Executive Director Gorajec:
Please consider this email as input from Indiana Breeder & Owner Protection (IBOP) regarding the request of the Quarter Horse Racing Association of Indiana's (QHRAI) to amend 71 IAC 12-2-18 Allocation of interstate simulcasting revenue to purses and 71 IAC 12-2-19 Allocation of breakage and outs.
Executive Summary
The Indiana Horse Racing Commission (IHRC) approved two quarter horse-only race dates for the 2012 racing calendar, which was identical to the quarter horse-only race dates in 2011. For the most part, the quarter horse racing program is not being measured by race dates, but by the number of races run. Therefore, considering an amended rule to redirect revenues to expand the quarter horse racing program, to what as a goal is a very arbitrary number of 200 races, is tantamount to approving additional quarter horse racing dates. Effectively, the IHRC, by consideration of the QHRAI request, is considering expanded racing opportunities (race dates) for quarter horses for 2013 and beyond. At the January 24th IHRC meeting, you compared the "explosion" of the number of quarter horse RACES from 2003 to 2011 versus thoroughbred RACE DATES increasing from 100 to 125 in the context of program growth. While this comparison, race dates to races, is bit of an apple versus an orange, it does somewhat connect two different measurements into a comparison of racing opportunities.
IBOP's position is that any decision on the QHRAI request should be delayed until the discussion regarding applications for race dates are reviewed for 2013. Such a discussion will allow the IHRC to view the QHRAI request within what the IHRC requires of itself under 71 IAC 11-1-7(2) and 71 IAC 11-1-7(7) in determining racing opportunities for all breeds. (See 71 IAC 11-1-7 copied below.) To our knowledge, the evaluation of the QHRAI request on these two points is very incomplete. In addition, our understanding, from comments made at the March 7th IHRC meeting, is that any change in revenues, if approved by the IHRC, would not occur until January 1, 2013 any way.
71 IAC 11-1-7 Assignment of racing meetings
Authority: IC 4-31-3-9
Affected: IC 4-31-5-9
Sec. 7. In determining the assignment of racing meetings and race dates to permit holders under IC 4-31-5-9, the commission shall consider factors relating to the economic and practical feasibility of conducting racing meetings at various tracks. Factors to be considered shall (emphasis added) include, without limitation, the following:
(1) The types and dates of racing meetings being held elsewhere, both within and outside of Indiana.
(2) The effects that various types of pari-mutuel racing have on one another. (emphasis added)
(3) The quality of horse racing provided at various tracks.
(4) Past dates.
(5) Past performance of the permit holder.
(6) Whether the permit holder has complied with all applicable laws and rules relating to horse racing.
(7) Whether the assignment will maximize revenues to the state. (emphasis added)
(8) Whether the assignment will adversely affect the public health, welfare, and safety.
(9) Stability of dates.
(10) The stability of the racing circuit.
(Indiana Horse Racing Commission; 71 IAC 11-1-7; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1211; emergency rule filed Jan 27, 1995, 3:30 p.m.: 18 IR 1507; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
Delaying the QHRAI request until later in 2012 will allow the IHRC staff, in conjunction with the breed organizations and breed development advisory committees, to study "The effects that various types of pari-mutuel racing have on one another" and determine "Whether the assignment will maximize revenues to the state." We believe that the same care in the assignment of racing dates should be taken regarding the QHRAI request to reallocate revenues and include an understanding of the fiscal impact to the State of Indiana. Plus, reviewing the QHRAI request after the conclusion of the 2012 racing calendar will allow for a better review of the actual impact on racing from the $3 million reduction to slot revenues from the change in the law in 2011, the impact of any continued erosion of pari-mutuel handle nationally or in Indiana, and the impact of the expanded simulcast operations at Ellis Park on Indiana Downs' Evansville OTB.
Facts That IBOP Considered
There were many factors that the IBOP board considered in our position. Please note that thoroughbred racing data is more readily available to our organization, hence the comparisons used.
--Demand for Quarter Horse Racing--
The best example of the demand for quarter horse racing can be seen with the above mentioned quarter horse-only race dates. On July 2, 2011, Indiana Downs had their quarter horse night where 10 races with purses totaling $537,000 were carded. the on track handle for the night was considered a huge success. According to Equibase, the on track handle was $82,977 which only trailed the on track handle for the final day of the Indiana Downs 2011 meet. However, the off track handle, as reported by Equibase, was $353,048 which was the worst handle for a full race card for the entire meet. There were similar results at Hoosier Park's quarter horse-only night on October 8, 2011. The on track handle for their 11 race card with $289,000 in purse money was reported by Equibase as $51,869 which was in the top five for the meet. Equibase reported the off track handle to be only $291,535 which was the worst full card result for the entire meet.
