Deregulation Doesn’t Solve Florida Mess

A year ago the Florida legislature passed a bill that represented one of the boldest approaches ever devised for the regulation of the thoroughbred racing industry.

The state took itself out of the business of assigning racing dates for tracks -- a process that had regularly generated controversy and nastiness in Florida and many other states. (Remember Marvin Mandel?) Instead, the legislature permitted racetracks to operate whenever they chose. The idea behind this deregulation was to force the tracks to negotiate and work out a racing schedule among themselves.

It sounded sensible enough; this was the American free-enterprise system at work. But deregulation has suddenly turned into a disaster, and has put Florida’s racing industry on the brink of chaos.

Managements of the three tracks in the Miami area -- Gulfstream, Hialeah and Calder -- had been accustomed to battling each other over possession of the best racing dates. When they issued their tentative schedules, all of them said they wanted to run during the prime January-to-March period that is the height of the tourist season. This was all preliminary skirmishing, however. The deregulation bill said that the tracks had to operate the dates that they submitted as of 5 p.m. on March 31, and it was assumed that they would get down to serious negotiating as that deadline approached.

The chairman of the state’s parimutuel commission, Joseph Priede-Rodriguez, tried to intervene and proposed a schedule that made sense to plenty of outsiders. It gave Gulfstream the best dates (which, as the most successful track, it has earned) and gave Hialeah a split schedule sandwiched around Gulfstream’s dates. But Calder’s management didn’t respond to the idea. So everybody with an interest in Florida racing waited anxiously to see what Gulfstream’s Doug Donn, Hialeah’s John Brunetti and Calders’ Kenny Noe would decide in their down-to-the-wire meeting on March 31.

Donn had been willing to settle for 54 prime dates for Gulfstream -- a fairly conciliatory position considering that he was playing the strongest hand. But both Brunetti and Noe can be hardheaded, unyielding men, and when the deadline arrived, there had been no resolution of the conflict.

The tracks were left with racing schedules that they had set forth largely as positions from which to bargain. Calder would operate from Nov. 19 to Jan. 14. Gulfstream would run from Jan. 16 to May 4. Hialeah’s season would go from Nov. 18 to May 20, overlapping both of the other tracks and creating head-to-head conflicts throughout the entire winter.

The result would be a calamity for everybody. South Florida can’t support two horse tracks; even now Hialeah is drawing pitiful weekday crowds of 6,000 or so. Smaller crowds will mean smaller purses, and smaller purses will discourage good stables from coming to Florida during the winter. Gulfstream will be hurt badly and Hialeah may not survive the warfare.

The failure of the tracks to agree on dates inflicted another potential piece of damage on all of them. The legislature had been considering the passage of off-track betting, which would have been a bonanza in such a large, populous state, but many lawmakers were waiting to see how the tracks handled the dates issue first. “The problem with OTB now,” Rodriguez said by phone Wednesday, “is that if these people can’t get together on three tracks, how are you going to convince Tallahassee that they can pick out 12 (OTB sites) apiece? A lot of the legislators are saying, ‘To hell with them!’ ”

Rodriguez is as stunned as most outsiders are by the intransigence of the parties. “I’m an architect,” he said, “and in many business when people have differences you sit down and discuss them and work out compromises. But that doesn’t occur in the racing industry. The problem is with the personalties involved; there’s no logic, no reasoning.”

Rodriguez feels obliged to save the owners of the Florida tracks from themselves, even though there are plenty of disgusted observers -- including members of the state legislature -- who think the tracks should be allowed to suffer the consequences that they have brought on themselves.