Posts Tagged ‘steve beshear task force on the future of horse racing’

By Ray Paulick

Kentucky Gov. Steve Beshear’s Task Force on the Future of Racing reported its findings in a hearing in the state capitol in Frankfort on Monday. The Task Force, chaired by Tracy Farmer, vice chairman of the Kentucky Horse Racing Commission, made the following recommendations through various subcommittees:
 
INDUSTRY FINANCIAL MATTERS RECOMMENDATIONS:
1-Kentucky needs increased purses to remain The Horse Capital of the World.
2-Kentucky’s Breeders’ Incentive Fund must remain competitive in order to retain the best stallions and mares.
3-Kentucky needs to expand the Kentucky Thoroughbred Development Fund to retain high-quality racehorses.

Keeneland president Nick Nicholson, who chaired the financial matters subcommittee, said his committee dug into a great deal of research comparing Kentucky’s breed programs with other states. “The stark reality is this,” Nicholson said. “The more we dug, the worse it looks. … Other states are trying to reach out and take what Kentucky has. The threat (to Kentucky) is very real, and it’s not long term – it’s imminent.” Nicholson said he has “100% certainty” that “if we maintain the status quo our position vis a vis other states will deteriorate.”

FUNDING AND STAFFING RECOMMENDATIONS:
1-Hire 10 new full-time staff members, consisting of two state stewards, two auditors, one paralegal, a staff attorney, two investigators, a racing veterinarian, and a veterinarian technician. Hire additional interim personnel as needed.
2-Put all three Thoroughbred stewards and Standardbred judges on the KHRC payroll.
3-Submit a budget request for a pari-mutuel information monitoring system as a capital project.
4-Require the various participants in the industry to share in funding the regulatory body.
 
The following funding mechanisms are proposed:
1-Dedicate to the KHRC a specific dollar amount from the General Fund from the pari-mutuel tax.
2-Increase takeout on exotic bets and win-place-show bets, and dedicate the increase to funding the KHRC.
3-Require the owners of the top three finishers to contribute toward the cost of drug testing in any race in which the purse is $10,000 or more.
4. Require the racetracks to continue to pay any cost of drug testing not covered by the owners.
5. Increase the pari-mutuel tax on racetracks with an average daily handle of $1 million or more and dedicate the increase to funding the KHRC.
6-License tote companies and advance deposit wagering (ADW) companies.
7-The subcommittee recommended that if other funding sources are not found, the amount of the reimbursements from tracks for the compensation of KHRC employees be increased and that tracks continue to pay for drug testing charges.

INTEGRITY OF RACING AND ALL PARI-MUTUEL ACTIVITIES RECOMMENDATIONS:
Short-term (end of fiscal year 2010)
1-Fill current vacancies in the positions of pari-mutuel wagering supervisor, director of enforcement and investigator.
2-Obtain CHRIMS system (Comprehensive Horse Racing Information Management System).
3-Require all racetracks and off-track betting sites to notify KHRC of communications, reports, or investigations by any state or federal regulatory agencies.
4-Require a track to record the exact time of races on all video feeds originating from Kentucky, require a tote company to certify the exact time of the closing of betting windows, require all tracks, tote companies and video providers to synchronize their time systems, and require tracks to provide a tote company with written permission for KHRC to receive handle and wagering information directly from the tote company.
5-License and regulate tote companies.
6-Establish a Kentucky Horse Racing Integrity Hotline.
7-License and regulate advance deposit wagering companies.
8-Develop a method to license and supervise all vendors of products sold to trainers, veterinarians and grooms for use at tracks.
9-Hire and train additional security personnel to investigate alleged violations of Kentucky laws and regulations.

Long-term
1-Direct the pari-mutuel wagering supervisor to review available wagering monitoring systems and programs and obtain an appropriate system.
2-Develop career paths for investigators, auditors and stewards.
3-Continue efforts to verify and regulate wagering into Kentucky pools.
4-Monitor the progress of national efforts regarding the early closing of pools.
5-Establish regulations regarding past posting, cancel delay, late odds changes and unusually low payoffs.

LABORATORY FACILITIES RECOMMENDATIONS:
1-Establish a nonprofit, world-class research and drug testing institute with a significant accreditation status.
2-Solidify, through further research, the cost estimates and identify potential additional revenue and funding sources.
3-Establish a foundation to begin raising a $10-million endowment for operating expenses.
4-Establish an executive board of up to five members, including a chief executive officer, one member of the KHRC, and one member of the Equine Drug Research Council to guide the institute. The executive board would develop goals and a detailed business plan, collaborate with financing partners, work with the University of Kentucky on organization structure and facility development, and hire a labor directory, among other functions. The Task Force did not address the issue of expanded gambling in Kentucky.

The full Task Force voted to approve the report, which will be sent to Gov. Beshear.

Ray Paulick will be live blogging the meeting of Kentucky Gov. Steve Beshear’s Task Force on the Future of Horse Racing at 1 p.m. Eastern today. The Task Force meeting takes place at Keeneland. Following is the agenda:

Opening remarks from Task Force chairman Tracy Famer

Discussion regarding Proper Staffing and
Funding Levels of the KHRC Ellen Hesen

Discussion regarding Industry Financial Matters Nick Nicholson

Discussion regarding Integrity of Racing
and Pari-mutuel activities Edward Bonnie

Discussion regarding Laboratory Facilities
in Kentucky Robert Beck Jr.

1:15 p.m. … Late starting, but Task Force chairman Tracy Farmer calls the meeting to order and announces that there is a quorum, Steve Sexton of Churchill Downs being the only apparent no show. That’s better than the last Task Force meeting I covered, when a subcommittee on integrity failed to attract a quorum.