While on track handle for special quarter horse events can rival that of a thoroughbred or combined race card, over the course of 188 races, the averages tell a more complete story. While 2011 handle numbers have yet to be released by the IHRC, we reviewed data from the 188 quarter horse races in 2010. Based upon information obtained directly from the IHRC's 2010 Annual Report, the average live handle on quarter horse racing was $3,235 for those 188 races. Using the same source for thoroughbred handle numbers, the live handle per thoroughbred race was approximately 17% higher at $3,780. While the dollar difference in live handle is just over $500, the simulcast export handle as reported by the IHRC indicates that the average quarter horse race had export handle of $32,769 versus a significantly higher average for a thoroughbred race of $86,014.
There are numbers available (taken directly from the IHRC website) that a similar relationship existed in 2011 via review of contributions to purses from live racing. In 2011 thoroughbreds earned $1.858 million toward purses from the live racing product (the standardbreds earned $1.2 million) and the quarter horses earned just under $125,000 from their 188 live races. The quarter horse average for live racing revenues to purses was $660 per race versus $1,745 per race for thoroughbreds. (These number include the $3,461.76 recently moved from the quarter horse purse account to the thoroughbred purse account at Indiana Downs to correct the revenues from those flat racing program in 2011.)
There are economic reasons why the race tracks put the quarter horse races at the end of the race card rather than slot them for races 3, 4, and 5 on the prime of the race card. Those same economic reasons should be a consideration in the QHRAI request for additional revenues.
--Pari-mutuel Wagering Revenues--
According to the "Indiana Handbook of Taxes, Revenues & Appropriations" published by the Indiana Legislative Services Agency and the Office of Fiscal and Management Analysis, the State of Indiana received $2,985,181 from the pari-mutuel wagering tax in FY 2011. The most recent handbook illustrates a steady decline in the pari-mutuel wagering tax from $4,188,334 in FY 2007. We recognize the pari-mutuel wagering tax is inclusive of wagering on the live racing on track, the exporting of live racing, and the importing of outside signals. The general trend in pari-mutuel wagering is downward. With that said, the State of Indiana derives more tax revenues from wagering on racing, both live and simulcasting, in the following order; from thoroughbred racing, then standardbred racing, then quarter horse racing. We don't believe anyone disputes this fact. Considering a lower demand for the quarter horse racing product, we view the QHRAI request in the context of a zero-sum game. While the quarter horse racing program would benefit, that benefit would come at the expense of the two racing programs that do generate more fiscal impact on the track.
--Declining Thoroughbred Races--
Based upon information provided by The Jockey Club, thoroughbred races in Indiana have declined from their peak of 1150 in 2009 to 1065 in 2011 which is a 7.4% drop. The average number of thoroughbred races per day over that same period has dropped from 9.2 races per day to 8.9 races per day. Given that thoroughbred races are already declining, and given that there is less revenue available in 2012 and beyond, we view waiting until after the conclusion of 2012 race meet as a more prudent approach in considering the QHRAI request.
--Impact to Breed Development Programs--
While the Indiana Standardbred Association and Indiana HBPA represent their horsemen as it relates to '71 IAC 12-2-18 Allocation of interstate simulcasting revenue to purses', those organizations do not represent their breed development programs. Therefore, the IHRC should also hear from the breed development advisory committees as to the impact of the QHRAI request to future breed development programs regarding the reallocation under '71 IAC 12-2-19 Allocation of breakage and outs.'
