Administrative Rule of the Month - Indiana-Bred Preference

The following is a copy of a letter sent to the Indiana Horse Racing Commission (IHRC) regarding Indiana-bred preferred and Indiana-sired preferred thoroughbred races that were being run at Indiana Downs earlier this year. We are of the belief that these races should have provided an additional 40% to the first three finishers and that breeder and any stallion awards be calculated including the 40% purse supplement. As we expected, there is a lot of misinformation being spread about IBOP's involvement with this issue, so we've made Indiana-Bred Preference the IBOP Administrative Rule of the Month. We wanted everyone to see exactly what was said. This letter was emailed on May 13th,and as of this writing, we've received no response from the IHRC.


"According to information provided at the Thoroughbred Breed Development Advisory Committee meeting on November 7, 2011, the thoroughbred breed development program at Indiana Downs in 2011 exceeded the commission approved Indiana Thoroughbred Development Fund (ITDF) budget for the meet by $542,195. Clearly, the number of races supplemented from the ITDF in 2011 exceeded the commission approved number of races with 126 races run versus 120 races approved. However, the breeder and stallion awards from the 27 so-called 'non-ITDF' races (for Indiana-bred and Indiana-sired horses and funded solely from the horsemen's purse account with nothing from the ITDF) was responsible for over $250,000 of the $542,195 overage. In total, the commission approved 120 ITDF award eligible restricted overnight races and 153 award eligible restricted overnight races were actually run. This impacted the budget to a large degree reducing the available surplus in the ITDF well beyond what was approved for the 2011 program.

Last year's 'non-ITDF' races are essentially being replaced this year by what are being called Indiana-bred or Indiana-sired preferred races. These races are impacting the approved 2012 thoroughbred breed development budget, but these races also appear to be being written in violation of commission approved rules. The condition of these 'Indiana preferred' races is that they are actually 'open' for entry to horses bred in any state (Please see 71 IAC 1.5-1-24 copied below). A Kentucky-bred horse, a Florida-bred or an Indiana-bred can be entered into these 'Indiana preferred' races.

71 IAC 1.5-1-24 "Conditions" defined
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 24. "Conditions" means qualifications which determine a horse's eligibility to be entered in a race. (Indiana Horse Racing Commission; 71 IAC 1.5-1-24; emergency rule filed Jun 15, 1995, 5:00 p.m.: 18 IR 2817, 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)

However, while the condition of these 'Indiana preferred' races is 'open,' the caveat attached to these races as applied by Indiana Downs is "No 40% State Bred Supplement if race fills with all Indiana Breds." This raises two issues where commission approved administrative rules are not being applied. So far, this 'Indiana preference' has created fields that have been comprised of 100% of either Indiana-bred or Indiana-sired horses. Ironically, an Indiana-bred can enter this open condition race and be excluded from running by an Indiana-sired preference attached to the race by Indiana Downs. Yet, preference for Indiana-breds in open condition races is determined by 71 IAC 13.5-5-1, which is copied below, and not what the racing secretary decides the preference for Indiana-breds should be in open races. Zero-dates, R-dates (race), and E-dates (entry) determine preference and Indiana-breds (sireds included) only get preference in open condition races when their R-dates and E-dates are equal to a horse bred from another state, and Indiana-breds are never preferred over horses bred in others states with zero-dates. Plus, this commission approved rule doesn't provide for an Indiana-sired to ever have preference over an Indiana-bred in an open race.

