Washington Horse Racing Commission
Meeting Minutes
March 13, 2008
March 31, 2008 Special Meeting

Present were: Carol Smith-Merkulov, Chairperson; Jeff Colliton, Commissioner; Paul George, Commissioner; Bud Hallowell, DVM, Commissioner; Hartly Kruger, Commissioner; Robert M. Leichner, Executive Secretary; Patty Sorby, Confidential Secretary.

Meeting called to order at 9:30 A.M.

Item #1. Approval of the meeting minutes of February 14, 2008.

Commissioner Colliton moved to approve the minutes as submitted. Commissioner Kruger seconded the motion. Unanimously approved.

Item #2. Chairperson’s report.

Chairperson Smith-Merkulov had nothing new to report.

Item #3. Emerald Downs report.

Mr. Jack Hodge, Vice President, NW Racing Associates LP gave the report for Mr. Ron Crockett who was unable to attend. Mr. Hodge reported wagering was down through March 10th approximately one-half a percent. Mr. Hodge reported the Muckleshoot Tribe would contribute $1.2 million to purses for the 2008 season.

Mr. Hodge reported 918 horses on the grounds at Emerald Downs but reported a shortage of workers at this time.

Mr. Hodge distributed the 2008 Stakes Schedule that was recently finalized and the condition book would be available soon.

Mr. Leichner said the Stakes Schedule submission and the Horsemen’s Benevolent & Protective Association (HBPA) approval letter concludes the required information that was to be filed prior to the opening of the Emerald Downs’ race meet.

Chairperson Smith-Merkulov asked if a letter had been sent inviting Governor Gregoire to attend the Governor’s Handicap race. Ms. Susie Sourwine said she was not sure but would check on that and send one if it had not been done.

Mr. Leichner said House Bill 2792 is before the Governor for signing on Friday, March 14th at 3:30 p.m. and asked if Emerald Downs could attend. Ms. Sourwine said she would be there.

Mr. Hodge also gave the track surface report and said new material (fibers) had been added to the surface and he hadn’t received any complaints so far. He said fibers would again be added later in the summer.

Mr. Hodge felt it would be helpful to have training by Dr. Schneider and Dr. Stover to discuss equine injury prevention and sponsored jointly by the WHRC, Emerald Downs, HBPA, WTBA, WSU, and UC Davis.

Item #4. Report by Dr. Robert Schneider on “An Evaluation of a New Surgical Treatment for Desmitis of the Proximal Insertion of the Suspensory Ligament in Horses.”

Dr. Robert Schneider of the WSU College of Veterinary Medicine said the clinical component of the project was completed and is in final stages of data collection and statistical analysis. Six horses had the surgical procedure performed on one limb and were placed in a rest and rehabilitation program. Each horse received five MRI exams to track the healing process. The horses were then euthanized and the suspensory ligaments were harvested and sent to Virginia Tech University where analysis comparing the untreated limb with the treated limb as conducted. The data analysis is near completion.

Dr. Schneider stated the cases have clearly demonstrated the collagenase model is valid for treatment of high suspensory injury. The research will be submitted for publication in Veterinary Surgery.

Chairperson Smith-Merkulov asked Dr. Schneider to return in September or October to present the completed results.

Item #5. TwinSpires advance deposit wagering license renewal.

Mr. Leichner presented the renewal application to the Commission. The initial application for TwinSpires was issued April 12, 2007 and valid through April 11, 2008. The license must be renewed each year and this process began December 28, 2007. Mr. Leichner said ARCI and WSP WATCH-CJ checks had been conducted on the officers and directors and no adverse information was found.

Mr. Leichner said TwinSpires had acquired three wagering sites: Winticket.com, BRISbet.com and TSNbet.com on June 11, 2007 and consolidated those operations into its own operations on November 27, 2007. TwinSpires local affiliate sites are betharness.com, thoroughbets.com, myracebet.com, watchandwager.com, icanbet.com and racelinebet.com. Any Washington account established at these sites is treated as a TwinSpires account.

There is no change in the agreement between Emerald Downs and TwinSpires. The $1,000 license renewal fee and the required $50,000 bond have been received, there are no material changes to the plan of operations, no pending investigations and no enforcement actions have been taken by any governmental agencies. Staff recommends approval of TwinSpires request to renew its license to conduct for advance deposit wagering.

