Washington Horse Racing Commission
Meeting Minutes
November 10, 2005

Present were: Hartly Kruger, Chairman; Judi Roland, Commissioner; Dr. Bud Hallowell, Commissioner; Representative Dave Quall, Ex-officio Member; Susan Carlson, Assistant Attorney General; Robert M. Leichner, Executive Secretary; Patty Sorby, Secretary. Commissioner Carol Smith-Merkulov excused.

Item #1. Approval of the meeting minutes of October 13, 2005.

Commissioner Hallowell asked about the status of the Labor & Industries study, the issue of off-season employment for commission staff, and the irrevocable letter of credit from Youbet.com.

Mr. Leichner said the Labor and Industries study is available on the WHRC website and had been distributed to stakeholders. Formal meetings with the industry will be held in February 2006 when horsemen would be available to attend.

Mr. Leichner said the Ethics Board was sent a draft policy from the WHRC and we have received no response as yet.

Mr. Leichner also stated that the item regarding the irrevocable letter of credit would be discussed later in the agenda.

Commissioner Hallowell moved to accept the minutes from the October 13, 2005 meeting. Commissioner Roland seconded the motion. Unanimously approved.

Item #2. Chairman’s report.

Chairman Kruger said he’d been notified of the possible merging of the North American Parimutuel Regulators Association (NAPRA) and the Association of Racing Commissioners International (ARCI). He hoped this would take place at the Race Track Industry Program Symposium to be held the first week of December.

Chairman Kruger had recently been to England and had the opportunity to talk with former commission member Deanna Oppenheimer presently living and working there. She wished all well.

Chairman Kruger asked Mr. Leichner to give an update regarding the store and forward fingerprint (Live Scan) process. Mr. Leichner stated that ARCI has obtained the necessary equipment. WHRC staff are now moving ahead with the acquisition of the fingerprint scanning device in accordance with procurement guidelines.

Item #3. Emerald Downs’ report.

Mr. Ron Crockett, president, reported to the members that the on-track wagering is down 3.8% while instate was up 6/10ths of a percent. Selling outside the state was up 44 percent. If the meet had ended on the same day as in 2004, the purse fund would have been equivalent to the end of meet 2004, but the additional days of racing reduced the purse fund.

a) Ten cent Superfecta.

Susie Sourwine stated the patrons had been aware of this type of wager being offered at different sites and had requested the opportunity to have this added to the wagering format when wagering on simulcast races offer this wager.

Mr. Leichner stated this type of wagering is included in the model rules and there were no rules in Washington prohibiting this type of wager. No action was necessary by the members.

Break 10:20AM – 10:25 AM.

Item #4. 2006 Commission meeting dates.

Mr. Leichner updated the members regarding the meeting schedule for 2006. There are to be two meetings in April. The April 6 meeting will be the visit to the College of Veterinary Medicine at Washington State University and the April 7 meeting will be held in Kennewick. The following day, April 8th, is the opening of the meet at Sun Downs Race Track in Kennewick.

Mr. Leichner was asked by the members to set the meeting at the College of Veterinary Medicine for the afternoon to accommodate the travel time.

Item #5. Final distribution of the Washington Bred 1% Owners Bonus.

Mr. Leichner said there were 534 qualifying participants for the Washington Bred 1% Owners Bonus awards for 2005. The distribution factor for this year’s awards was 13.5966%. The total fund earnings were $1,600,250.42, one-half was returned to Northwest Racing Associates LP for new race track capital construction as provided in RCW 67.16.102(4).

Item #6. Final accounting of Emerald Downs’ 2005 Breeders Awards.

Mr. Leichner stated the final accounting of the funds set aside for breeders awards was $1,003,457.49. These funds will be disbursed by the Washington Thoroughbred Breeders Association.

Item #7. Correspondence regarding Dayton Days 2006 race meet dates.

Mr. Leichner had received correspondence from Ms. Billie Jean Brown of Dayton Days informing the WHRC that they would be dropping one day of their traditional three-day meet. Ms. Brown also requested to know what effect this would be on the monies received from the WHRC for purses. Mr. Leichner had responded that distribution of the $300,000 over nineteen days of racing results in a distribution of $15,789.48 per live race day.

