed by our representative attending the meeting.

The Indiana Standardbred Breed Development Advisory Committee met on Friday, July 20, 2007, at Indiana Downs.  Committee member Michael Christner called the meeting to order at 1:00 p.m.

The first item on the agenda was the election of a chairman for the committee, which had been tabled at the last meeting.  Christner explained he had been elected to the position for 2007 after a series of conversations among the committee members.

Minutes from the June 22, 2007 meeting were approved unanimously by the committee, as written.  The meeting then progressed to the other items included on the agenda.

As part of the committees plan to get input from leaders in other racing programs about issues facing Indiana with the coming of slots, guest speakers were invited to make a presentation and answer questions.  At this meeting, Hugh Mitchell (Ontario) and Kelly Young (New York) were scheduled to speak.  When Mitchell experienced travel difficulties and was unable to attend, Tom Crouch (Kentuckiana Farms, whose main farm is in Lexington, Kentucky) was asked to speak at the meeting.

Crouch was the first to address the group, sharing a little of his background.  He began by stating he got started in the Standardbred industry 40 years ago, when he bought his first horse for $900.  The offspring of Honors Truax was purchased from Glen Riffe and trained by Tubby Trimble, who was later inducted into the Indiana Standardbred Hall of Fame.  This venture was the start of the Crouch Family’s involvement in harness racing.  After two years of racing, their first win came at the Indiana State Fair.  For them, it was like winning the Little Brown Jug.  The horse continued to race at Louisville Downs and was later sold for $5,000.  Kentuckiana Farms was founded in 1975.  Today, they have 400 broodmares, with stallions in 4 states and provinces.  In addition, some of their mares are bred in each state with a Standardbred breeding program.

Noting Indiana now has the chore of putting together a program that will be beneficial to racing in the state, getting people in the stands, and getting people interested in industry, Crouch offered his thoughts.  He said, “We are all thrilled with the coming of slots.  It means we can expand, but it is only a band-aid.  The bottom line is to get people back to the tracks.”

In his conversation about issues to discuss at the meeting, Mitchell told Crouch one of the problems in Canada is the Grassroots series.  These are their second tier horses that cannot compete elsewhere.  As a result, there are often a large number of divisions, with little money wagered on them.  This trend indicates the program is resulting in the production of horses people do not want to gamble on or want to come see race.

Crouch admitted every program has its good and bad points.  Moreover, he cautioned that the state needs to seriously consider what kind of rules are put into place to generate the best horse possible to race in Indiana.  In his opinion, more restrictive races will hinder this by discouraging outside participation.  Crouch believes that, until the quality of stock is improved, we will have people neither in the stands nor betting the races.  He stated, “People know a good horse from a bad one.”

In Pennsylvania, the owners of mares residing in the state for a total of at least 180 days (before and/or after foaling), get the lion’s share of the breeder awards.  Crouch then revealed he is very much against breeder awards.  In his opinion, the money should go to the owners to pay bills and make more purchases.  He feels his reward is an increase in sale revenue.  On the other hand, he noted breeder awards may have some place in the world we live in today.  Crouch said he agrees to a point with some residency requirement for mares.  When making decisions for the future, he urged the committee members not to go overboard.  He stated, “Don’t be a pig about it.  Pigs get fat and hogs get slaughtered.”

When discussing out-of-state participation in the program, Crouch indicated he felt it is okay to have them participate at a different level.  He said Indiana needs to structure a program to bring in the best horses we can to Indiana to breed and race.  Currently, Indiana has a lot of stallions available for breeding.  In addition, there has been consideration of syndicating horses and making shares available for public purchase if the program is structured properly.

As an example of restrictive breeding, Crouch mentioned the New York breeding program.  In order to be eligible to the New York Sire Stakes events, the state has a requirement that mare be inseminated within the borders of the state.  There is no required length of stay, but the mare must physically come to New York.  Crouch shared a few horror stories of instances when his foals have been hurt or gotten sick when being based away from his farm to meet this requirement.  He also expressed grave concern over the problem of compromised herd health when horses are commingled.  After 15 years with no problems, he once had an outbreak of Stangles caused by a horse shipping to be bred.