Mr. Bradley Blackwell, Vice President, Legal appeared on behalf of TwinSpires and requested renewal of TwinSpires license.

Commissioner George asked about wagering offered on the Kentucky Derby because of the inability of some sites to acquire the signal; would a bettor have to have several accounts to be able to bet on major races? Mr. Blackwell said TwinSpires was working on opening up the signal for others to be able to simulcast major races like the Kentucky Derby.

Commissioner Kruger moved to renew the license application for advance deposit wagering by TwinSpires. Commissioner Hallowell seconded motion. Unanimously approved.

Item #Class C live race dates for Walla Walla Fall 2008 meet.

Mr. Leichner said Dick Monahan, General Manager, Walla Walla Fair & Frontier Days submitted a letter for the fall meet race days of August 29, 30 and 31, making a total request from the Class C meets of nineteen days.

Chairperson Smith-Merkulov moved to approve August 29, 30 and 31, 2008 for the Walla Walla Fair & Frontier Days fall race meet. Commissioner Colliton seconded the motion. Unanimously approved.

Item #7. Incentive Fund monies:

a. Jockey Incentive Fund.

Mr. Leichner stated the funds remaining for incentive grants is approximately $66,000. The WHRC trailer was moved from Dayton to Kennewick and the bill for that has not been received but it totals approximately $1,300.

Two options have been prepared for the Commissioners’ consideration. Option one is a proration of funds based on the number of racing days and Option two is the same as option one but eliminating competitors with only one race.

Chairperson Smith-Merkulov moved to establish a jockey incentive fund and the amount to be set aside is $35,000. Commissioner Kruger and Commissioner Colliton seconded the motion. Unanimously approved.

Commissioner Kruger moved to adopt Option two as the distribution method for the Jockey Incentive Funds. Chairperson Smith-Merkulov seconded the motion. Unanimously approved.

b. Equine Incentive Funds.

Mr. Leichner said with approval of the Jockey Incentive Fund at $35,000, the remaining funds for the Equine Incentive grants will be approximately $31,900. The notices will be sent to interested parties.

Item #8. Government Management and Accountability Program (GMAP) update.

Mr. Leichner presented a PowerPoint presentation detailing statistical data regarding agency activities. Topics included participant safety, improving equine and jockey safety, random drug and alcohol testing, veterinary pre-race inspections, veterinary post-race testing, licensing, parimutuel wagering, photo finish, clocking and public records requests. (Powerpoint presentation made a part of the record.)

Frank McDonald, President, HBPA said he had received several complaints regarding the inability of trainers to get their clocked works until after the track has closed for training. He asked the Commission to reinstate the previous practice of allowing trainers to call the clocking stand and get the times immediately after their horse has finished its work. Mr. McDonald asked if a camera could be placed somewhere that the works could be posted. He wanted to get together with WHRC, Emerald Downs and HBPA to work out some sort of compromise.

Chairperson Smith-Merkulov said she wondered why the WHRC was clocking because most tracks have their own clockers who report workout times. She asked Mr. McDonald if he wanted the Commission to examine its clocking activities. Mr. McDonald requested that the WHRC conduct a study of its clocking activities.

Don Lyon agreed with Mr. McDonald and thought the clocked times should be available immediately upon completion of the workout.

Jack Hodge said, if agreeable to the HBPA and WHRC, Emerald Downs would work with them to establish a process to provide workout times to the trainers without using the old method of calling up to the clockers. The Commission and Mr. McDonald agreed to Mr. Hodge’s proposal.

Item #9. Hearings:

a. Vern Bronson.

Chairperson Smith-Merkulov opened the hearing for Mr. Vern Bronson and introduced those present. Mr. Bronson did not appear. Mr. Robert Lopez representing staff was sworn in. He introduced ten exhibits, which were admitted. Mr. Lopez said Mr. Bronson’s hearing was originally scheduled for October 11, 2007. Mr. Bronson was unable to attend and requested his hearing be rescheduled to February 2008 and his request was granted. Mr. Bronson called prior to the February meeting and said he was unable to attend and asked to be heard at the March 13, 2008 meeting and his request was granted. Mr. Bronson called the WHRC office on March 12th and said he was unable to attend the hearing and requested the Executive Secretary grant a fourth continuance, which was denied.

