The Thoroughbred Brief

Appealing

June 2, 2009 · Leave a Comment

Patrick Biancone’s vet, Rodney Stewart, who was suspended by the KHRC for 5 years for, among other things, possession of cobra venom at Keeneland, has filed an appeal with the Franklin County Circuit Court. Stewart argues that the Commission’s decision was “not supported by substantial evidence, is arbitrary and capricious and/or an abuse of discretion.”

The Thoroughbred Brief, now the Thoroughbred Brief, JD, will actually be a judicial clerk at the Franklin County Circuit Court starting August 1, so hopefully I will have a front-row seat for the oral arguments.

Also, I have some comments on Kentucky House Bill 472, which makes substantial changes to the current horse racing statute. Many of these changes directly respond to the allegations of Stewart. Others vest greater authority in the KHRC, widening the scope of its jurisdiction. It’s all very interesting, and hopefully I will get a chance to write about some of the changes soon.

→ Leave a CommentCategories: Uncategorized

New Blog: Gaming Law Update

April 28, 2009 · Leave a Comment

Since the Thoroughbred Brief continues its extended hiatus due to the fact that I’m finishing my third and final year of law school, I’m happy to be able to direct attention to a new blog that also hits on legal aspects of racing.

Gaming Law Update, written by gaming attorney (and Thoroughbred Brief guest blogger) John Lockwood, is a parimutuel and gaming law blog that covers various issues in the parimutuel and gaming industry. These issues are crucial to determining the future of the racing industry, and Lockwood has the experience and first-hand knowledge to present them clearly and compellingly. Additionally, the Gaming Law Update provides links to all gaming and parimutuel commissions and industry associations, making it a much needed central hub when trying to access information by jurisdiction. In other words, check it out.

Hopefully I will be able to return to updating soon. In the meantime, I have officially declared the week after I finish exams to be “Arlo Week,” so if you’re really, really, incredibly bored, feel free to check out a website entirely centered around my goofy horse. There are even Derby picks, although they need to be updated, since Quality Road is out.

Also, you can now follow the Thoroughbred Brief on Twitter. Which is not to say that I have anything interesting to say, but there you have it.

→ Leave a CommentCategories: Gaming
Tagged: , ,

Guest Editorial – The Prospect of Instant Racing Machines in Kentucky

April 20, 2009 · 2 Comments

John M. Lockwood, Esq. is an attorney affiliated with Rutledge, Ecenia, & Purnell, P.A. in Tallahassee, Florida. He concentrates his practice primarily on advising clients on laws and regulations affecting the pari-mutuel, cardroom, and slot machine wagering industry. He can be reached at jlockwood@reuphlaw.com.

On April 16, 2009, Kentucky State Senator Damon Thayer requested the opinion of Kentucky Attorney General Jack Conway concerning the legality of operating Instant Racing machines in Kentucky to assist the horse industry.

Instant Racing machines utilize recorded pari-mutuel events, currently greyhound and thoroughbred races, upon which patrons place wagers through a terminal that is virtually identical to a self-service wagering terminal. The machine uses a random number generator to select races from a grouping of stored pari-mutuel races located in a main server. The patron inserts money and makes a selection of potential finishers, just like making a bet on a live race, based upon certain handicapping data that is provided via performance charts. The patron is not provided information concerning the race venue, date of race, name of horse or dog, or the jockey or trainer if applicable. Once the patron submits the wager via the terminal, the race is shown and the result is displayed. Payouts are determined by the wagers contributed to the pari-mutuel wagering pools.

Instant Racing machines have been successful at Oaklawn Park in Hot Springs, Arkansas where such machines have helped boost purses and attract larger fields. Unfortunately, Instant Racing machines have not garnered a significant following outside of the state. In 2006, the Wyoming Supreme Court declared that Instant Racing machines were illegal slot machines that “attempted” to mimic traditional pari-mutuel wagering. In Oregon, an administrative law judge ruled that Instant Racing machines were pari-mutuel devices and could be installed at Portland Meadows. This decision was subsequently overturned by the Oregon Racing Commission and is currently being reviewed by the Oregon Court of Appeals. In addition, the Maryland Attorney General issued an opinion stating that Instant Racing machines were not permitted in Maryland because they did not constitute pari-mutuel wagering devices. However, the Alabama Attorney General has twice opined that Instant Racing machines were pari-mutuel devices that could lawfully be operated at state greyhound tracks.