Thank you for your consideration,
Jim Hartman
IBOP Vice-President on behalf of the IBOP Board of Directors
CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay
Saturday, March 31, 2012
Wednesday, March 28, 2012
Applicability Effect on Breeder Definition
Executive Director Gorajec:
Pursuant to 71 IAC 2-12-1 Procedures, Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider an amendment to 71 IAC 1.5-1-1 Applicability. IBOP would appreciate this amendment request be considered as an agenda item at the next regularly scheduled IHRC meeting. Please consider this correspondence as our petition for the commission to amend 71 IAC 1.5-1-1 to include, at minimum, Article 13.5 (Thoroughbred Development Program) to the list of articles currently mentioned in the rule. 71 IAC 1.5-1-1 currently reads as follows:
ARTICLE 1.5. FLAT RACING; DEFINITIONS
Rule 1. Definitions
71 IAC 1.5-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to articles 1.5, 2, 3.5, 4.5, 5.5, 6.5, 7.5, 8.5, 9, 10, 11, and 12 of this title. (Indiana Horse Racing Commission; 71 IAC 1.5-1-1; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2815, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
As you can see, 71 IAC 1.5-1-1 does not already include 'Article 13.5 (Thoroughbred Development Program) which means that the flat racing definitions in Article 1.5 may not actually apply to the administrative rules governing the thoroughbred breed development program described in Article 13.5. The ordinary and plain meaning of the language used supports this view. More specifically, and more problematic, the current construction of 71 IAC 1.5-1-1 without Article 13.5 appears to prevent the industry recognized definition of a thoroughbred breeder from being incorporated into the thoroughbred program where breeder's awards are concerned. As I'm sure you know, the definition of breeder in the thoroughbred breeding industry differs from that of the other two racing breeds, and is accurately defined in Article 1.5 as follows:
71 IAC 1.5-1-19 "Breeder" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 19. "Breeder" means the owner of the horse's dam at the time of foaling for thoroughbreds. In the case of thoroughbreds, the commission will recognize the breeder as the person designated as such on the Jockey Club's Certificate for a particular horse. For quarter horses, appaloosas, arabians, and paint horses, "breeder" means the owner of the dam at the time of service. (Indiana
Horse Racing Commission; 71 IAC 1.5-1-19; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2816, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Jan 21, 2004, 2:30 p.m.: 27 IR 1911; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
While the definition of breeder in 71 IAC 1.5-1-19, as noted above, meets the thoroughbred industry's definition as the owner of the mare at the time of foaling, this definition appears to not currently be applicable via 71 IAC 1.5-1-1 to the thoroughbred breed development breeder awards without the incorporation of Article 13.5 into 71 IAC 1.5-1-1. Without Article 13.5 incorporated into 71 IAC 1.5-1-1, the definition of the breeder for the thoroughbred program appears to have taken on the definition of breeder from Article 1 when that applicability language was changed to its current wording by emergency rule on April 21, 2004.
71 IAC 1-1-1 Applicability, copied below, specifically applies the definitions "throughout this title" which would give the impression and appearance to include those articles not listed currently in 71 IAC 1.5-1-1. Of course, the "title" mentioned in 71 IAC 1-1-1 references, very broadly, Title 71 Indiana Horse Racing Commission. The ordinary and plain meaning of the the language used would support this view. What the Indiana racing industry has come to understand as a two rule book system; one for standardbreds and one for the flat racing breeds, appears to not be quite accurate in the definition of a thoroughbred breeder per IHRC rules.
ARTICLE 1. DEFINITIONS
Rule 1. Definitions
71 IAC 1-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to [sic.] throughout this title. (Indiana Horse Racing Commission; 71 IAC 1-1-1; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1113; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2814, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Apr 21, 2004, 3:45 p.m.: 27 IR 2753; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
Based upon the breadth of the applicability of definitions in 71 IAC 1-1-1 and the more limited applicability in 71 IAC 1.5-1-1, the "standardbred" definition of breeder from 71 IAC 1-1-1 appears to be 'applied' by commission rules for determining an award eligible breeder in the thoroughbred breed development program in Article 13.5. By this apparent unfortunate oversight, the breeder definition applicable to Article 13.5; therefore, seems to be derived from the "standardbred" rule book through 71 IAC 1-1-18 which is copied below:
71 IAC 1-1-18 "Breeder" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 18. "Breeder" means the owner or lessee of the horse's dam at the time of breeding. (Indiana Horse Racing Commission; 71 IAC 1-1-18; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1115; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
The standardbred definition of breeder is, along with the quarter horse definition, the owner of the mare (dam) at the time of breeding. This definition of breeder in 71 IAC 1-1-18 is contrary to the recognized thoroughbred breeding industry definition, contrary to The Jockey Club definition of a thoroughbred breeder, and contrary to how the Indiana thoroughbred program has actually been promoted and paid breeder awards. Quite often in thoroughbred breeding, however, the owner of the mare at conception differs from the mare's owner at foaling.
IBOP recognizes that, as a current practice, the IHRC staff has been paying thoroughbred breeder awards as to the recognized thoroughbred breeding industry standards via the definition in 71 IAC 1.5-1-19. The current practice is the correct course of action for the thoroughbred breeding program in Indiana. However, the intent of the program does not appear to match the execution of the applicability rules. The current construct of 71 IAC 1.5-1-1 versus the current practice of paying thoroughbred breeder awards also appears to create a potential liability for claims to breeder awards already paid. Any person who has sold a mare in foal, where the resulting foal has become a registered Indiana-bred thoroughbred, could have a claim to any breeder awards based upon the performance of that foal. By the ordinary and plain meaning of the language used, past payments could be considered contrary to the construction of the IHRC rules when paid to the owner of the mare at the time of foaling.
