Washington Horse Racing Commission
Meeting Minutes
October 13, 2005

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

Ms. Roland explained that Chairman Kruger was out of town and unable to attend the meeting.

Ms. Roland called for additions or changes to the agenda. Commissioner Smith-Merkulov requested to add an executive session to discuss a complaint against an employee. Approved unanimously.

Item #1. Approval of the meeting minutes of September 8, 2005.

Commissioner Hallowell asked if Mr. Leichner had an answer to the concerns expressed by Dayton Days regarding the Washington Horse Racing Commission (WHRC) 2006 legislation which would authorize additional financial assistance to the nonprofit race meets. Mr. Leichner explained that the Dayton Days’ concern was how the money was going to be distributed. Mr. Leichner explained that the funds would be disbursed by the Commission based on a yearly basis, depending on the funds available and the projects submitted.

Commissioner Hallowell also asked Mr. Leichner to address the question from the September 8, 2005 meeting regarding the Letter of Credit by Youbet.com being too limiting. Mr. Leichner said that he and Assistant Attorney General Mike Tribble are working on this matter and possibly at the next meeting an answer would be available.

Commissioner Smith-Merkulov moved to accept the minutes as submitted. Commissioner Hallowell seconded the motion. Unanimously carried.

Item #2. XpressBet.com License renewal.

The representative of XpressBet, Mr. Greg Scoggins, had not yet arrived and Mr. Leichner knew that he wished to address the Commissioners. Item #2 was moved until Mr. Scoggins arrival.

Item# 3. Emerald Downs’ report.

Mr. Bob Fraser, Vice President/Operations was present to update the members on the status of Emerald Downs. Mr. Fraser reported that starters averaged 7.89 entries per race; total handle was up 13%.

Commissioner Smith-Merkulov asked how Monday racing compared to Thursday’s. Mr. Fraser said that with the tie-in with Monday night football, it was having a positive effect.

Item #4. Emerald Downs’ request to relocate Thurston County satellite facility.

Ms. Linda Hancock, Investigator, reported on her review of the new satellite facility, Trosper’s Sports Bar, in Tumwater. She checked the licenses for the facility and conducted a background check of the owners. No concerns were reported by local law enforcement or the City of Tumwater. As her investigation revealed nothing of concern, the staff recommended approval.

Mr. Fraser said that it had been difficult to find a replacement for the current location and recommended the site be approved.

Commissioner Hallowell moved to approve the request to relocate the satellite facility in Thurston County to Trosper’s Sports Bar. Commissioner Smith-Merkulov seconded the motion. Unanimously approved.

Item #5. American Association of Equine Practitioners Conference, December 3-7, 2005.

Mr. Leichner said the conference would be in Seattle, Washington, this year and recommended that the WHRC veterinarians and Commissioner Hallowell attend the conference. The anticipated costs would be the daily salary rate for each veterinarian attending, the fees associated with attending the conference and travel according to reimbursement as allowed per the travel regulations.

Commission members approved the recommendation.

Item #6. University of Arizona, Race Track Industry Program Symposium, December 5-8, 2005.

Mr. Leichner requested approval for Commissioner Kruger WHRC presiding steward, Doug Moore, and himself to attend this year’s symposium. Mr. Leichner stated that expenses associated with attendance would amount to approximately $1400 per attendee.

Commissioner Smith-Merkulov moved to approve the request to have Commissioner Kruger, presiding steward Doug Moore and Mr. Leichner attend the symposium. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #7. Discussion regarding the December 8, 2005 meeting.

The University of Arizona, Race Track Industry Symposium is scheduled for the same time as the regularly scheduled Commission meeting on December 8, 2005. It was suggested that the meeting either be cancelled or rescheduled.

Commissioner Smith-Merkulov suggested meeting Wednesday, December 14. Commissioner Roland stated she would have conflicts with any date other than a Thursday, but could be available on that morning if necessary. Commissioner Hallowell suggested that the meeting be cancelled completely.