So what does this mean for Kentucky and its horse racing industry? The Kentucky Attorney General will likely be faced with a delicate legal analysis focusing upon a comparison of traditional pari-mutuel wagering and slot machine devices. Based upon the Alabama opinions, there is precedent to conclude that such devices are, in fact, pari-mutuel wagering devices that may be operated just like self-service totalisator terminals. Of course, the state legislature could always allow the Kentucky Horse Racing Commission to authorize and regulate Instant Racing machines if the Attorney General concludes that such devices are not presently authorized pursuant to existing pari-mutuel wagering laws.

Wyoming Supreme Court opinion

Maryland AG Opinion

First Alabama Opinion

Second Alabama Opinion

The final order of the Oregon Racing Commission is on file with the author and the Thoroughbred Brief.

→ 2 CommentsCategories: Gaming
Tagged: , ,

Redux

April 8, 2009 · 1 Comment

Joe Drape reports that the New York Racing and Wagering Board is investigating Ernie Paragallo, who is licensed by the Board as an authorized agent, for his alleged mistreatment of the horses at his Center Brook Farm.

If the Racing and Wagering Board wants an example of a state racing commission exercising its jurisdiction over licensees to issue sanctions for animal cruelty on a private farm, the KHRC addressed a similar case last year. The KHRC ended up suspending Joseph Crescini’s license for 2 years, but the case is currently being appealed.

For a thorough discussion of the Crescini case, I direct you to one of my previous entries: Regulators (handy with the steel).

→ 1 CommentCategories: Headlines · state racing commissions
Tagged: , , ,

Hiatus

March 22, 2009 · Leave a Comment

The Thoroughbred Brief is on hiatus due to my law school workload.

→ Leave a CommentCategories: Uncategorized

Beyond the Press Release: Comments on Churchill’s Sweeping Safety Measures

March 2, 2009 · 2 Comments

Based on historical records, we believe there has only been one catastrophic injury among the 1,710 horses that have competed during the 134 runnings of the Kentucky Derby, but even one is too many. -  Bob Evans, president and chief executive officer of Churchill Downs Incorporated.

For those who have followed this site to any extent, it should be clear that I have a particular interest in racetrack “house rules,” a supplementary form of regulation implemented by private racetracks.

So when I received Churchill’s press release this morning detailing the new safety measures to be implemented at all CDI tracks by 2001 and at Churchill itself by the first Saturday in May, I was pretty interested (and also admittedly thrilled at receiving a press release from Churchill, regardless of why I might have received it).

These new safety measures, known as “Safety from Start to Finish,” are described in the release as including “unprecedented standardized
third-party testing of track surfaces and comprehensive testing of all winning horses for more than 100 prohibited drugs.”

Here’s Churchill’s list of these sweeping safety measures, which will be in place at Churchill Downs by Derby day (the reason I listed some of them in bold is explained below):