Any potential liability is especially difficult to quantify given the significant increases in the thoroughbred foal crops in Indiana over the last five years. Many breeders and owners grew their operations through the acquisition of in foal mares either privately or via public sale to foal in Indiana. In reviewing just one of ITOBA's 2011 champions, we found an example of a potential claim of $25,000 from just races in 2011 where the owner of the mare at her breeding was different than the owner of the mare at the foal's birth. In addition, any potential liability expands as the larger thoroughbred foal crops begin to compete and to earn breeder awards. Plus, thoroughbred mares are being bred in the 2012 breeding season that would fall under the breeder definition in 71 IAC 1-1-18, not under 71 IAC 1.5-1-19.
While IBOP would rather not present a problem without a solution, we do believe that adding Article 13.5 under the specific references to applicability in 71 IAC 1.5-1-1 would fix the definition of a breeder for the thoroughbred program as of the effective date of any amendment and beyond. However, IBOP has no solution as to how to eliminate any prior liability for claims to thoroughbred breeder awards as per the apparent applicable definition in 71 IAC 1-1-18. Any other solution to the potential accumulating liability would be appreciated as well.
Thank you for your consideration of our request;
James Hartman
IBOP Vice-President
CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay
Pursuant to 71 IAC 2-12-1 Procedures, Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider an amendment to 71 IAC 1.5-1-1 Applicability. IBOP would appreciate this amendment request be considered as an agenda item at the next regularly scheduled IHRC meeting. Please consider this correspondence as our petition for the commission to amend 71 IAC 1.5-1-1 to include, at minimum, Article 13.5 (Thoroughbred Development Program) to the list of articles currently mentioned in the rule. 71 IAC 1.5-1-1 currently reads as follows:
ARTICLE 1.5. FLAT RACING; DEFINITIONS
Rule 1. Definitions
71 IAC 1.5-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to articles 1.5, 2, 3.5, 4.5, 5.5, 6.5, 7.5, 8.5, 9, 10, 11, and 12 of this title. (Indiana Horse Racing Commission; 71 IAC 1.5-1-1; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2815, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
As you can see, 71 IAC 1.5-1-1 does not already include 'Article 13.5 (Thoroughbred Development Program) which means that the flat racing definitions in Article 1.5 may not actually apply to the administrative rules governing the thoroughbred breed development program described in Article 13.5. The ordinary and plain meaning of the language used supports this view. More specifically, and more problematic, the current construction of 71 IAC 1.5-1-1 without Article 13.5 appears to prevent the industry recognized definition of a thoroughbred breeder from being incorporated into the thoroughbred program where breeder's awards are concerned. As I'm sure you know, the definition of breeder in the thoroughbred breeding industry differs from that of the other two racing breeds, and is accurately defined in Article 1.5 as follows:
71 IAC 1.5-1-19 "Breeder" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 19. "Breeder" means the owner of the horse's dam at the time of foaling for thoroughbreds. In the case of thoroughbreds, the commission will recognize the breeder as the person designated as such on the Jockey Club's Certificate for a particular horse. For quarter horses, appaloosas, arabians, and paint horses, "breeder" means the owner of the dam at the time of service. (Indiana
Horse Racing Commission; 71 IAC 1.5-1-19; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2816, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Jan 21, 2004, 2:30 p.m.: 27 IR 1911; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
While the definition of breeder in 71 IAC 1.5-1-19, as noted above, meets the thoroughbred industry's definition as the owner of the mare at the time of foaling, this definition appears to not currently be applicable via 71 IAC 1.5-1-1 to the thoroughbred breed development breeder awards without the incorporation of Article 13.5 into 71 IAC 1.5-1-1. Without Article 13.5 incorporated into 71 IAC 1.5-1-1, the definition of the breeder for the thoroughbred program appears to have taken on the definition of breeder from Article 1 when that applicability language was changed to its current wording by emergency rule on April 21, 2004.
71 IAC 1-1-1 Applicability, copied below, specifically applies the definitions "throughout this title" which would give the impression and appearance to include those articles not listed currently in 71 IAC 1.5-1-1. Of course, the "title" mentioned in 71 IAC 1-1-1 references, very broadly, Title 71 Indiana Horse Racing Commission. The ordinary and plain meaning of the the language used would support this view. What the Indiana racing industry has come to understand as a two rule book system; one for standardbreds and one for the flat racing breeds, appears to not be quite accurate in the definition of a thoroughbred breeder per IHRC rules.
