Washington Horse Racing Commission
Meeting Minutes
February 9, 2006

Present were: Hartly Kruger, Chairman; Dr. A.L. Hallowell, Commissioner; Paul George, Commissioner; Judi Roland, Commissioner; Carol Smith-Merkulov, Commissioner; Susan Carlson, Assistant Attorney General; Robert M. Leichner, Executive Secretary; Patty Sorby, Secretary.

Item #1. Approval of the meeting minutes of January 12, 2006.

Commissioner Roland moved to approve the minutes as submitted. Commissioner Smith-Merkulov seconded the motion. Unanimously carried.

Item #2. Chairman’s report.

Chairman Kruger spoke regarding the Association of Racing Commissioners International (ARCI) conference to be held in Albuquerque, New Mexico.

Item #3. Emerald Downs’ report.

Mr. Ron Crockett, President, NW Racing Associates LP, Emerald Downs spoke regarding simulcasting totals, the horse count for the 2006 meet was up 4.5% over 2005 and purses were inline with projections at approximately $111,000 per day. Mr. Crockett felt good about the upcoming meet. Mr. Crockett announced the Muckleshoot Tribe had voted to enhance the purse moneys again for the meet which will increase purses to an average of $111,000 per day, a record in Washington. Mr. Crockett said the most critical issue at this time for all stakeholders was to begin working with legislative contacts to remove the sunset clause from the advance deposit wagering law.

Commissioner George asked Mr. Crockett if the track had experienced a loss of horses around October 1. Mr. Crockett responded that some went, some stayed and some came back. Mr. Crockett discussed the practice of some tracks being monopolized by large stables taking all the purses. He said that it was a policy of Emerald Downs’ to limit the number of entries by trainers to allow a fair chance to compete by large and small stable trainers.

Mr. Crockett again spoke highly of Mr. Leichner’s support that has been asked for time after time and he is able to rise to the occasion and achieve a favorable conclusion.

Item #4. Emerald Downs’ request to relocate the Grant County (Moses Lake) satellite facility.

Mr. Leichner said this item had been tabled from the January 12, 2006 meeting. Mr. Scott Saito had investigated the location; the facility already is licensed by the Washington State Liquor Control Board and the Washington State Gambling Commission. Mr. Saito gave a brief description of the establishment and described the wagering area. Mr. Saito stated this would be a satisfactory site and recommended approval.

Commissioner Smith-Merkulov moved to approved the request to relocate the Grant County site to the Porterhouse Restaurant and Casino in Moses Lake, Washington. Commissioners Hallowell and George simultaneously seconded the motion. Unanimously approved.

Item #5. Emerald Downs’ officials.

Mr. Leichner presented the officials as reported by Emerald Downs stating the submission was nearly the same as the 2005 submission and recommended approval.

Commissioner Roland moved to approve the officials for the 2006 Emerald Downs meet as submitted. Commissioner George seconded the motion. Unanimously approved.

Item #6. WHRC officials for Emerald Downs.

Mr. Leichner presented the commission officials stating Mr. Douglas Moore would be designated as the presiding steward and recommended approval.

Commissioners Hallowell and Smith-Merkulov simultaneously moved to approve. Commissioner Roland seconded the motion. Unanimously approved.

Item #7. Class C race meet dates for 2006.

Mr. Leichner presented the requested dates from Sun Downs at Kennewick for 10 days beginning April 8 every Saturday and Sunday through May 7. Walla Walla Fair and Frontier Days requested two Spring Meet days of May 13 and 14. Waitsburg Days of Real Sport requested two days May 20 and 21. Dayton Days requested two race days of May 27 and 28 and Walla Walla Fall meet of September 1, 2 and 3 for a total allocation of nineteen live race days.

Commissioner George moved to approve the dates as requested. Commissioner Roland seconded the motion. Unanimously approved.

Item #8. Class C 2006 officials.

Mr. Leichner presented the officials for each of the Class C race meets. Mr. Leichner said the insurance information was not listed because the Class C race meets were unable to provide the information. They were still negotiating terms with the insurance company.

Mr. Leichner recommended approval of the officials as submitted by each association. In addition, Mr. Crockett has pledged to assist the Class C meets monetarily with insurance costs as he did in 2005.

Commissioner Smith-Merkulov moved to approve the officials as submitted. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #9. WHRC Officials for Class C race meets.

Mr. Leichner submitted the roster of officials of the WHRC for the Class C meets designating Mr. Robert Lightfoot as presiding steward. Mr. Leichner recommended approval.

Commissioner Roland moved to approve the WHRC officials for the Class C race meets. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #10. Discussion regarding Liability Insurance for the Class C race meets.