Independent, standardized third-party testing and monitoring of track surfaces;
“Supertesting” of all winning horses for more than 100 performance-enhancing drugs;
Age restrictions requiring Thoroughbreds to be at least 24 calendar months of age before becoming eligible to race;
The freezing and storage of equine blood and urine samples to allow for retrospective testing;
• The banning of steroids;
Limits on the number of horses allowed to compete in certain races;
• The prohibition of “milkshaking”, which results in excessive levels of total carbon dioxide in Thoroughbred racehorses;
Prohibiting the transport of horses from CDI facilities for slaughter;
• The banning of unsafe horseshoes, including front shoe toe grabs longer than two millimeters;
• The use of low-impact riding whips with limited usage rules;
• The presence of on-site medical personnel, equipment, and state-of-the-art equine ambulances;
• Immediate online access to jockey medical histories for emergency medical personnel;
• $1 million in catastrophic injury insurance coverage for jockeys;
• Mandatory and uniform reporting of equine injuries to the Equine Injury Database System, thereby assisting in the compilation of statistics and trends to improve safety conditions around the country;
• A professionally designed and installed safety rail on the inside of the dirt course;
• Mandatory usage by all jockeys, exercise riders and other on-track personnel of safety vests and safety helmets that meet internationally acknowledged quality standards;
• 3/8-inch foam padding on all parts of the starting gates;
• Significant financial support for equine retirement programs;
• Inspection of all horses by regulatory veterinarians prior to and following all races;
• Review of security procedures around barns and other racetrack backstretch areas;
• Continued maintenance of protocols for the treatment of horses that have been injured during racing or training, to ensure the most humane treatment possible; and
• Mandatory, independent, and complete necropsies of any horse that dies as a result of an injury sustained while racing or training at Churchill Downs.

If many of these regulations sound familiar, then you’ve either read my most recent post, or, like me, have printed out your own copy of the NTRA’s Safety and Integrity Alliance pledge and its initiatives (although that might just be me). By my glancing review, most of the Safety from Start to Finish initiatives comport with the Alliance initiatives. It looks like, as Alex Waldrop mentioned to my equine law class, Churchill will certainly be qualified for the accreditation program this year.

Also by my glancing review (if you see a mistake, feel free to tell me), those rules in bold are areas where Churchill has gone above and beyond the NTRA mandates. My comments are as follows:

First, CDI is joining Suffolk Downs, the Magna tracks, and others in banning the transfer of horses from CDI tracks for slaughter. It will be interesting to see whether this applies to direct or indirect participation in the slaughter chain, and what sanctions CDI intends to apply.

Second, while the number of horses in races will be limited, this rule does not apply to the Kentucky Derby field, which will remain at 20 horses.

Third, the “supertesting program” and the freezing and storage of samples are huge steps in bringing drug testing into the 21st century. One thought I have is that, while I’m glad that all winners will be subject to the supertesting program, I think random testing would further supplement this goal – if the results were reported.

Fourth, the age-limit rule, requiring that horses actually be 2 years old to race, rather than just “Thoroughbred” 2 years old. I’m not sure exactly how many Thoroughbreds this will affect – most are born so early in the year that they will be 24 months of age before they start (although they will probably be in training before that). But I’m not sure that anyone could argue that keeping a horse from subjecting its growing bones to the pounding rigors of a race at least until they’re 2 is a bad plan.

Lastly, the initiative that interests me the most – “Independent, standardized third-party testing and monitoring of track surfaces.” The press release expands on this:

CDI is expanding its existing testing of track surfaces to implement regular, standardized, third-party testing of its racetracks, including a battery of laboratory tests of track surfaces and ground-penetrating radar to ensure track consistency and integrity. CDI has secured the services of the world’s top track surface researcher, Dr. Mick Peterson, a University of Maine professor of mechanical engineering who has developed an innovative robotic hoof device that duplicates the force and speed of a horse as it runs on a racetrack. Data generated by these and other tests will help to ensure that CDI tracks maintain safe and consistent track surfaces for both horses and jockeys. The Company is also a founding member of and financial contributor to the new Racing Surfaces Testing Laboratory, which is identifying safe practices for the future by facilitating and advocating measurements of track safety effectiveness.

This plan, perhaps above all else, is what Churchill Downs can point to on Derby day when the public asks, “What about Eight Belles?” And it’s a heck of a lot to point to – ground-penetrating radar? Check. An innovative robotic hoof device that mimics the hoof of a running horse? Check. A new testing lab for racing surfaces? Check.