Mr. Lopez asked the WHRC to revoke the temporary license and deny Mr. Bronson a license.

Chairperson Smith-Merkulov closed the hearing.

After considering the exhibits and testimony, the WHRC ordered the license of Vern Bronson be permanently revoked, further that he is permanently ineligible to reapply for a license in Washington and he is denied access to all grounds and facilities under the jurisdiction of the WHRC, including all satellite locations. Mr. Bronson is also ineligible to obtain an account with any advance deposit wagering firm licensed by the WHRC.

b. Bill Hof.

Chairperson Smith-Merkulov opened the hearing for Mr. Bill Hof and introduced those present. Mr. Hof did not appear. Mr. Robert Lopez representing staff asked the WHRC for an order of default. Chairperson Smith-Merkulov accepted Mr. Lopez’s request, dismissed Mr. Hof’s challenge of the steward’s ruling and referred the matter back to the stewards for imposition of penalty.

c. Tracy G. LeBret.

Chairperson Smith-Merkulov opened the hearing for Mr. LeBret and introduced those present. Mr. LeBret did not appear. Mr. Robert Lopez representing staff asked the WHRC for an order of default. Chairperson Smith-Merkulov accepted Mr. Lopez’s request, dismissed Mr. LeBret’s challenge of the steward’s ruling and referred the matter back to the stewards for imposition of penalty.

Hearings closed.

Item #10. Rules of Racing: Adoption Hearings:

a. Title 260 WAC Rules of Racing (Duties and Responsibilities of the Executive Secretary).

Mr. Lopez said the purpose of these amendments in Title 260 WAC is to make agency enforcement actions more efficient by authorizing the executive secretary to make initial agency determinations in the absence of the stewards and delegates responsibility and authority for enforcement of specific chapters of Title 260 WAC previously held solely by the Commission.

These amendments will allow the executive secretary to:
Make initial agency determinations, except during the live race meet;
Refer matters directly to the Commission;
Persons/ entities may challenge the decision of the executive secretary by requesting a hearing before the Commission;
Requires persons/entities to abide by the decisions of the executive secretary;
Make initial agency determinations regarding advance deposit wagering violations;
Enforce satellite location requirements.
Mr. Lopez said some public comments had been received and after speaking with those stakeholders all concerns were addressed. MaryAnn O’Connell, HBPA, suggested some language clarification and it was incorporated. Staff recommended adoption of the amendments.

Chairperson Smith-Merkulov asked for public comment.

There was no public comment.

Chairperson Smith-Merkulov moved to adopt the amendments to Title 260 WAC. Commissioner George seconded the motion. Unanimously approved.

b. WAC 260-44-020 Minimum weights.

Mr. Lopez said the purpose of the amendments is to eliminate the scale of weights because it is no longer used. The racing secretary sets the weights for each race in the condition book. The scale of weights is no longer included in the model rules. A subsection to this rule will make it the responsibility of the racing secretary to establish maximum weights for all races in the condition book. Mr. Lopez said the amendments were shared with stakeholders and no public comments were received. Staff recommended adoption of the amendments.

Chairperson Smith-Merkulov asked for public comment.

There was no public comment.

Commissioner Kruger moved to adopt the amendment to WAC 260-44-020. Commissioner Colliton seconded the motion. Unanimously approved.

Item #11. Executive Secretary report.

a. Accountant’s recap February 2007/2008.

Mr. Leichner explained the accountant’s comparison for February 2007/2008 for the calendar year and race year.

b. 2007/2009 Budget.

Mr. Leichner explained the WHRC revenues, expenditures and fund balance.

Item #12. Any other business that may be properly brought before the Commission.

Judith Holly Beaudet asked to speak to the WHRC. She asked the WHRC to suspend Emerald Downs’ license to operate until a determination could be made on the validity of the Emerald Downs’ waiver of rights form they are requiring owners to sign to obtain a parking pass.

Chairperson Smith-Merkulov said the WHRC has no jurisdiction in this matter. Emerald Downs is private property and it is within their rights to have a waiver in place.

Mr. Jack Hodge, Vice President of Emerald Downs said the waiver was put in place due to an incident that occurred on the grounds wherein a properly authorized person in a vehicle was driving on the backside of the track and an accident occurred. It is Emerald Downs’ policy that the waiver is mandatory to obtain a parking pass.

