Payroll, Drug Testing, Oversight Are Concerns As Illinois Horse Racing Heads Into New Era

by | 08.06.2019 | 5:15pm
Arlington Park in Arlington Heights, Ill.

With the announcement earlier this summer that expanded gaming legislation had been signed by Illinois Gov. J.B. Pritzker, many horsemen breathed a sigh of relief. At last, they thought, a state which had struggled to be competitive with neighboring Indiana and Kentucky would finally be able to hold its own. It remains unclear when and how Thoroughbred purses could see an increase, and what kind of ripple effect that may have on the rest of the sport in Illinois. One horsemen's group in Illinois projects yearly purses could go from $21 million to $40 million or $50 million by 2021.

No one knows yet whether the Illinois Racing Board (IRB) will see a budget increase related to improved purses, which may drive more race dates. Whether they know it or not though, horsemen should probably hope to see higher numbers on one of the least glamorous line items on IRB's annual reports: employee payroll.

Illinois racing has been in trouble for at least a couple of decades. Harness racing in the state took a hit at the end of 2014 when Balmoral Park and Maywood Park filed for Chapter 11 bankruptcy and ran their last races in 2015, taking with them 96 race dates each. (Though Hawthorne absorbed some of those harness dates – it was awarded 128.) Dates at all three Thoroughbred tracks have dropped in that time; Arlington went from 77 in 2015 to 71 this year; Hawthorne from 83 to 52, and Fairmount from 54 to 41. In the same time, handle has gone from $449,400,000 to $367,500,000. Horses and people have left – including former Illinois Gov. Jim Edgar, whose harness horses moved to Indiana during the gradual exodus. As a result, the state's breeding program has slipped so far that state-bred races in Illinois now take horses bred in Arkansas and Louisiana in order to fill.

The IRB headquarters must have become a lonely place, too. Between 2017 and 2019, the board's director of licensing, in-house counsel, director of mutuels, director of operations, and director of security all retired or otherwise ceased working for the IRB. Some of those positions simply sat vacant for months, while others apparently had their responsibilities absorbed into existing positions. The board announced the employment of current director of mutuels Michael Belmonte in late March 2019, but previous director of mutuels Bob Lang retired in late May 2018, leaving the position vacant for nine months despite a requirement by state law that it be occupied.

General counsel Michael Pieczonka left the IRB in early November 2018, and current counsel John Gay was only recently brought on board, leaving the IRB with no lawyer for at least six months.

“That filters down to the rest of it. If that little attention is being paid to those top level positions, you can imagine how they handle the, in their eyes, the more 'menial' jobs,” said an industry participant who wished to remain anonymous.

Those “menial” jobs, based at racetracks rather than the executive office, are getting harder to fill. Maywood and Balmoral ran year-round, which enabled the IRB to offer year-round employment to workers based there. With shorter spurts of seasonal work, it's more difficult to get experienced racing officials in those positions, and just as hard to keep them.

Then there's the case of Ed Mingey, a retired Chicago police officer whose position was listed in a 2018 audit report as director of both security and licensing. Sources say Mingey's retirement last year was abrupt, unlike some of the other departures, which had been expected. In June 2018, Mingey's name was splashed across Illinois media after a civil jury found he and two other officers framed a man named Jacques Rivera for a 1998 murder on Chicago's West Side and awarded Rivera $17 million in damages. Rivera spent 21 years in prison before a witness recanted testimony, leading to Rivera's exoneration in 2011. The three former detectives were ordered to pay $175,000 out of their own pockets in compensation to Rivera, while the city shouldered the rest of the award. The officer most media outlets focused on after the verdict was former gang crimes detective Reynaldo Guevara, who was the subject of a 2017 BuzzFeed report alleging he fabricated evidence against as many as 49 people convicted of murder.

Rivera's case isn't the only one in which Mingey has been named—in fact, Mingey has been listed as a defendant alongside Guevara in 11 proceedings filed in federal court since 2017, the most recent having been opened last April.

In late September 2018, IRB executive director Domenic DiCera sent an email to employees announcing Mingey would be returning to his role as director of security – just months after the jury ruled in the Rivera case – as a 75-day retiree, meaning he was on a contract to work 75 days at a time. As of July 1, an employee salary database for Illinois indicated Mingey had worked just 23 days for the calendar year of 2019.

“Mr. Mingey has served the board since 2003 and the Board has a high level of confidence in his capacity as the director of security,” said Mickey Ezzo, IRB Projects Manager.

What exactly Mingey “directs” is unclear, as there are no other security personnel at the IRB, and no one has been brought on to supplement on the days he's not working. In fact, a state that held 241 days of racing last year has no investigators at all. Instead, stewards are charged not only with upholding the rules of racing before and during the running of the race, but also with investigating complaints against licensees in addition to adjudicating them – this, despite a restriction only allowing them to work during race days with one “administrative” day per week. At Fairmount Park, for example, this means there could be no steward or state security personnel present at all for four days out of the week.