Additionally, according to Jim Gates, general manager of Churchill Downs and the leader of Safety from Start to Finish, “[w]e also have recognized that we need to do a better job of communicating to our fans and the general public what our industry has done and is doing to maximize safety. To that end, we have created an interactive, educational ‘Safety Center’ that is currently on display at Churchill Downs’ Gate 17. The Center utilizes audio, video and actual material and equipment samples to educate racetrack guests about the numerous policies and procedures in place to ensure the safety, security and well-being of horses, riders, and on-track personnel.

All of the initiatives listed above are laudable.

But in a time when bolstering the public image of racing is perhaps more vital than ever, the surface safety initiative and the interactive “Safety Center,” focused as they are on that “one catastrophic injury among the 1,700 horses that have competed during the 134 runnings of the Kentucky Derby,” – focused on Eight Belles -  might just be the most important to the sport.

More information about the Safety from Start to Finish program can be found here.

→ 2 CommentsCategories: House rules
Tagged: , , , , , ,

The $600,000 question

February 12, 2009 · 10 Comments

Alex Waldrop, former President of Churchill Downs, current CEO of NTRA, and a graduate of UK Law, visited my equine law seminar yesterday to chat with us about legal issues in racing. Mr. Waldrop was very straight-forward, and answered questions candidly; it was an informative and interesting talk.

He started off by noting that the primary purpose of the NTRA is economic, which, quite frankly, surprised me – I guess I expected him to say it was marketing, but it makes sense. He discussed the legislative efforts of the NTRA, and the growth of its PAC from a gaming lobby that was mostly ignored to the prominent and influential PAC that it is today. He also discussed the NTRA’s purchasing program, NTRA Advantage, which is broader than I realized, and involves up to 30 breeds and various disciplines – it’s even the basis for the USEF’s member benefits.

The talk was generally geared toward an overall picture of what the NTRA does, but Mr. Waldrop did address the Racing Integrity and Safety initiatives, as well as the public outcry following Eight Belles’s breakdown. He mentioned, for example, that he did not anticipate the over 800 comments he received in response to his blog entry on the filly.

We were also given the opportunity to ask some questions. Originally I was going to ask him to give his best argument against federal intervention in / oversight of the industry, but during his talk he, in passing, mentioned that federal regulation is not appropriate for an industry that involves so many local issues. This is a rationale that’s hard to argue with – it’s supported by enough legal precedent that you could cite it all day, stressing the significant interest that a state has in preserving the integrity of horse racing, because gambling implicates the “health, welfare, safety, and morals” of the public.

Being naturally contrary, I actually do argue against this “local issue” notion (vox clamantis in deserto though I might be), based on (1) the degree to which certain, integral, issues are already federally regulated, via criminal statutes, (2) the fact that even the NTRA advocates national rules and has even influenced the imposition of the ban of anabolic steroids in all racing jurisdictions, (3) the argument that a state’s police power is based on the safety/moral implications of gambling wears thin as states introduce slot machines at tracks, lotteries, etc. to garner greater revenue, and (4) sometimes important issues are overwhelmed by local agendas when regulated on a local level.

But back to the Safety and Integrity Alliance …

One point that Mr. Waldrop made was that, when he served on the board of a hospital, he noticed how everyone jumped to their feet when the Joint Commission came through to do their accreditation process. I have some personal experience with this – my mom is the head of quality assurance at a home health agency, and they also get reviewed by the Joint Commission. It is a Big Deal, involving months of preparation, because, even though it’s a private commission, and not a part of state or federal regulation, Joint Commission accreditation will make or break a health care organization.

And that was the idea that Waldrop brought to the certification / accreditation process that’s built into the Safety and Integrity Alliance Pledge. The accreditation aspect of the Pledge is the carrot of the self-regulatory initiative, with the stick presumably being something like a lack of accreditation or a probationary status, or the AGSC withholding graded status for tracks that aren’t accredited, or the NTRA or other organizations withholding funding.

When it came time to ask questions, I mentioned that the first phase of implementing reforms in the Pledge, in addition to accreditation, was the creation of house rules at all the race tracks, and pointed out several sections in the pledge that referred to funding, including a provision that says the tracks and the horsemen are to agree on how to split new regulatory costs. My specific question was, “So … how’s that going?”