Mr. Leichner discussed a letter from Dick Monahan representing the Class C race meets advising the commissioners about the difficulty for the Class C meets to obtain liability insurance for jockeys at a reasonable rate. The Class C meets are concerned that they may not be able to afford the insurance and may not be able hold their live race dates. Mr. Monahan had asked Mr. Leichner to meet with Labor & Industries (L&I) and discuss the possibility of having jockeys included in the L& I system which may give them a savings over the current rates being charged by private insurance companies for liability insurance.

Mr. Leichner has talked with Bill Vasek, Actuary for L&I. Mr. Vasek will review the records and provide workers compensation costs for covering jockeys. Mr. Leichner also discussed the subject of having jockeys included in the L&I system but not within the horse industry account.

Mr. Leichner also stated the WHRC will be able to assist the Class C meets next fiscal year if the legislation passes. The Class C meets plan to go forward this year if the legislation passes.

Mr. Leichner will keep the commissioners advised.

Item #11. Rules of Racing: Adoption Hearing:

a) Chapter 260-36 WAC Licensing.

Mr. Robert Lopez outlined the key dates for the commissioners and discussed the amendments to the rules in Chapter 260-36. Mr. Lopez had received stakeholder comments and had incorporated those changes. Mr. Lopez recommended approval and adoption.

Commissioner George moved to adopt the changes as described to Chapter 260-36 Licensing. Commissioner Roland seconded the motion. Unanimously approved.

i) Policy/Interpretive Statement Duration of License 2006-01.

Mr. Lopez explained that adoption of the amendments to Chapter 260-36 and the filing requirement of thirty-one days would create a gap for licensing purposes regarding the duration of a WHRC license. This policy/interpretive statement will extend the duration of a 2005 Class 1 employee license to March 31, 2006.

Commissioner Roland moved to adopt the Policy/Interpretive statement 2006/01. Commissioner Smith-Merkulov seconded the motion. Unanimously approved.

ii) Policy/Interpretive Statement Licensing Fees 2006-02.

Mr. Lopez explained that the adoption of the amendments to specifically WAC 260-36-085 Licensing and fingerprint fees and portions of the policy/interpretive statement 2004-05 will no longer be applicable. Staff is offering changes to the policy statement to meet the new provision of chapter 260-36 WAC.

Commissioner Smith-Merkulov moved to adopt the Policy/Interpretive Statement 2006-02 as submitted. Commissioner George seconded the motion. Unanimously approved.

2. WAC 260-48-800 Parimutuel wagering pools.

Mr. Lopez said in April 2005 the commission adopted a policy statement adopting the net price calculation from the model rules. The proposed amendment is to include the net price calculation in permanent rule. Mr. Lopez recommended the proposed amendments to WAC 260-48-800 be approved.

Commissioner Roland moved to adopt the amendments to WAC 260-48-800 as submitted. Commissioner George seconded the motion. Unanimously approved.

Item #12. TOBA drug testing protocols for 2006.

Mr. Leichner reviewed the TOBA Drug testing requirement to maintain the graded stakes rating for the Longacres Mile. Mr. Leichner stated the protocols were essentially the same as required in 2005. Truesdail Laboratory is able to conduct the tests. Mr. Leichner stated that out of 140 samples tested, no positives were detected.

Item #13. Executive Secretary’s report.

a) Accountant’s January 2005/2006 recap.

Mr. Leichner reviewed the monthly comparison prepared by the commission auditor for January 2005 and January 2006.

b) 05-07 budget review.

Mr. Leichner explained the expenditures and revenues for the WHRC for January 2006. Mr. Leichner reviewed the revenues, expenditures, fund balance, and interest bearing accounts.

c) Legislative update.

Mr. Leichner said the agency request legislation was to be heard in the Senate.

Horse Racing had been eliminated from the bill requiring a minimum age of twenty-one to gamble.

d) Live Scan fingerprinting update.

Mr. Leichner said two LiveScan devices and a scanner for fingerprint cards had been ordered and the WHRC was waiting for delivery.

Item #14. Any other business that may be properly brought before the Commission.

Commissioner George with his background in journalism agreed to write a press release regarding WHRC being the first to implement the LiveScan system for submitting fingerprints to the ARCI for criminal history.

Mr. Leichner also wanted to thank Chairman Kruger for all his persistence with the ARCI to obtain the necessary technology to allow states to submit electronic fingerprints for background checks. It saves time and greatly improves receipt of CHRI (criminal history record information) and the processing of license applicants.

Meeting adjourned at 11:30 a.m.

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Robert M. Leichner, Executive Secretary