ARTICLE 1. DEFINITIONS
Rule 1. Definitions
71 IAC 1-1-1 Applicability
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. The definitions in this rule apply to [sic.] throughout this title. (Indiana Horse Racing Commission; 71 IAC 1-1-1; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1113; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2814, eff Jul 1, 1995; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; emergency rule filed Apr 21, 2004, 3:45 p.m.: 27 IR 2753; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
Based upon the breadth of the applicability of definitions in 71 IAC 1-1-1 and the more limited applicability in 71 IAC 1.5-1-1, the "standardbred" definition of breeder from 71 IAC 1-1-1 appears to be 'applied' by commission rules for determining an award eligible breeder in the thoroughbred breed development program in Article 13.5. By this apparent unfortunate oversight, the breeder definition applicable to Article 13.5; therefore, seems to be derived from the "standardbred" rule book through 71 IAC 1-1-18 which is copied below:
71 IAC 1-1-18 "Breeder" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 18. "Breeder" means the owner or lessee of the horse's dam at the time of breeding. (Indiana Horse Racing Commission; 71 IAC 1-1-18; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1115; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31 a.m.: 20070404-IR-071070030RFA)
The standardbred definition of breeder is, along with the quarter horse definition, the owner of the mare (dam) at the time of breeding. This definition of breeder in 71 IAC 1-1-18 is contrary to the recognized thoroughbred breeding industry definition, contrary to The Jockey Club definition of a thoroughbred breeder, and contrary to how the Indiana thoroughbred program has actually been promoted and paid breeder awards. Quite often in thoroughbred breeding, however, the owner of the mare at conception differs from the mare's owner at foaling.
IBOP recognizes that, as a current practice, the IHRC staff has been paying thoroughbred breeder awards as to the recognized thoroughbred breeding industry standards via the definition in 71 IAC 1.5-1-19. The current practice is the correct course of action for the thoroughbred breeding program in Indiana. However, the intent of the program does not appear to match the execution of the applicability rules. The current construct of 71 IAC 1.5-1-1 versus the current practice of paying thoroughbred breeder awards also appears to create a potential liability for claims to breeder awards already paid. Any person who has sold a mare in foal, where the resulting foal has become a registered Indiana-bred thoroughbred, could have a claim to any breeder awards based upon the performance of that foal. By the ordinary and plain meaning of the language used, past payments could be considered contrary to the construction of the IHRC rules when paid to the owner of the mare at the time of foaling.
Any potential liability is especially difficult to quantify given the significant increases in the thoroughbred foal crops in Indiana over the last five years. Many breeders and owners grew their operations through the acquisition of in foal mares either privately or via public sale to foal in Indiana. In reviewing just one of ITOBA's 2011 champions, we found an example of a potential claim of $25,000 from just races in 2011 where the owner of the mare at her breeding was different than the owner of the mare at the foal's birth. In addition, any potential liability expands as the larger thoroughbred foal crops begin to compete and to earn breeder awards. Plus, thoroughbred mares are being bred in the 2012 breeding season that would fall under the breeder definition in 71 IAC 1-1-18, not under 71 IAC 1.5-1-19.
While IBOP would rather not present a problem without a solution, we do believe that adding Article 13.5 under the specific references to applicability in 71 IAC 1.5-1-1 would fix the definition of a breeder for the thoroughbred program as of the effective date of any amendment and beyond. However, IBOP has no solution as to how to eliminate any prior liability for claims to thoroughbred breeder awards as per the apparent applicable definition in 71 IAC 1-1-18. Any other solution to the potential accumulating liability would be appreciated as well.
Thank you for your consideration of our request;
James Hartman
IBOP Vice-President
CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay
Out-of-Competition Testing Definitions
Executive Director Gorajec:
Pursuant to 71 IAC 2-12-1 Procedures, Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider an amendment to 71 IAC 1-1-67.5 "Out of competition testing" defined. IBOP would appreciate this request be considered as an agenda item at the next regularly scheduled IHRC meeting. Please consider this correspondence as our petition for the IHRC to amend the location of '71 IAC 1-1-67.5 "Out of competition testing" defined' from Article 1 to Article 1.5 under Title 71.
Currently, there are two definitions of out-of-competition testing appearing in 71 IAC Article 1 Definitions. Both are copied below:
71 IAC 1-1-67.5 "Out of competition testing" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 67.5. "Out of competition testing" means that the commission may test horses at any time and at any location within the state of Indiana for any prohibited substances, practices, and procedures set forth in 71 IAC 8.5-2-5. (Indiana Horse Racing Commission; 71 IAC 1-1-67.5; emergency rule filed Jul 23, 2007, 9:16 a.m.: 20070808-IR-071070461ERA, eff Jul 18, 2007 [IC 4-22-
2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #07-461(E) was filed with the Publisher July 23, 2007.])
71 IAC 1-1-71.5 "Out of competition testing" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 71.5. "Out of competition testing" means that the commission may test horses at any time and at any location within the state of Indiana for any prohibited substances, practices, and procedures set forth in 71 IAC 8-3-5. (Indiana Horse Racing Commission; 71 IAC 1-1-71.5; emergency rule filed Jul 23, 2007, 9:16 a.m.: 20070808-IR-071070461ERA, eff Jul 18, 2007 [IC 4-22-
2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #07-461(E) was filed with the Publisher July 23, 2007.])