Crouch noted Ontario is reviewing their program now.  They have good stallions, but the mares are inferior in quality.  Working hard to find a way to improve this, they are considering a program for offspring of mares that reside in Ontario in hopes of bringing better mares to the province.  They may also be implementing a program for Canadian owned.

Ending his presentation, Crouch offered a few last pieces of advice.  He said, “I encourage you to look at bottom line.  Strive to produce the best horse possible and get the best racing on the continent.  Have a program open to the world and let the best and fittest survive.” 

The businessman in Crouch was evident as he offered some words of caution.  He stated the horse business is not a welfare system.  Specifically, he said those with an inferior product should not be rewarded.

“You have a chance here.  Don’t drop the ball,” said Crouch, as he concluded his comments.  The floor was then open for questions and comments.

Committee member Gordon Tabor was the first to make an inquiry.  He asked Crouch to share his thoughts on the way an economic benefit will come back to Indiana from a racing program.

Crouch responded by saying that if Indiana does not sell a $100,000 yearling by 2010, we have done something wrong.  Further, he said if there is not an Indiana Sired horse in big events like the Hambletonian, Little Brown Jug, or Breeders Crown by then, we have also failed.  He believes these advances will stir an interest in building farms and investing in Indiana, which is economic expansion.  As an example, Crouch revealed he currently owns land in Tipton, Indiana.  If the program is structured correctly, he could expand his business and put a horse operation there.

Tabor then asked about the Illinois program.  He noted Illinois has several restriction placed on horses in order to be eligible to their state-bred program.

Crouch noted he had lived in Illinois at one time and his partners owned Nettle Creek Farm.  The state was so restrictive that it was hard to get outside participation.  Over time, Illinois has gone from 10-15 big breeding farms to only two.  These particular farms own their own sales company, which helps their bottom line.  Crouch could remember a time when Illinois pari-mutuel racing was the best in the world.  People with notable stables came to the tracks and people came to the races to see great horses.  As things became more restrictive, the quality decreased.  As things spiraled downward, purses and the quality of horses also decreased.  One track, Sportsman’s Park, even closed.

Jack Holton mentioned the fact Indiana has a lot of small breeders.  He believes the elimination of breeder awards will put them out of business.  Crouch offered an objective response, stating, “If they have good horses they will not be put out of business.  If they don’t produce good horses, they would not earn the awards anyway.”

Holton then asked if Crouch thought there should be a second tier program available.  Crouch’s response indicated he does not support this idea.  He said the two tracks are where the money will be generated, so they are where the money should be available in purses.

Tim Konkle asked Crouch to estimate the increase in mares bred in Indiana in 2008 if there is an open program with good stallions.  Crouch said he would predict 600-800 more mares would be bred in the state.  If restrictions were in place, he said mediocre mares would likely come to the state to stay.  However, top mares needed to advance the offspring would not be moved into the state. 

Holton mentioned the proposal distributed at a recent Indiana Horse Racing Commission (IHRC) meeting suggesting a requirement for mares to be based year-round in Indiana.  Crouch responded by stating the IHRC should focus on integrity issues and reach out to knowledgeable, experienced individuals for advice on the breeding program.  While on the subject of integrity, he seized the opportunity to applaud the IHRC for their recent actions regarding EPO testing, noting it is very important to integrity.

Tabor asked Crouch if he was in favor of requiring foals to reside in the state for a certain period of time.  He responded, “Absolutely not.”

Considering the options for genetic diversity, Jeff Edwards asked Crouch to estimate the number of good trotting and pacing lines currently available in the United States.  He said there were approximately 9 trotting lines, while about 35 pacing lines are available.  Moreover, he stated it is possible to produce a good horse by inbreeding if you know what you are doing.