1:20 p.m. … Quarter Horse racing now has a representative on the Task Force, Ed Ashcraft, who talked briefly about a Quarter Horse meeting held on the Polytrack at Turfway Park this year. He called it a success and said something about people like Wayne Lukas and Bob Baffert, who used to train Quarter Horses. Relevance?

1:25 p.m. … Sexton arrives. Must have got a speeding ticket on I-64 coming over from Louisville.

1:28 p.m. … Ellen Hesen reported on the proper staffing and funding levels for the Kentucky Horse Racing Commission and source of funding. She’s not talking loud enough for anyone to hear her, but we know what she’s saying: the commission needs more staff and more money.

1:29 p.m. … Someone in the audience asks the speakers to talk louder so that people can hear what they are saying. Amen!

1:29 p.m. … Correction on Sexton. No speeding ticket. He went to Fasig-Tipton instead. Keeneland president Nick Nicholson hopes that’s not an omen.

1:30 p.m. … Speaking of Nicholson, he takes the floor to offer his report on the subcommitte on industry financial matters. It’s a huge industry, he says, with $4 billion in economic impact and between 80,000-100,000 jobs.  He’s done this PowerPoint thing before. Very professional. (Click here to read his entire report.)… "It should not surprise us that other states are coming after what we have," says Nicholson. "The competition for horses in other jurisdictions is probably at an all-time high. … Racing secretaries (in other states) are pressuring trainers not to ship their horses to Kentucky. … Alternative gaming has fueled dramatic increases in purses in other states. .. Breeders are moving broodmares and stallions to others states." In short, we are headed straight  to hell.

1:35 p.m. … In big bold type: "PURSES ARE KEY MEASURE OF COMPETITIVENESS," say Nicholson. They lead to better horses, higher quality racing, which attract more fans and betting handle and a better simulcast product that people bet more money on. Total purses in Kentucky have not grown in recent years, Nicholson says. All states where purses are growing have alternative gaming, he adds."Slot machines at New York tracks will dramatically alter Kentucky racing. … Illinois racetrack will soon begin receiving riverboat subsidies…of $75 million. … The Illinois condition books will be stronger than they have been in years. … Purses in Indiana will double from slots from 2006 to 2008."

1:40 p.m. .. Nicholson puts up a map like one of those red states/blue states maps showing the electoral count, in the presidential  except its slots states and hobo states. The slots states are taking over racing.

1:43  p.m. … If you like bar graphs and electoral maps, Nicholson’s presentation is a dandy. But it’s also downright depressing. It’s clear that our wagons have to be removed from horses and hitched to slot machines. 

1:45 p.m. … More depressing news. Pennsylvania will be the center of the Thoroughbred world by 2009. Purses will be $166 million, a 400% increase from 2006. Pennsylvania’s purses will even be better than New York’s. Looks like Kentucky polilticians better legalize moonshine or medicinal marijuana to replace the lost Thoroughbred business that’s a comin’ round the corner.

1:48 p.m. … Still, Nicholson says Kentucky is the only "exporter" of Thoroughbreds in the U.S., that other states focus on having their horses competing against each other in restricted state-bred races, and that Kentucky-bred horses are competitive on a world stage. Check mark to Kentucky.

1:49 p.m. … The Kentucky Thoroughbred Development Fund is shrinking like a horse coming off steroids, one chart shows. The amount of awards have dropped by 25% from over $8 million in 2002 to less than $6 million this year. Erase that check mark.

1:51 p.m. … Pennsylvania again. Their breeders funds have jumped from $8 million to $15 million. Nicholson runs through other states with breeders fund programs. Louisiana and New Mexico up. New York heading up soon. There is a saying here in Kentucky about the national ranking of our state’s education system: "Thank God for Mississippi." Nicholson doesn’t say it, but when he shows how pitiful the California bred breeding fund is, you can almost hear the people in the room say, ‘Thank God for California."

1:55 p.m. … "This subcommittee’s been a wakeup call for us," Nicholson concludes. He talks about a deluge of competition from other states and says, "We cannot afford the status quo." Ellis Park owner Ron Geary talked about all the new slot machines at Indiana tracks he saw on a visit there. Then he said he went to Philadelphia Park to see the slots. "I came back completely stunned about what kind of competition we have," Geary said. "We’d better get on-track or we’re going to get left behind."

2:00 p.m. … Ned Bonnie, the attorney who chairs the subcommittee on integrity, gave a lawyerly report on his panel’s meeting that focused on how to make sure wagering is stopped when it’s supposed to (i.e., once a race begins). He reviewed the presentations from the meeting and then moved on to talking about backstretch "shakedowns" of trainers and veterinarians. He seems to intimate that harness tracks are doing a better job of surveillance and searches, citing a recent search at the Red Mile of two veterinary trucks during which some prohibited substasnces were found. "The responsibilities on the integrity issues vis a vis medication issues have been delegated to the Equine Drug Council," Bonnie said, "and they have assumed the responsibility of talking about integrity related to the medication issue."

2:05 p.m. … Another attorney, Bob Beck Jr., is head of the  laboratory facilities subcommittee. "There is a great deal of support for establishing a (drug testing)  laboratory in Kentucky," he says. "If we’re not going to do a lab that isn’t world class, it isn’t worth pursuing," he added. Beck said it will be important to hire a lab director, he added.

2:10 p.m. Chairman Farmer thanks all of the committee chairs for their reports and says, "The task force is moving forward very forcefully. We intend to meet Nov. 25 in Frankfort, hopefully with a conclusion of all these committees and combine them into one report, which we will give to the governor."

Meeting adjourned.

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