Currently, there is no definition of out-of-competition testing that appears in 71 IAC Article 1.5 Flat Racing: Definitions. Clearly, when these two rules were submitted to the Publisher, 71 IAC 1-1-67.5 was submitted erroneously and should have been submitted as 71 IAC 1.5-1-67.5. The rule itself references the out-of-competition testing in the flat racing rule 71 IAC 8.5-2-5. Our request would put the definition in the same rule book. Agenda items for when these two rules were approved by the IHRC may provide some additional insight.
Thank you for your consideration of our request,
Jim Hartman
IBOP Vice President
CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay
Pursuant to 71 IAC 2-12-1 Procedures, Indiana Breeder & Owner Protection, Inc. (IBOP) is requesting that the Indiana Horse Racing Commission (IHRC) consider an amendment to 71 IAC 1-1-67.5 "Out of competition testing" defined. IBOP would appreciate this request be considered as an agenda item at the next regularly scheduled IHRC meeting. Please consider this correspondence as our petition for the IHRC to amend the location of '71 IAC 1-1-67.5 "Out of competition testing" defined' from Article 1 to Article 1.5 under Title 71.
Currently, there are two definitions of out-of-competition testing appearing in 71 IAC Article 1 Definitions. Both are copied below:
71 IAC 1-1-67.5 "Out of competition testing" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 67.5. "Out of competition testing" means that the commission may test horses at any time and at any location within the state of Indiana for any prohibited substances, practices, and procedures set forth in 71 IAC 8.5-2-5. (Indiana Horse Racing Commission; 71 IAC 1-1-67.5; emergency rule filed Jul 23, 2007, 9:16 a.m.: 20070808-IR-071070461ERA, eff Jul 18, 2007 [IC 4-22-
2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #07-461(E) was filed with the Publisher July 23, 2007.])
71 IAC 1-1-71.5 "Out of competition testing" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 71.5. "Out of competition testing" means that the commission may test horses at any time and at any location within the state of Indiana for any prohibited substances, practices, and procedures set forth in 71 IAC 8-3-5. (Indiana Horse Racing Commission; 71 IAC 1-1-71.5; emergency rule filed Jul 23, 2007, 9:16 a.m.: 20070808-IR-071070461ERA, eff Jul 18, 2007 [IC 4-22-
2-37.1 establishes the effectiveness of an emergency rule upon filing with the Publisher. LSA Document #07-461(E) was filed with the Publisher July 23, 2007.])
Currently, there is no definition of out-of-competition testing that appears in 71 IAC Article 1.5 Flat Racing: Definitions. Clearly, when these two rules were submitted to the Publisher, 71 IAC 1-1-67.5 was submitted erroneously and should have been submitted as 71 IAC 1.5-1-67.5. The rule itself references the out-of-competition testing in the flat racing rule 71 IAC 8.5-2-5. Our request would put the definition in the same rule book. Agenda items for when these two rules were approved by the IHRC may provide some additional insight.
Thank you for your consideration of our request,
Jim Hartman
IBOP Vice President
CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay
Saturday, March 10, 2012
February 2012 Newsletter Archive
If you missed IBOP's February 2012 newsletter, click this link to download your copy: http://freepdfhosting.com/3d8f0215c4.pdf
Thursday, March 1, 2012
Administrative Rule of the Month - Scratches
As a trainer, Chicago area owner/trainer James DiVito has almost 6,000 starts to his credit. On May 25, 2011, he brought his own horse, Jimmy Got Even, from his base in Chicago to Indiana Downs. Jimmy Got Even was entered in race one which was a $7,500 claiming non-winners of three lifetime. After race day medications were administered, and shortly before the post, Mr. DiVito was told that Jimmy Got Even was scratched from the race by the stewards. Mr. DiVito received no credible explanation for the scratch. After returning to Chicago, Mr. DiVito had his attorney write a letter to the Indiana Horse Racing Commission (IHRC) requesting an explanation. In this May 26, 2011 letter, attorney Arthur Engelland stated, “My client is unaware of any valid reason to scratch this horse prior to post.” He also mentioned that his client incurred $1,000 of costs associated with his round-trip to Indiana Downs.
A scratch is defined by 71 IAC 7.5-2-2(a) for thoroughbreds and quarter horses as “A scratch is the act of withdrawing an entered horse from a contest after the closing of entries.” As with any racing jurisdiction, the Indiana stewards have the statutory authority to scratch horses from a race if a horse is ineligible to run. But, what made Jimmy Got Even ineligible to run?