Mike Bowen noted Indiana is unique in that there are a large number of Amish participating in our breeding program.  He asked Crouch for an estimated figure to expect to pay at a sale (like Harrisburg, PA in the fall) to acquire a broodmare capable of producing the type of horse he was purporting.  Offering his assistance at no charge, Crouch volunteered to work with anyone from the state interested in purchasing this type of mare.  He said it is possible to find a mare with a little age on her, in foal to the wrong sire at the time of purchase, etc. for $15,000 - $20,000.  However, Crouch indicated he would rather see breeders obtain one horse for $40,000, instead of two at $20,000 each.  The costs are decreased when feeding one horse and a better foal should be produced.

The other guest speaker, Kelly Young (New York), was the next to address the group.  Young explained NY employs a 3-tier program:  Sires Stakes, Late Closers, and Fairs.  The program is set up to allow participants to move up and down throughout the racing season.

For NY, attracting good broodmares has not been a huge problem.  The late closer tier has given the foals produced by the smaller farms with limited mare quality a place to race.

When discussing breeder awards, Young noted they were cut from the NY program in 1991.  However, recent trends in the state have led to consideration of re-implementing them.  NY rules state such awards can only be 10-20% of the value of the sire stake program, which is $15-20 million.  This means the breeder awards could not exceed $1-2 million annually.  A proposal under consideration recommends 10%, with a mare residency requirement of 180 days around foaling necessary to receive any funds.  NY’s reason for reviving the breeder awards program is not to get new people into the industry, but to try to reward some of the smaller breeders.  These operations have not been able to compete because of the large stallion fees for the top horses and the quality of other mares.  Hopefully, the award money would make funds available to allow them to upgrade their stock.  The trainers in NY have already gone through this need to upgrade stock.  Now, it falls to the breeders to produce a better product.  The size of this type of program does not have a big impact, but it does help with the financial squeeze.

Currently, NY does not have stake events for older horses.  Their program is based on the idea the breeders are not breeding offspring for those horses.  They are more interested in producing horses for a 2 & 3 year old sire stakes program.  In addition, they are aiming for producing horses capable of competing in grand circuit events.

For NY, one problem has been keeping purses at a high enough level to keep interest.  Maintaining a program to keep people wanting NY horses is a constant struggle.  Some of their overnight purses are good and the late closers are good, but there is a lot of variation in the purses for the sire stakes events.  One problem is that the different tracks generate different handles.  The money generated at the track stays in the purses for sire stakes at those tracks.  As a result, purses can be very different from track to track.  NY has many half-mile tracks, so the luck of the draw compounds this problem.  Moreover, they are working on a way to equalize this issue.

The inequity of purses from track to track compromises the sale price of horses.  However, yearling sale averages have certainly increased since slots, reaching the highest average ever.  Slots have also given a great opportunity to the trainers to show their ability, getting new owners and working with higher quality horses.

New in 2007, NY developed a signature event for 3-year-old state sired horses.  In these events, the stallion owners paid to make offspring of their horses eligible to the event.  The purses are the result of $100,000 from the tracks, the stallion nomination fees, the nomination fees for the offspring, and a supplement from the NY Breeders Fund.  This is not the NYSS, but a way to get bigger bang out of money available.  Young added the events made the minimum amount needed to make a stallion’s offspring eligible was set high enough to discourage stallion owners from beating the system by advertising their stallion’s fee as “Private Treaty”.

When sharing breeding trends in NY, Young said they saw a steep drop-off in breeding when people became scared because the VLT’s were not being installed fast enough.  The fact the purses in the state would not be rising for 2-3 years was hard for some to grasp.  The instate breeding only issue may have had an impact on this as well, but Young feels NY will balk on losing this because it may push some of the smaller farms out of the business.  She concluded her comments by stating she would not recommend instituting the non-interstate breeding rules in Indiana.

When the floor was open for questions, Jessica Barnes (Director of Standardbred Racing – IHRC) took the opportunity to pose a couple of questions.  She asked when the interstate breeding issue first came up.  In addition, she asked if there had been educational opportunities available to help prepare the smaller breeders for the events of the future.