It also means that if a licensee wants to bring misdeeds to the attention of racing officials, they most likely have to visit the stewards' office, which may seem too conspicuous for backstretch workers low on their employer's totem pole. Most other major racing states have at least one commission investigator, who maintains a regular presence on the backstretch, gathering evidence and conducting interviews that can be brought to the stewards for a hearing.

The Racing Board does maintain an integrity hotline for attendees to report race fixing or animal abuse. A flyer on the IRB website touting the 24-hour integrity hotline assures users “the matter will be turned over to the Racing Board investigators for follow-up.”

One of the many duties stewards are juggling is final approval of license applications – an aspect of IRB regulation that has drawn attention from auditors. An audit ordered by the state in 2016 reported 21 findings (nine of which were repeats from the prior year) of areas where the IRB was not in compliance with its own regulations, among them concerns about the chain of custody of post-race urine and blood samples at a Standardbred meet, missing employee records, and inadequate control over cash management and receipts. In an audit concluding in 2018, the number of findings was 11, nine of which were repeats from the prior year. Both audit reports raised concerns about licensing.

Auditors found that although Illinois law mandates licensees have their licenses in hand prior to the start of a race meet, this often didn't happen. Illinois licenses expire on Dec. 31 of the calendar year they're issued, so everyone working at a track must go through the application process annually before the meet begins. Between 2014 and 2016, 56 percent of surveyed race officials at an unidentified Thoroughbred track received their license from the board three to 82 days late. One outrider never got a license at all for the 2016 race meet. At the time of the 2018 audit, figures were better, with 19 percent of surveyed officials getting their licenses between one and 127 days late. The IRB's response to the 2018 auditor report indicated the organization had “initiated corrective action procedures” but insiders say the process was no better in 2019. A lone license clerk was working at Fairmount Park to process all license applications and to take fingerprints, and wasn't permitted to begin for the season until four days before the meet opened.

What must commissioners think?
Seats on the IRB are appointed by the governor and while knowledge of harness or Thoroughbred racing/breeding are required, there is no requirement that the appointees have any prior experience on another commission.

The backgrounds of racing commissioners vary greatly in all jurisdictions, and often there can be a struggle between the desire to have commissioners well-versed in racing and to ensure the commissioners have relatively few conflicts of interest when asked to make decisions impacting active licensees. 

It's possible Illinois governors have occasionally strayed too far from the business when selecting board members, however. IRB meetings used to travel from track to track, enabling members to get a look at facilities they may not see routinely. At a social event at Maywood Park several years ago while IRB members watched a harness race in progress, one board member could be overheard asking another, 'Why do the horses run with the buggies here?'

It is perhaps unsurprising then, that IRB meeting minutes do not depict board members asking too many questions about the board's activities. In fact, they've had little opportunity to do so in 2019 — seven months into the year, the IRB has met four times after three monthly meetings were cancelled. According to agendas and meeting minutes available online, the primary questions brought before the IRB have historically been vendor licenses, racing official approvals, and track date requests. Multiple sources told the Paulick Report board members were never provided reports on wagering, stewarding, track operations, or equine health/safety by IRB staff – a practice that is a standard part of every commission meeting in nearby Kentucky. In fact, the board only saw the state veterinarian once in their six-year term, and the head state steward or director of security rarely.

The IRB was not consulted or kept informed about the arrival and departure of employees, including the departure of Marc Laino, who has been subsequently paid as a consultant to current executive director Domenic DiCera for the past three years. The board only learned after the fact that the entity was paying former Indiana Horse Racing Commission executive director Joe Gorajec as a consultant to go through Illinois rule language and eliminate or clarify old and redundant rules. (This, Gorajec said, was a tremendous and much-needed task, during which he came across a rule so old it stated entries may be taken by telegram.) According to a government database, Gorajec was paid $36,000 per year of work.

The Board was also never consulted on the renewal of the contract between the IRB and the University of Illinois for equine drug testing. The University of Illinois' Animal Forensic Toxicology Laboratory is RMTC-accredited, but as we've written before, accreditation refers only to the lab's capabilities, not the degree of testing permitted under a contract it may have with a racing authority, and many racing authorities are looking to save money.

This year's contract between IRB and University of Illinois states that the laboratory is permitted to test only Thoroughbred Owners and Breeders Association (TOBA) graded stakes samples and “a random 10% of all other plasma specimens” for anabolic steroids testosterone, boldenone, nandrolone and stanozolol – meaning that of those races outside the TOBA graded stakes committee's authority, 90 percent of samples are not screened for anabolic steroids at all. This, more than a decade after regulators, reacting to public outrage over Big Brown, tightened restrictions on anabolic steroid use on the racetrack.

Additionally, the contract makes it clear that the University of Illinois doesn't have the ability to call a positive for EPO (erythropoietin) or darpoietin.

“Confirmatory tests will be available in the laboratory for all prohibited substances detected in screening tests, with the exception of erythropoietin, for which no confirmatory test is currently widely available,” reads a section of Appendix A to the current testing contract.

Instead, the contract requires the University of Illinois to abide by Title 11, Chapter 1c Section 603.190 of the administrative codes, which state that the IRB will arrange to have horses' blood tested for antibodies against EPO, rather than the substance itself.