Almost two months after Mr. Engelland’s inquiry, IHRC Executive Director Joe Gorajec responded with his own letter dated July 18, 2011. The letter states, “I have learned that Mr. DiVito’s horse was mistakenly scratched on May 25, 2011. My review of the incident in question revealed there was a ‘mix up’ in communications.” To add insult to injury, Mr. Gorajec stated, “The Indiana Horse Racing Commission does not reimburse license fees or any expenses when a horse is scratched, regardless of the reason nor, as advised by commission staff counsel, is it legally required to do so.” This letter was closed with, “I hope this unfortunate incident will not detract from Mr. DiVito’s participation in any future races in Indiana.”
Our review of the incident in question revealed that the “mix up” was that a horse named Even Wilder was supposed to be scratched from the race at the request of his trainer. Yet, Jimmy Got Even was scratched in error instead. Having the word “even” in the name obviously created some confusion. In reviewing the official race chart, where the field was scratched down to five horses, Even Wilder listed as a trainer scratch with Jimmy Got Even listed as a steward scratch. According to 71 IAC 7.5-2-2(d), “No horse may be scratched from an overnight race without approval of the stewards.” The net result was that this mistake cost the owner $1,000 and denied him the opportunity to earn a portion of the $11,200 purse.
So, can a scratched horse be ‘unscratched,’ to coin a phrase? Indiana’s standardbred rule book has a pretty specific answer to this question with:
71 IAC 7-1-27 Scratch irrevocable
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 27. A scratch of a horse out of a race is irrevocable. (Indiana Horse Racing Commission; 71 IAC 7-1-27; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1155; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31a.m.: 20070404-IR-071070030RFA)
In searching the flat racing breeds rule book, there isn’t a similar rule. Of course, there are many rules that if violated requires your horse be scratched from a race. Yet, there is no specific rule that allows for a horse scratched erroneously to be reinstated to the field.
Fast forward just a mere two days later to race 11 at Indiana Downs for another apparent “mix up” with a scratched horse. A quarter horse named Dancing With Ducks, co-owned by the Quarter Horse Racing Association of Indiana’s Executive Director, Michelle Collins, was listed as a scratch by Equibase just after noon on May 27th. Now, imagine being alive in a pick three or a daily double going into race 11 only to see Dancing With Ducks jogging down the track in the post parade! While Equibase listed Dancing With Ducks as a veterinary scratch at 12:16 PM another entry at 6:29 PM states, "Will Run (Previously Reported as scratched)." Allowing this horse to run in the race, after being scratched, is the complete opposite of what happen to Jimmy Got Even two days earlier.
So, where is the integrity in the decision to ‘unscratch’ a horse? We actually have copies of handicapping products for race 11 on May 27th at Indiana Downs that do not include Dancing With Ducks as a participant in the race. Yet, Dancing With Ducks did run in the race which had a purse of $23,000. Why wasn’t the wagering public protected?
From these two scenarios, we would hope that decisions in Indiana are not made based upon who owned a horse and are made based upon stated rules. However, if the stewards were correcting an error in the May 27th race, they defrauded portions of the wagering public. The integrity of the sport requires a very high ethical standard so that the wagering public has confidence in the product. Reinstating this scratched horse was simply disrespectful to the wagering public. It was also inconsistent with what happened on May 25th.
If the stewards can decide to correct an error with a scratched horse, then why wasn’t a correction done with Mr. DiVito’s horse two days earlier? Executive Director Joe Gorajec was made aware of both of these scenarios. In fact, an official complaint was filed regarding the reinstatement of Dancing With Ducks in the May 27th race. To date, the IHRC has chosen not to respond to the complaint so there is no official stance on this apparent double standard of a ‘mix up.’
One of IBOP’s key tenets is the Protection of Owner’s Rights. We recognize that mistakes can and will happen with information management at a race track. Given these two inconsistent examples, we also believe that there is a very simple way to maintain the integrity of wagering in Indiana while protecting an owner’s rights at the same time. The IHRC should adopt a change to the scratch rules to allow for horses erroneously scratched to be reinstated for purse money only. By eliminating such a ‘scratched’ horse from the pari-mutuel wagering, the wagering public is protected. At the same time, being able to run for the purse money protects an owner’s interests and their opportunity. Plus, this rule change would eliminate any appearance of impropriety as to who is involved with having decisions solely based upon a specific rule.
After being advised of these two examples, a responsive regulatory body would have recognized the need for such a rule change. A rule change of this nature would avoid these kinds of “mix ups” in the future.
A scratch is defined by 71 IAC 7.5-2-2(a) for thoroughbreds and quarter horses as “A scratch is the act of withdrawing an entered horse from a contest after the closing of entries.” As with any racing jurisdiction, the Indiana stewards have the statutory authority to scratch horses from a race if a horse is ineligible to run. But, what made Jimmy Got Even ineligible to run?
