It’s that time of year - to look back on the last 12 months, on the substantial progress and the serious missteps - the Good, the Bad and the Ugly - of the U.S. regulatory world.
THE GOOD
Equine fatal injuries decline for the fourth consecutive year
On March 10, the Jockey Club provided its annual accounting from the Equine Injury Database (EID). In addition to four straight years of decline, data from 2016 shows a 23 percent decline in fatalities since 2009, the first-year annual statistics were published.
The EID is one of the few successful initiatives of the racing industry that is national in both scope and participation. Owners, breeders, trainers, veterinarians, race tracks, and fans benefit from all the efforts expended by regulators and others to optimally minimize equine fatalities. The primary beneficiaries, of course, are the horses.
New IRS withholding rules could put a billion dollars in horseplayers’ pockets
It is not often, if ever, that horseplayers have any reason to applaud a decision of the Internal Revenue Service (IRS). On September 25, however, the U.S. Treasury Department announced a proposal to amend an IRS rule that will redefine the amount of a winning wager for tax withholding purposes. No longer will the withholding be based on the winning bet, but instead all wagers made into a given pool. This change could result in a decrease the number of winning wagers that require tax withholding at the track by 90 percent or more.
The applause should not be limited for the IRS. The National Thoroughbred Racing Association (NTRA) and its CEO and President, Alex Waldrop, deserve a standing ovation for its relentless pursuit of this landmark decision.
The Horse Racing Integrity Act co-sponsorship hits 100
Although still quite some distance from the finish line, federal legislation to bring an independent, integrity-based structure to racing’s anti-doping program gained traction in 2017. On November 1, the Coalition for Horse Racing Integrity announced that the Horse Racing Integrity Act of 2017 had the support of 100 members of the U.S. House of Representatives.
The legislation was also buoyed this year by the support of the Stronach Group. The bill now has the support of two of the three Triple Crown race tracks – Pimlico and Belmont, with Churchill Downs the outlier.
THE BAD
California takes over five years to implement third-party Salix
The California Horse Racing Board (CHRB) provided the racing industry with yet another example of how regulators who lack independence can ill-serve the sport. The CHRB began its process of approving third-party Salix in January, 2012, and the rule wasn’t approved until July, 2017. The racing industry has been trying to pass a third-party Salix national model rule on a state-by-state basis. This rule limits the opportunities for practicing veterinarians to administer illegal substances on race day.
The primary reason for this delay was the board members themselves. The CHRB has politically appointed members who own and breed racehorses. These members actively participate in the state’s racing program. When confronted with a decision in 2015 to either support the model rule or submit to the self-serving interest of their veterinarians and trainers, they chose the latter.
The board made this decision despite a recommendation from its own medication committee and its equine medical director.
Only when confronted with widespread national condemnation and ridicule did they have a change of heart. See Taking My Money Elsewhere: California Gets It Wrong on Lasix (Paulick Report, August 2015).
Thumbs up to the integrity-minded board staff and two thumbs down to self-serving, conflicted board members.
THE UGLY
Pennsylvania, Pennsylvania and Pennsylvania
Racing’s drug culture, cheating and hypocrisy were all on display at the June trial of trainer Murray Rojas. The trial was the culmination of a lengthy investigation by the United States Attorney for the Middle District of Pennsylvania of illegal practices at Penn National Race Track.
By the conclusion of the trial, and the conviction of Ms. Rojas, prosecutors had demonstrated that illegal race-day drugs had been routinely administered to horses on race day for years, if not decades.
The widespread nature of this cheating was best expressed by Stephanie Beattie, a former three-time leading trainer at Penn National.
According to a June 28 Paulick Report article, Ms. Rojas, testifying for the prosecution said, “Almost everybody did. Ninety-five to 98 percent. It was a known practice. We wanted to win, and they weren’t testing for those drugs at the time.”
The conviction reinforced the perception in the minds of many racing fans that the culture of cheating is a routine business practice. The horsemen only add to this perception by coming to the defense of soon-to-be-convicted Murray Rojas.
The Horsemen’s Benevolent and Protective Association (HBPA), which is the largest association of owners and trainers in the U.S., established a legal defense fund that assisted Ms. Rojas. The fund received contributions from various state HBPA affiliates across the country.
Barry Irwin articulated the feelings of many in his comment on the Paulick Report regarding the legal defense fund. Mr. Irwin, owner of Team Valor and a leader in the campaign for clean racing, wrote, “It is reprehensible what the HBPA did and it sends the wrong message. They have been completely tone deaf on the use of drugs, both legal and illegal, for years. The leadership should hang their heads in shame over this sordid affair.”
In addition to Ms. Rojas, four practicing veterinarians pleaded guilty to the illegal race day practice. All are awaiting sentencing.
The 2017 Ugliest Regulation Award goes to the Pennsylvania Horse Racing Industry. This year’s trophy is called the Tarnished Thimble. Pennsylvania can use it to store all the goodwill they have earned from decent hard-working horsemen and fans.
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Joe Gorajec has spent his entire adult life in the racing industry and served as the executive director of the Indiana Horse Racing Commission for 25 years (1990-2015). He is also a former chairman of the North American regulators’ trade association, the Association of Racing Commissioners International (2008). Now semi-retired, he spends his time consulting, writing and gardening at his central Indiana home.