71 IAC 13.5-5-1 Indiana bred preference
Authority: IC 4-31-3-9
Affected: IC 4-31
Sec. 1. (a) A registered Indiana bred that receives a [sic., an] R-date or an E-date will receive starter preference over a non-Indiana bred with an equal R-date or E-date. Such preference shall apply in all races not restricted to Indiana breds, stake races excepted. Indiana breds will not receive starter preference over non-Indiana breds with better R-dates, E-dates, or zero-dates.
(b) A registered Indiana bred that enters or races in an open race will retain their previous preference date when returning to a restricted Indiana bred race. (Indiana Horse Racing Commission; 71 IAC 13.5-5-1; emergency rule filed Jun 22, 2000, 3:05 p.m.:23 IR 2787; readopted filed Oct 30, 2001, 11:50 a.m.: 25 IR 899; readopted filed Mar 20, 2008, 2:33 p.m.: 20080416-IR-
071080064RFA; emergency rule filed Jul 19, 2010, 12:22 p.m.: 20100728-IR-071100480ERA)

Beyond the apparent violation of the commission approved Indiana-bred preference rule, these 'Indiana preferred' races are still open condition races, by commission definition, even if the entire field is comprised of Indiana-breds or Indiana-sireds. '71 IAC 13.5-3-5 Purse supplement in open races' provides for a 40% purse supplement to the owner of the horses finishing 1st, 2nd, and 3rd in open races. Plus, the breeder awards and any stallion awards for "open" races are calculated including the 40% open purse supplement as well. The fact that the racing secretary is saying "No 40% State Bred Supplement if race fills with all Indiana Breds" does not change the commission approved rule providing the 40% purse supplement in open races. For example, attached is the official Equibase race chart for one of these 'Indiana preferred' races run as Race 5 on April 17th. (Link to the chart is below.) Clearly, the additional 40% purse supplement has not been applied to the first three finishers. Clearly, this race is not labeled with the (S) to indicate a state-bred restricted race, which is understandable because the condition of the race was in fact an open race. By commission rule, this race should have had the 40% purse supplement added. IBOP's contention is also that the 40% purse supplement should be paid with a corresponding increase in breeder and stallion awards based upon current IHRC rules.

So far, there have been six 'Indiana preferred' races run (Races 5 & 7 on April 17th, Race 3 on April 18th, Race 6 on April 23rd, Race 1 on May 4th, and Race 7 on May 5th) with a current cost to the breed development fund for the breeder awards and stallion awards of $54,400. In our review of the thoroughbred breed development program submitted to and approved by the commission, there was no budget item for these races. Considering that the 40% open purse supplements which are required by commission rules, the dollar amount of the awards should be 40% higher at $76,160. Again, this expenditure was not a budgeted item in approved program. Considering that the budget was exceeded by $542,195 at Indiana Downs in 2011, we are concerned for the integrity of this year's budget. The pace at which Indiana-bred races are being run, plus these 'Indiana preferred' races is on track for similar results to 2011. Continually exceeding the budget, and reducing the surplus beyond what has been approved by the commission, will have profound effects on the thoroughbred program in the future.

With that said, having more Indiana-bred and Indiana-sired races is a great benefit to those participating in the program and encourages more economic benefit for the State of Indiana. Clearly, there is significant demand for Indiana-bred and Indiana-sired races to the extent that, in this example, Indiana Downs is going beyond commission rules to add more races for Indiana-breds. IBOP's concern is that how this is being done currently is harmful to the ITDF, and therefore, harmful to the future of the program. IBOP would encourage the commission to make sure that the established rules on the books are followed, but at the same time revisit the 2012 thoroughbred breed development program, including the contribution from the horsemen's purse trust account toward the Indiana-bred program. Having more Indiana-bred races, in our estimation, will help support and encourage the breeding of quality race horses in Indiana. Yet, the expansion of Indiana-bred races needs to be done in a more fiscally responsible and transparent way where the ITDF is concerned.

Thank you,

Jim Hartman
IBOP Vice President


CC: Chairman McNaught
Commissioner Lauck
Commissioner Schaefer
Commissioner Grimes
Commissioner Barclay"

Link to the April 17th, Race 5 Equibase chart: http://www.equibase.com/premium/eqbPDFChartPlus.cfm?RACE=5&BorP=P&TID=IND&CTRY=USA&DT=04/17/2012&DAY=D&STYLE=EQB