Mr. Leichner also stated that he had spoken with Mr. Dick Monahan of the Walla Walla Fair & Frontier Days and they may also drop one day from their traditional five day request which would also affect the distribution of Class C purse funds.

Item #8. Correspondence received by Cliff Schellinger.

Mr. Leichner stated that Mr. Schellinger, president of Tri City Horse Racing Association and operator of the Sun Downs race meet, had forwarded a letter that he had received from Portland Meadows. The letter proposed date changes between the Sun Downs meet and the Portland Meadows spring race dates to avoid overlapping dates. Mr. Schellinger telephoned the Olympia office and said that the dates at Portland Meadows would not affect the dates being requested for Sun Downs and that Sun Downs would be operating as usual.

Item #9. Correspondence from Scientific Games Racing to move to a data center.

David Payton of Scientific Games, the company that operates the Totalizator systems at Emerald Downs, reported that the company will be moving to having two data centers, one in New Jersey and one located in Sacramento, California. This move will have no affect on the parimutuel operations at Emerald Downs. The members viewed a presentation detailing the operations at the data center.

Mr. Payton expects that Emerald Downs operations will be migrated to the data center in early 2006.

Commissioner Roland moved to endorse the move of the parimutuel operation currently located at Emerald Downs to the data center in California. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #10. Equine medical testing contract award.

Mr. Leichner announced that after receiving three bid documents on the Equine Medical Testing contract, Truesdail Laboratories in Tustin, California had been awarded the contract. Mr. Leichner stated the reviewers included himself, Dr. Sally Calkins, WHRC Veterinarian, Kenneth Mitchell, WHRC Financial Manager, and Dr. Barry Logan, Director, Washington State Patrol Crime Lab.

Item #11. Update to the license fee study.

Mr. Leichner stated that review of the license fees is required annually by rule. The review takes into account both expenses and revenues for the licensing program. Mr. Leichner included a two-page briefing document containing two options for revising the license fees to cover the cost of the program. Option one showed application of the fiscal growth factor to the license fees, which results in odd amounts. Staff’s recommendation was to raise license fees by adopting option 2 which raise the fees by whole dollar amounts within the fiscal growth factor limit.

Mr. Fraser of Emerald Downs’ asked about charging a license fee for concession workers. Mr. Leichner stated that discussions regarding licensing of concession employees was still under consideration and no decision had been made.

Mr. Hodge stated a situation had occurred on the last day of the Emerald Downs meet where an association employee who is also trained to assist at the starting gate. When the employee assisted at the starting gate on this occasion, commission security insisted that the employee also be licensed to work at the starting gate. As a result, an additional license had to be purchased on the last day of the meet. Mr. Leichner stated he was unaware of the situation and would investigate the matter.

Commissioner Hallowell moved to increase the license fees by whole dollar amounts as outlined in option 2 of the staff recommendation. Commissioner Roland seconded the motion. Unanimously approved.

Item #12. Executive Secretary’s report.

a) Emerald Downs’ end of meet report.

Mr. Leichner presented the end of meet report for Emerald Downs 2005 season. Mr. Leichner stated this was an excellent report and was satisfied with its contents. Mr. Leichner will send a copy of the report to Emerald Downs.

b) Accountant’s October 2004/2005 recap.

Mr. Leichner said in comparison with 2004 the handle is up 5.7%. These figures do not include advance deposit wagering.

c) 05-07 budget review.

Mr. Leichner reviewed revenue, expenditures and the agency fund balance.

d) Update on Youbet.com irrevocable letter of credit.

Mr. Leichner said he had exchanged correspondence with Youbet regarding the letter of credit. As a result, the letter of credit is being revised and should be received by the next commission meeting.

Mr. Leichner also updated the members on the progress of the installation of the WHRC licensing software with Oregon.

Mr. Leichner said the Commission was able to provide employment to six WHRC employees at half-time in the Olympia office. There are plenty of projects to keep them busy.

Item #13. Any other business that may be properly brought before the Commission.

Mr. Crockett made comments in support of the ability of employees to work in the industry when the live racing season ends.

Meeting adjourned.

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Robert M. Leichner, Executive Secretary