Mr. Waldrop laughed and said I’d asked the $600,000 question, but I think it’s the question mark in everyone’s mind right now. It’s easy to mandate changes, but whether tracks and racing associations can pay for those changes is a completely different matter. Acknowledging that funding is a problem, Mr. Waldrop made a couple of interesting comments.

He said that the accreditation process would begin with steps that were not going to be as costly to tracks. For example, it won’t cost the tracks anything (but possibly reputation) for the Jockey Club to release injury statistics for that track. Establishing connections between tracks and Thoroughbred retirement organizations, and requiring a certain level of track maintenance were other areas that wouldn’t involve significant additional funding by tracks. All three of these areas could contribute to improving the public image of racing and the public’s experience at the track.

As we were discussing various levels of accreditation, my professor, equine and gaming attorney Laura D’Angelo, suggested that a track that received a probationary accreditation could possibly use that status to lobby its racing commission for additional funding. Not a bad idea.

There’s no deus ex machina that’s going to drop in and fix the industry. Even if federal regulation were the right answer, the likelihood that Thoroughbred racing rates very high on the government’s agenda right now is pretty low. And to the extent that racing is going to fix itself, it will require creative, almost extra-legal solutions, to compel changes. I think the NTRA is headed in the right direction.

→ 10 CommentsCategories: Federal regulation of racing · Safety and Integrity Alliance · state racing commissions
Tagged: , , , ,

Women & Horses Seminar

February 5, 2009 · 3 Comments

The Kentucky Horse Park is offering what looks to be a great seminar on Febrary 21st – Women & Horses: Dreams to Profit

The keynote speaker will be Maggie Moss, Thoroughbred owner and attorney, and Laura D’Angelo, a pre-eminent equine law attorney in Lexington, will also be speaking. Needless to say, I will be in attendance.

The full press release is below, and a link to the registration form is here:

A number of successful business women will offer great advice on making your equine business or organization more profitable. Let’s face it – in this economy, we’re all looking for ways to keep our horses fed and our businesses going, so the KHP is pleased to make this seminar available to assist.

An entire list of presenters will be announced shortly, but will include keynote speaker Maggie Moss (the Thoroughbred Owners and Breeders “2006 Owner of the Year,” successful attorney in Des Moines, Iowa, and notable equine advocate who launched the Midwest Retirement Foundation for retired racehorses), Laura D’Angelo (attorney with Wyatt, Tarrant & Combs – specializes in equine law, pari-mutuel & gaming laws, stallion syndications), Sandy Hatfield (stallion manager at Three Chimneys – home of Kentucky Derby winners Silver Charm, Smarty Jones and Big Brown), Sarah Lane (Senior Director Creative Communications for the United States Equestrian Federation), Becky McManus (Executive Director of Leg Up Therapeutic Riding Center, and 40 years of experience in organized equestrian activities)and Colleen Pace (President of the American Association of Riding Schools, a national business support program for novice level riding schools, and the owner of Riverbank Farm in Michigan)

The cost is $75 (including lunch) if registered before Feb 11 (after Feb 11, the cost is still $75 but no lunch included). Group rate (5 or more) $67.50. Vendor tables $25. Sponsorship opportunities are also available.

9:00 am – 4:00 pm
Location: South Theater
For more information, contact Nicole Rivera at 859-259-4219.

→ 3 CommentsCategories: Uncategorized
Tagged: ,

House Edge

January 18, 2009 · 1 Comment

Last October, the NTRA released its manifold initiatives for industry reform, sparking a considerable amount of commentary as to whether these initiatives would be implemented and enforced on a uniform and national basis. The NTRA provided a very logical three-phase implementation program, but the first phase, as with every first step, could prove to be a little sticky.