With the help of Crouch, Young estimated the onset of interstate breeding had been in the 1970s, when shipping semen first became possible.  She said NY had not had the educational opportunities mentioned.  In hindsight, Young said she wished they had done that for the breeders.

Crouch stated he felt the NY program would be dead if it had not been for the VLT’s being approved.  Without this change, he said NY would have had to lift the ban on interstate breeding in order to survive.  Crouch said the infusion of sire stakes money from slots is what saved the industry there.

Tabor then asked the guest speakers a direct question.  He stated, “If you were in our shoes and had an opportunity to start a new breeding program with an influx of money and want to produce horses that are Grand Circuit horses capable of competing with any horse from any breeding program, would you have any restrictions?”

Young split her response by highlighting a possible difference in goals.  She said if the only intent is to breed the best animal, zero restrictions should be used.  On the other hand, if the goal is to breed the best animal with also some agricultural impact, limited well thought out restrictions could be used.

Crouch responded by stating the end result should be putting people back in the grandstand.  If this is not a priority, someday the legislature may come along and say this is not a good enough product and shift the revenue elsewhere.  Crouch said he feels the only restrictions should be for the breeder awards.  He believes any other restrictions retard the development of the breed in the state.

Crouch added he is not opposed to aged events in late closers, but feels aged sires stakes are not good races.  He said these events often end up with one guy having a 1/9 favorite and the same people get the money in the events.  Furthermore, he said it never filters back into the economy as intended.  Crouch thinks when a horse finishes the sire stakes at age 3, a niche must be found for the horse.  This may be either conditioned races or the claiming ranks.

Edwards then asked whether the money generated from the slots at the two tracks would be mixed.  Barnes explained the money going into the Breed Development Fund does get pooled and divided to the tracks.  On the other hand, the money generated for overnight events stays with the track for purses.

As this portion of the meeting was ending, Crouch offered some words of caution to the committee.  He warned them not to take a huge amount of money from the sire stakes and use it for breeder awards.  Instead, he recommended getting the money into the pocket of the owners.

Tabor noted Crouch’s advice parallels the idea yearlings are typically purchased for 2 & 3 year old events, not aged races.  Young added some owners sell horses after their 3-year-old year.  This means the owner at 4 and up did not put any money into the sale.

Committee member Don Eash touched briefly on the possibility of breeding out-of-state if the mare is based in Indiana or foals there.  Young said NY uses that concept in Thoroughbreds.  Crouch said there would need to be a set of rules in place because of the potential to play games. He used an example of the Thoroughbred Funny Cide.  His breeder only had the mare in NY for a brief period of time to foal, but did not help the economy of the state in any real way.

After a short break, the meeting progressed to the other items on the agenda.  The next issue to consider was a request from the Indiana Standardbred Association (ISA) for funding to air a commercial promoting the two Indiana yearling sales on Horse Racing Television (HRTV).  The idea was developed by Bret Shultz. 

Crouch suggested advertising on satellite radio as well.  He noted the cost for 30 seconds of airtime during the Hambletonian (Aug. 4) is only $100.  For details about this bargain for advertising, he said to contact Moira Fanning at the Hambletonian Society.  Crouch also suggested modifying the commercial to send a specific message highlighting the coming of slots to the viewers, instead of only listing the sale dates.

Barnes asked if the request was for the total $16,000 listed in the proposal.  Edwards noted this was correct, but it was possible to scale back the amount of airing if the cost was too high.

Tabor then made a motion to support the video, as well as satellite radio advertising for up to $500.  This was with the understanding the commercial would be edited and resubmitted for review, as only the expense was approved.  This motion passed unanimously.

