KENTUCKY TASK FORCE ISSUES REPORT

by | 11.17.2010 | 12:46am

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.

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