Day At The Track

Opposition to interstate racing & wagering

11:18 PM 23 Jun 2010 NZST
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On behalf of thousands of harness horsemen and racing industry stakeholders throughout New York State, we are writing to express our strong opposition to S3022-A, a bill that would create a new Interstate Racing and Wagering Compact with the power to regulate significant aspects of New York racing without the need for legislative or industry advice or intervention.

This bill would cede and vest significant regulatory control over New York's critically important racing industry to a new multistate entity with no duty to protect the well-being and specific interests of New York's horsemen, breeders or racetracks.

The proposed Interstate Racing and Wagering Compact raises far more questions and concerns than it answers, and most critically, does not indicate what "problem" this legislation seeks to "fix."

Even more significantly, this hastily amended legislative introduction - which will have huge, long-term impacts for decades to come on a multi-billion dollar industry that employs 40,000 New Yorkers - has been introduced in the waning moments of the legislative session with absolutely no substantive opportunity for the industry or the public to weigh in and without any public hearings.

Legislation of this magnitude should, at the very least, be the subject of public hearings across New York State before it is even considered by the Legislature.

The fact of the matter is that New York State is a nationally acknowledged leader in the regulation of horse racing, and this move to cede and vest regulatory powers to states with lesser commitments to the health, safety and economic strength of racing could potentially have disastrous effects on our own strongly protected industry, pulling New York into a hugely problematic "race to the bottom" in terms of regulation.

Furthermore, by shifting much of this decision making power out of New York State and into the hands of a new entity, the compact would even potentially remove New York State legislators from their long established legislative role in overseeing and regulating racing.

For example, a number of issues currently being discussed and negotiated by the New York State Assembly and Senate - from the role of equine dentists in horse care to critically important ethical safeguards that prevent owners from racing at their own tracks - could very well become the subject of Compact regulations, thereby completely eliminating legislative input and oversight completely. This simply makes no sense for New York State and its interests.

At best, S3022-A would create an additional, unnecessary level of regulation that duplicates functions now being accomplished by the individual state racing commissions and the Racing Commissioners International (RCI) - including licensing, rulemaking, adjudication and investigation - all at a potentially greater cost and with far fewer safeguards for New York racing stakeholders. At worst, this entity becomes a regulatory runaway freight train, with New Yorkers being bound by the interests and needs of competing states with far fewer protections for their racing industries.

Just consider some of the unanswered questions and concerns posed by S3022-A: Is it possible that the Compact's establishment could negate the need for a New York State Racing & Wagering Board altogether? This is certainly a concern if licensing, investigatory, rule making and adjudicatory functions are to be performed by the Compact.

Rule making represents another potential problem, as uniform rules will receive as much or as little input as the Compact decides. This could lead to accommodations for other jurisdictions and rule making that negatively impacts our horsemen and the New York industry. Just one example of a problematic rule is the recent NYSR&WB Out of Competition Testing rule that originated with a multi-state racing entity (RCI), is opposed by NYS horsemen and is now the subject of a court proceeding.

Other examples:

The state of Kentucky allowed race day administration of therapeutic drugs like Bute and Banamine (which was banned in New York State) and Delaware allowed race day administration of Amacar for bleeders. Do we really want to risk the health and welfare of New York State horses by allowing states such as these to have a role in our own regulations?

Uniformity in regulation sounds plausible in theory; it is when that uniformity tends to erode longstanding state-based safeguards that the danger of the

ompact becomes readily apparent. Under the proposed Compact, a single individual representing New York will be granted the power to bind New York State - and our racing enterprise - in many ways.

For example, a designee binds his/her state on a rule or fee established once he/she votes affirmatively for it. But how that would work - as intertwined with current state law procedures - is unknown. It may also be offensive to some Court of Appeals precedents.

A majority of the "Commissioners" in the Compact will be able to apportion fees based upon purses paid in a state, which could mean that states paying the highest purses - such as NY, DE or PA - could see their local racing industries become overtaxed. This could potentially place New York in the unfair position of subsidizing failing racing states, just as our harness racing industry returns to prominence.

The Compact's funding powers are unlimited and appear to be specifically tied in with other entities looking for funding (RCI & Racing, Medication and Drug Testing Consortium), and their needs can be met by imposing costs without any input from the industry. This new national regulatory entity NRC will also have its own potentially major funding needs, such as travel, attorneys, investigators, auditors, arbitrators, hearing officers, office leasing, real property acquisition, etc.

Where these funds come from - and how they are spent - is clearly a serious economic issue for New York State's racing industry.

Note: While it has been suggested that the revised A-print of S3022 now contains a "fee consent provision" designed to protect horsemen from funding this new

ureaucracy, the actual way in which this language has been crafted minimizes any real economic protection. The revised language exempts from the fee consent provision "expenses for services provided by the compact commission," which represents a potential opening large enough to drive a horse through. Additionally, it does not define or address costs associated with other compact actions.

For example, while certain "fees" may need the consent of the horsemen, this provision would not prevent the passage of new rules - i.e., horsemen need to buy new sulkies every year, or tracks need to hire security guards in their barn areas for 24 hour security - that aren't "fees" but that will have potentially major economic ramifications for industry stakeholders.

Let us not forget that mandates must be funded somehow.

In conclusion, without evidence of an existing regulatory "problem" in New York State that this legislation is designed to "fix," New York's horsemen remain strongly opposed to the creation of a new, unwieldy, multi-state bureaucracy that will have no incentive to listen to or respond to the specific needs and concerns of New York industry stakeholders.

The ability for "the little guy" across New York State - the horseman, the breeder, the veterinarian - to make his/her case to the regulatory powers-that-be will essentially be stripped by S3022-A and that is simply not good policy for the future of our racing industry.

For these critically important reasons, we once again strongly urge the NYS Legislature to reject S3022-A. Should you have any questions, please contact Joe Faraldo of the Standardbred Owners Association at 718-544-6800 or the SOA's lobbyist, Joni Yoswein, at 212-233-5700. Thank you for your consideration.

Courtesy of the Empire State Harness Horsemen's Alliance

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