The initiatives include broad improvements to the current drug testing scheme, including requiring out-of-competition testing for blood dopers like EPO. But Phase I of the program puts the onus of this new testing program on the racetracks themselves. Last fall we learned that the American Graded Stakes Committee, for example, is more than willing to use its clout to mandate certain changes at tracks, so as long as the industry is behind the move to Phase I, it seems the tracks will have no choice but to implement it. But do racetracks really have the authority to regulate prohibited substances at a standard over and above that of the state racing commission?

Racetracks do have ways to enforce their own rules, some of which are even recognized by states’ racing statutes. For instance, racetracks have a common law right to exclude patrons, typically because patrons are unruly or have participated in something illegal. A lot of states, like Kentucky, expressly provide in their statutes that this common law right is not abrogated by the racing commission’s own right to exclude. Tracks also have contract rights, governed by the common law of contracts, built into things like stall applications and entry forms. In other words, trainers and owners that want to race agree to play by the rules when they sign the bottom line.

A serious question arises, however, when a track applies its rights to individuals who are licensed by the state: does the track have the right to take away the licensee’s property right in training? And if a track does exercise that right, is the track, in effect, a state actor, violating Constitutionally-protected Due Process rights? And even if the track is determined to be a private actor, there are still questions of whether it would be violating anti-trust laws, or simply subjecting itself to tort liability.

The Red Mile, which began its own out-of-competition EPO testing initiative last fall, has provided a case study in what can go wrong when a racetrack implements a testing program outside of a racing commission’s authority. According to Janet Patton of the Herald Leader, the Red Mile received “presumptive positives” for the horses of four trainers, but there was some kind of miscommunication between the testing lab and the Red Mile. The Red Mile informed the trainers of the positives, and despite efforts to keep the results confidential, the names leaked out. Meanwhile, the trainers requested that the split samples be sent to a different lab – at their own expense – and those results returned negative for blood doping. The trainers are now suing the Red Mile for defamation.

Here’s where it gets tricky. The trainers allege that the track failed to follow KHRC testing protocol, which is odd, considering that the testing was done outside of any KHRC regulation. Even trickier is the fact that the blood samples were drawn by state vets. Which is the exact muddy situation that brings state action into question, regardless of whether the final results were positive or negative.

The Red Mile incident ended with four false positives and a defamation claim – no antitrust allegations, no due process claims. And the false positives and leaked names are the result of bureaucratic details that need smoothing out. The trainers’ attorney claims that all the trainers really want from the track is reimbursement for the testing costs and a public apology. What’s notable is that the trainers are not questioning the right of the track to do out-of-competition EPO testing on their horses. And so, despite the less-than-ideal result, I would argue that this is actually a case of house rules working. The trainers signed an agreement along with their stall contracts, and their agreement to be bound by the track’s rules stuck.

At the end of the day, the house may not always win; but with the right procedures in place, it can maintain an edge, an edge that might allow it to confront new regulatory challenges faster than racing commissions, with their lack of funding and excess of red tape, are able.

→ 1 CommentCategories: Drug testing · House rules · state racing commissions
Tagged: , , , , , , ,

Skate Boards and Freeway Ramps

January 9, 2009 · 2 Comments

I’ve written before about Ned Bonnie’s excellent article on the ill-fated Corrupt Horse Racing Practices Act, and mentioned it again in my last post, but I just found a copy of it online and thought I’d provide a link:

Edward S. Bonnie, Corrupt Horse Racing Practices Act of 1980: A Threat to State Control of Racing, 70 KY.L.J. 1159 (1982).

I recommend reading it if you have any interest in racing regulation, because the depth of research is superb, and an understanding of the history of federal intervention is essential to structuring regulation prospectively.

An interesting thing to note is that bute and lasix were both legalized with a view to enabling horses to race more often and keep them in racing longer. Regardless of whether or not these two substances serve therapeutic purposes that are ultimately for the good of racing, perhaps focusing on whether they have achieved the purpose that initially justified their use should be the major factor in determining whether they should have a place in a more regulated industry.

Also, don’t forget to vote on the Thoroughbred Bloggers Alliance photo contest entries. First round voting is open until January 11th, so go vote on your favorites!

→ 2 CommentsCategories: Uncategorized