No further public comment.

Meeting adjourned at 1:30 P.M.

____________________________________
Robert M. Leichner, Executive Secretary

Washington Horse Racing Commission
Meeting Minutes
March 31, 2008 Special Meeting

Present were: Carol Smith-Merkulov, Chairperson; Paul George, Commissioner; Dr. Bud Hallowell, DVM, Commissioner; Hartly Kruger, Commissioner; Robert M. Leichner, Executive Secretary; Patty Sorby, Confidential Secretary. Jeff Colliton, Commissioner, was not present.

Meeting called to order at 10:00 A.M.

Item #1. Discussion and decisions regarding Class C incentive fund grants for FY 2009, including the jockey incentive fund as well as the cost of insurance for the Class C race meets.

Persons indicating their participation in the conference call were: Sally Calkins, DVM, WHRC; Cliff Schellinger, President, Tri City Horse Racing Association; Dick Monahan, General Manager, Walla Walla Fair & Frontier Days; Terry Jacoy, Waitsburg Days of Real Sport.

Chairperson Smith-Merkulov opened the meeting at 10:00 A.M.

Robert Leichner gave an overview of the $200,000 committed for the Equine Incentive Fund for the 07 – 09 biennium that had already been spent and the remainder left to distribute after approval of $35,000 for the Jockey Incentive Fund is $31,000.

Mr. Leichner said the Washington Horse Racing Commission (WHRC) received a letter from the Blue Mountain Racing Circuit requesting $67,000 assistance in funding their required insurance. The remaining amount to be awarded from the Equine Incentive Funds is insufficient to assist with their insurance and without the insurance the meets cannot be conducted.

Dick Monahan requested the WHRC move the funds committed to the Jockey Incentive Fund to assist with the cost of the insurance because without the insurance there would be no need to have a Jockey Incentive Fund.

Chairperson Smith-Merkulov said Mr. Leichner and Ken Mitchell, Financial Manager for the WHRC had been going over the expenses of the WHRC and expenditures are slightly lower than anticipated, it is possible to add $36,000 to the incentive funds and still be able to have the Jockey Incentive Fund of $35,000.

Chairperson Smith-Merkulov moved to go ahead with the Jockey Incentive Fund of $35,000 and take the $31,000 remaining from the original award and add $36,000 to the $31,000 totaling $67,000 to assist with the insurance costs for the Class C meets. The total award is $102,000. Commissioner Hallowell seconded the Motion.

Commissioner Kruger and Commission George both stated they supported the Class C meets, but the WHRC cannot continue to assist them financially and asked Mr. Monahan if there some hope that they could obtain assistance through their local legislators to be able to continue.

Mr. Monahan said he honestly did not have an indication that there would be any significant change. He stated the meets could not operate without the funding provided by the WHRC for purses and capital improvements.

Mr. Schellinger gave an overview of how the insurance rates have changed from $550 per day to $2850 per day, a significant increase, due to a major claim. He said they’ve been fortunate for the last two years and haven’t had any claims, but the costs keep rising.

Chairperson Smith-Merkulov said the WHRC will be monitoring and will be able to assist but only must make sure the WHRC has enough money to carryout the functions of the WHRC.

Commissioner Hallowell urged those present from the Class Cs to follow-up with their legislators. He also asked how the small meets in Oregon are able to survive. Mr. Monahan said they were fortunate to be able to get a percentage of the advance deposit wagering money.

Chairperson Smith-Merkulov called for a vote of the members present. Chairperson Smith-Merkulov, Commissioner George, Commissioner Hallowell and Commissioner Kruger voted yes. Unanimously approved.

Chairperson Smith-Merkulov moved to cancel the grant application process. Commissioner Kruger seconded the motion. Unanimously approved.

Chairperson Smith-Merkulov thanked Robert Leichner and Ken Mitchell.

Mr. Monahan thanked the Commissioners and Mr. Leichner’s efforts and how much it was appreciated by all the Class C meets. Mr. Jacoy seconded that. Mr. Schellinger invited all to his meet, the first race day is April 5.

Meeting adjourned at 10:30A.M.

____________________________________
Robert M. Leichner, Executive Secretary