The next item on the agenda was the upcoming Indiana Sires Stake Finals.  Scott Peine, Racing Secretary at Indiana Downs, had submitted a letter to Breed Development about increasing these purses.  Since the recent finals at Hoosier Park had been boosted, he was requesting the same cooperation for the events at Indiana Downs.  In addition, he asked for funding to increase the 2-year-old events.  As part of Peine’s request, he wanted to divert the funding for the prior year’s trot on the turf course to an Indiana Sired Invitational on the same night as the sires stake finals.  His goal was to have a $1 million night of racing at the Shelbyville, Indiana, racetrack.

There was much discussion as to whether the decision would cover both series for the 2-year-old events, and at what level.  Tabor expressed big concern with dipping into the Breed Development reserves with so much uncertainty in the future since there were currently no projections on potential slot revenue available.  In addition, he was unable to establish a clear maximum amount it could cost for the purse boost.

Eash said that if the funds are available, he is in favor of matching whatever Indiana Downs is willing to put into the purses.  The goal would be to get them to $75,000.  This idea was approved by the committee.

Returning to the agenda, the next item was a clarification on the Indiana Sired Bonus Program.  Barnes briefly explained the bonus available.  Currently, a bonus is paid when a horse finishes first or second in a race not restricted to Indiana Sired horses.  The only races not included are $4,000 and $5,000 claiming events.

At Indiana Downs, we are seeing a few events where $5,000 and $6,000 claimers are combined.  This creates a gray area for handling the bonuses.

Peine was asked about the frequency of these events.  He indicated it was not often, maybe once a week.

Christner explained the current dilemma.  He said a $6,000 claimer who beats a lower level of horse is eligible for the bonus as written.  However, a $5,000 claimer who beats the $6,000 claimers gets nothing.

Crouch then posed a question.  “Why are you paying bonuses to claimers?” he asked.

Scott Snyder, Eash, and Barnes explained the bonus was developed to encourage full fields.  It was implemented prior to the current Indiana Sired Preferred criteria on all races at the tracks in Indiana.

Eash made a motion to pay the bonus to this hybrid event, which passed unanimously.

A Guest Speaker Policy was also distributed to those at the meeting.  Barnes explained it is really a matter of housekeeping to comply with state guidelines.  In order for a speaker to be reimbursed or paid, the individual must be approved by a majority vote of the Standardbred Breed Development Advisory Committee at a public meeting.  The invitation must be made by the Director of Standardbred Racing.  Travel arrangements are then made by IHRC personnel in accordance with the State of Indiana guidelines.  When a speaker is scheduled, an information packet is sent, explaining all costs must be paid by the speaker upfront.  Those expenses meeting the state guidelines will be reimbursed.

Tabor asked for a clarification of the purpose of the policy.  He asked if it was to satisfy state guidelines or limit who the committee can ask to make a presentation at a meeting.

After Barnes assured the group it was for satisfying the state guidelines, the policy was approved by the committee.

Since these guidelines require approval of speakers by the committee at a public meeting, Barnes suggested a few names to consider approving for upcoming meetings.  These individuals were Jerry Connors (Pennsylvania), and Judy Wilson (Delaware) – who also recommended Joe McLeod with Winbak Farm.  The committee also approved Jim Reynolds (Illinois) to discuss what does not work.  They also accepted Dean Hoffman to consult for his knowledge of the industry and overall experience.  A motion was made to invite any of these individuals, as well as Hugh Mitchell who could not make this meeting, as long as they are available on the date needed.  It passed unanimously.

Nearing the end of the agenda, the committee established the dates for upcoming meetings.  The next two meetings were scheduled for August 10 and September 7 at Indiana Downs.  Each meeting was set to begin at 1:00 p.m.

When moving on to New Business, Barnes reminded the committee of the modified deadline for submitting the 2008 racing program to the IHRC.  Originally set for October 1, 2007, the delay on slot revenue projections, has resulted in a return to the original date of January 1, 2008.

Barnes also had a draft of a press release asking for feedback and suggestions from the industry on the 2008 program.  The deadline for submitting input by fax or e-mail is September 15, 2007.  The committee approved the press release for publication.
 With no further business to discuss, the meeting was adjourned.  The next meeting will be Friday, August 10, 2007 at Indiana Downs.