Traditionally, laboratories discover EPO in a two-step process. First, the lab uses an ELISA kit to pick up on the presence of EPO, and then has to forward a split sample to a more advanced lab, which performs a mass spectometry test to confirm. Although mass spectometry is used routinely in other types of drug detection, the test for EPO requires multiple days and specialized advanced training. If both tests come back positive, it's for the presence of EPO, not of antibodies to EPO. If horses are given foreign EPO repeatedly over a period of time, it's possible their bodies could begin to recognize the substance as an invader and begin producing antibodies to it. When this happens, the affected horse's immune system may even produce antibodies to its own, naturally-produced EPO, which can result in anemia.

Dr. Rick Sams, former laboratory director for LGC Sport Science Lab in Lexington, Ky., said this immune reaction is not going to happen in all horses receiving EPO, and it's not going to happen quickly – so the test has a slim chance of catching administration until it has become chronic.

“The antibody test described in the rule was initially developed by Dr. George Maylin at Cornell before we had sufficiently sensitive ELISA tests to detect EPO in blood or urine and before confirmatory analyses were available,” said Sams. “I had concerns that the test would lack specificity and chose not to use it. The ELISA test and confirmatory analyses came along shortly thereafter and I elected to use them instead of the Maylin test. I have been under the impression that no one uses the Maylin test any longer because it has been shown to produce false positive results. The lack of specificity means that an owner could lose their horse and a trainer's reputation could be severely damaged if the results are incorrect.”

Even if a horse does get a positive test, there is no disqualification for a horse who comes up with a positive EPO antibody test, no purse redistribution and no penalty to the trainer of the horse. The horse will be placed on the stewards' list and not permitted to enter a race until after a clean retest.

And if the drug testing results don't strike IRB board members as unusual, the results should. Prohibited drug positives have dwindled down to nearly nothing – even taking into account the loss of two harness tracks. In 2013, before Balmoral and Maywood closed, the state had 518 total race dates and 13,817 samples tested. In 2018, Illinois ran 285 total dates and had 7,353 samples tested. But in 2013, there were 30 total positive drug positives from 13,817 samples, for a finding rate of about .22 percent. In 2018, there were just six findings in the entire state from 7,353 samples taken – a finding rate of .08 percent.

Neighboring Indiana's drug testing figures told a different story – with 281 dates and 9,004 samples, Indiana picked up on 38 positives for a hit rate of .42 percent, which was about five times higher than Illinois.

“Positives have gone down? We've found Jesus here! We're all angels. I've never seen anything like it,” said one Illinois industry participant who requested anonymity.

“I think everyone did as well as they possibly could”
None of this means all participants in Illinois racing are necessarily frustrated, of course.

Peter Scalcione, an owner/trainer based at Fairmount Park and former secretary/treasurer for ILHBPA, said he feels comfortable with the level of security and regulation in the state.

“I know the internal mechanism and I know what's going on,” Scalcione said. “All the tracks are fully staffed as far as stewards. Everybody's got three stewards and they all function correctly.

“Clearly when you have an industry that's been as depressed as ours has, which has been terrible for I'd say 10 to 12 years, when you take that into consideration, most of the horses and trainers and personnel filtered off to the surrounding states that had gaming already. It's easy to see why you would have, for instance, racing officials not working as much as they used to.”

Fairmount has gone from five days of racing per week to two.

“When you're racing two days a week, why would you need racing officials five days a week? Everything that has transpired in the racing industry is just a domino effect because there's no money in Illinois,” Scalcione said. “I think the bottom line in Illinois is everyone made the adjustments they felt they needed to make to survive.”

But the portrayal of the IRB as struggling mightily for every dollar since the closure of two harness tracks doesn't quite hold up, according to the board's annual reports from 2013 and 2018.

In 2013, when things in Illinois were slightly less dire than they are now, total revenues received were reported as $13,131,921 while operating costs for the IRB were $7,532,944. Revenues were down five years later, but not as drastically as operating costs – the IRB reported $12,166,167 in revenue for 2018 and $4,970,474 in operation costs. Racing dates were down from 518 to 285, about 45 percent. Meanwhile, the largest expenditure in the budget –drug testing – saw costs fall from $1,856,218 to $777,060 in the same time, a change of 58 percent.

In 2017, the IRB found itself with an operating surplus of $500,000, which was transferred to the purse accounts at the state's four tracks for the next year. One horseman said that when all divided up, the bump resulted in an increase of a few hundred dollars per race.

“There's always someone who thinks that something can be improved or done better,” said Scalcione. “Everybody wants a perfect world and it just doesn't work that way. I would venture to say that if there's an issue with anything it's the tracks that have primarily cut back on a lot of the things they used to do. There's been no harm done to anyone, there's been no mismanagement or ill care toward a horse. Everybody here has done their job.

“All in all, I would tell you that based on the circumstances we've had for the last 10 to 12 years, I think everyone did as well as they possibly could. It's not perfect right now but it will improve.”

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