imjingjing

With the Kentucky Derby coming up and with the overpaid and largely un repentant thieves from Goldman Sachs in the Congressional hot seat, it seems an appropriate time to renew a question that I initially raised some 15 years ago, in an article in that well-known handicapping publication, The Tax Lawyer . Namely, why does the Internal Revenue Code treat the ordinary schlub’s horse racing and casino gambling winnings and losses so much less favorably than it does the much more dubious gains and losses that those Wall Street’s masters of the universe receive from trading in billion dollar derivative bets? [For those who want to explore the legal arguments, the full text is at 49 Tax Lawyer 1 (1995) , available on Lexis and Westlaw or in your favorite law library.] That tax treatment is hugely different. Just for a start: ● Gambling losses cannot be deducted against any other income, only against gambling winnings. In contrast, net losses from Wall Street trading are deductible agains...

Media executives around the globe are clamoring for new and alternative business models and industry associations everywhere are holding seminars and conferences on how to create and discover them. There is just one problem: They don’t know what business models are. When you cut through the rhetoric, you find that most executives are merely interested in finding new revenue streams. Even when you consider firms touted as having best practices in that regard, none have been very successful in establishing them. The reason is simple: The dominant thought about business models is highly limited and far too narrow to solve the contemporary challenges of media industries. Business models are not merely about the revenue streams. Instead, they establish the underlying business logic and elements. They involve the foundations upon which businesses built, such as companies’ competences, value created, products/services provided, customers served, relationships established with customers and pa...

On March 31st, The Business was down three members, with Alex Koll, Chris Garcia, and Bucky Sinister all working elsewhere. To address the lack of manpower, we invited all of the members of the about-to-conclude SF Comedians Fantasy League to perform. We welcomed Jeff Cleary, Joey Devine, Eliot Langford, Julien Rodriguez, Chris Remmers, and the great W. Kamau Bell, along with Businessman and host, Sean Keane. Some comics discussed basketball extensively, both their fantasy teams' generally woeful performances or the woeful performances of their favorite team, if that team was the Golden State Warriors. Joey Devine told a touching story about receiving the Most Inspirational Player Award at Tim Hardaway's basketball camp, an honor usually given to a kid with a disability or a fatal disease. Joey was neither; he was simply terrible at basketball, and prone to skipping wind sprints in order to sneak upstairs and eat hamburgers. Eliot Langford mentioned the disappointing Warrio...

The New York City Off-Track Betting Corp. (NYC OTB), the only bookmaker in recorded history to consistently lose money, is in bankruptcy. Its chairman, Sandy Frucher, has proposed making it solvent through the simple remedy of not bothering to pay the racetracks and the horsemen anything. Unless of course, NYC OTB miraculously turns a profit, in which case the folks who put on the show would get some fraction of that profit. As we all know, it's easy for creative accounting to either manufacture or disguise a profit, so it's hard to imagine that NYC OTB would have much incentive to be profitable. After all, as NYC OTB is a state-owned corporation, any profit wouldn't stay in the pockets of Frucher and the myriad other managers anyway. Thanks to my Castle Village Farm partner Peggy Rees Smith, though, for pointing out that there are some good ideas out there for cleaning up the OTB mess, even if New York politicians aren't willing to do the obvious and just close it dow...

The auction of Laurel and Pimlico and the rest of Magna Entertainment's Maryland properties has been cancelled, and Magna's lawyers went to bankruptcy court today with a revised reorganization plan that would leave Frank Stronach in control of Maryland racing for the foreseeable future. The auction was to have been held Thursday, March 25th. According to the Blood-Horse (which posted its story about an hour and a half after mine), Stronach's captive company, MI Developments, will pay $13 million to cover secured claims by the PNC Bank, $6 million for unsecured creditors of the Maryland tracks, and $5 million to the DeFrancis family, as a buyout of their claim to a share of slots revenue. In addition, Stronach's lawyers last week secured agreement from the unsecured creditors committee in the larger Magna entertainment bankruptcy to settle the creditors' pending lawsuit for a payment of $89 million, also to come from MI Developments. More details are available at t...

New York racing is facing a crisis. There are still no slots at Aqueduct, nine years after the concept was approved by the Legislature, and the latest attempt to select a casino operator has ended in a political farce. New York City OTB is in bankruptcy, owes NYRA and horse owners some $14 million, and wants to solve its problems by having us give them the simulcast signal for nothing. And New York State, which promised NYRA an additional $30 million in operating funds if slots weren't underway by March 2009(!), has shown no sign of coming up with the money, even though it's that state's fault that the slots aren't there. If nothing happens, NYRA really will run out of money sometime later this year. NYRA, the horsemen and NY breeders all need the state government to step up to its responsibilities right now, before we have to start cancelling racing days and lowering purses even further. New York racing and breeding directly provides some 35,000 jobs at the tracks and ...

Industry, scholarly and policy discussions about the future of the news industry in North America and Europe continue to focus on how news enterprises can sustain themselves in the 21st century. Publishers keep asserting that things will be fine if they can erect pay walls and charge for news online and they argue that governments should provide legal protections for online news so they can make news a viable digital business product. Their approach is wrong and ignores the fundamental reality that news has never been a commercially viable product because most of the public has been, and remains, unwilling to pay for news. Consequently, news has always been funded with income based on its value for other things. Historically, the first collection and dissemination of news was funded in ancient times by emperors and kings, who used governors and officials throughout their realms to collect news and information and send it to the seat of power. Emissaries, consuls, and ambassadors collec...