Almost two months after Mr. Engelland’s inquiry, IHRC Executive Director Joe Gorajec responded with his own letter dated July 18, 2011. The letter states, “I have learned that Mr. DiVito’s horse was mistakenly scratched on May 25, 2011. My review of the incident in question revealed there was a ‘mix up’ in communications.” To add insult to injury, Mr. Gorajec stated, “The Indiana Horse Racing Commission does not reimburse license fees or any expenses when a horse is scratched, regardless of the reason nor, as advised by commission staff counsel, is it legally required to do so.” This letter was closed with, “I hope this unfortunate incident will not detract from Mr. DiVito’s participation in any future races in Indiana.”
Our review of the incident in question revealed that the “mix up” was that a horse named Even Wilder was supposed to be scratched from the race at the request of his trainer. Yet, Jimmy Got Even was scratched in error instead. Having the word “even” in the name obviously created some confusion. In reviewing the official race chart, where the field was scratched down to five horses, Even Wilder listed as a trainer scratch with Jimmy Got Even listed as a steward scratch. According to 71 IAC 7.5-2-2(d), “No horse may be scratched from an overnight race without approval of the stewards.” The net result was that this mistake cost the owner $1,000 and denied him the opportunity to earn a portion of the $11,200 purse.
So, can a scratched horse be ‘unscratched,’ to coin a phrase? Indiana’s standardbred rule book has a pretty specific answer to this question with:
71 IAC 7-1-27 Scratch irrevocable
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 27. A scratch of a horse out of a race is irrevocable. (Indiana Horse Racing Commission; 71 IAC 7-1-27; emergency rule filed Feb 10, 1994, 9:20 a.m.: 17 IR 1155; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 23, 2007, 11:31a.m.: 20070404-IR-071070030RFA)
In searching the flat racing breeds rule book, there isn’t a similar rule. Of course, there are many rules that if violated requires your horse be scratched from a race. Yet, there is no specific rule that allows for a horse scratched erroneously to be reinstated to the field.
Fast forward just a mere two days later to race 11 at Indiana Downs for another apparent “mix up” with a scratched horse. A quarter horse named Dancing With Ducks, co-owned by the Quarter Horse Racing Association of Indiana’s Executive Director, Michelle Collins, was listed as a scratch by Equibase just after noon on May 27th. Now, imagine being alive in a pick three or a daily double going into race 11 only to see Dancing With Ducks jogging down the track in the post parade! While Equibase listed Dancing With Ducks as a veterinary scratch at 12:16 PM another entry at 6:29 PM states, "Will Run (Previously Reported as scratched)." Allowing this horse to run in the race, after being scratched, is the complete opposite of what happen to Jimmy Got Even two days earlier.
So, where is the integrity in the decision to ‘unscratch’ a horse? We actually have copies of handicapping products for race 11 on May 27th at Indiana Downs that do not include Dancing With Ducks as a participant in the race. Yet, Dancing With Ducks did run in the race which had a purse of $23,000. Why wasn’t the wagering public protected?
From these two scenarios, we would hope that decisions in Indiana are not made based upon who owned a horse and are made based upon stated rules. However, if the stewards were correcting an error in the May 27th race, they defrauded portions of the wagering public. The integrity of the sport requires a very high ethical standard so that the wagering public has confidence in the product. Reinstating this scratched horse was simply disrespectful to the wagering public. It was also inconsistent with what happened on May 25th.
If the stewards can decide to correct an error with a scratched horse, then why wasn’t a correction done with Mr. DiVito’s horse two days earlier? Executive Director Joe Gorajec was made aware of both of these scenarios. In fact, an official complaint was filed regarding the reinstatement of Dancing With Ducks in the May 27th race. To date, the IHRC has chosen not to respond to the complaint so there is no official stance on this apparent double standard of a ‘mix up.’
One of IBOP’s key tenets is the Protection of Owner’s Rights. We recognize that mistakes can and will happen with information management at a race track. Given these two inconsistent examples, we also believe that there is a very simple way to maintain the integrity of wagering in Indiana while protecting an owner’s rights at the same time. The IHRC should adopt a change to the scratch rules to allow for horses erroneously scratched to be reinstated for purse money only. By eliminating such a ‘scratched’ horse from the pari-mutuel wagering, the wagering public is protected. At the same time, being able to run for the purse money protects an owner’s interests and their opportunity. Plus, this rule change would eliminate any appearance of impropriety as to who is involved with having decisions solely based upon a specific rule.
After being advised of these two examples, a responsive regulatory body would have recognized the need for such a rule change. A rule change of this nature would avoid these kinds of “mix ups” in the future.
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