Mr. Leichner stated that traditionally the Commission has approved next year’s race meet dates at the December meeting. Mr. Leichner has talked with Mr. Crockett to determine if Emerald Downs could be ready to request dates at the November 10 meeting. Mr. Crockett indicated they would try but could not make a commitment.

Mary Ann O’Connell stated that since the track traditionally opens February 1st, it would be a hardship on the horsemen if the dates were not approved until the January 12th meeting.

A date of December 14th was tentatively scheduled for a meeting, but would be cancelled if it was not needed.

Item #8. Discussion regarding 2006 Commission meeting dates.

A list of dates for 2006 meeting was reviewed. The list proposed meetings on the second Thursday of each month, specifically: January 12; February 9; March 9; April 6; May 11; June 8; July 13; August 10; September 14; October 12; November 9; December14. All meetings would be at the Auburn City Council Chambers with exception of the April 6 meeting that would be scheduled in Kennewick, Washington. That date would coincide with the opening day at Sun Downs and give the Commission members the opportunity to visit the Washington State University, College of Veterinary Medicine equine program.

Commissioner Smith-Merkulov moved to accept the 2006 Commission meeting dates as presented. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #9. Update regarding Industrial Insurance Premium Study.

Mr. Leichner stated the report was published and is available on the Commission website. The key stakeholders had received a copy of the study and the members of the Senate, Commerce, Labor, Research and Development Committee and House, Commerce and Labor Committee had been advised the study was complete and could be accessed on the Commission web page.

The study presented eight alternatives for the industry to examine. The industry stakeholders would be the deciding factor if any changes were to be made. The Commission would not make any specific recommendations.

Mary Ann O’Connell stated the horsemen had a challenge ahead of them and she was quite anxious to give them a report to review.

Item #2. Xpressbet.com license renewal.

Mr. Leichner stated that a letter notifying XpressBet of the necessary information to be provided to renew their advance deposit wagering license had been sent and all requested information had been received. The license renewal fee of $1000 had been received and the $50,000 bond had been satisfactorily addressed. There were two new persons included in the renewal information and they had successfully passed background checks. Mr. Leichner stated that staff was recommending approval for the renewal of XpressBet, Inc.’s license.

Mr. Greg Scoggins appeared on behalf of XpressBet. Mr. Scoggins gave the members a recap of the past year and stated the handle was what they had expected. Mr. Scoggins stated that XpressBet enjoyed a good working relationship with Emerald Downs’ staff and Commission staff, and expected that would continue.

Representative Quall asked Mr. Scoggins how the company handled problem gamblers and Mr. Scoggins described XpressBet’s process for dealing with problem gamblers.

Mr. Fraser stated that XpressBet had been great partners and Emerald Downs had not experienced any problems working with them. He encouraged renewal of their license.

Commissioner Hallowell moved to renew the advance deposit wagering license of XpressBet, Inc. Commissioner Smith-Merkulov seconded the motion. Unanimously approved.

Item #10. Hearing:
a) Juan Gutierrez. Moved to later on the agenda.

Item #11. Executive Secretary’s report.

a) Auditor’s report on Walla Walla Fall 2005 meet.

Mr. Leichner reported that Walla Walla’s handle was down twelve percent from the 2004 meet. He said that he’d been advised that both Walla Walla and Dayton were anticipating dropping one day of their respective race meets.

b) Walla Walla end of meet report.

Mr. Leichner stated that the end of meet report included several recommendations the Commission might be able to address prior to the next meet, such as providing more office space for WHRC staff and refrigeration equipment to hold the samples for the state veterinarian. The Commission had already provided extra radios that were invaluable to the association employees in communicating with the stewards.

Commissioner Hallowell suggested utilizing more humans rather than buying equipment in the case of “hotwalking” the horses. He felt that it would be a valuable training tool for learning the industry and get more people involved.

c) Accountant’s September 2004/2005 recap.

The auditor’s report showed that Emerald Downs’ is up 4.06% over September 2004.

d) 03-05 budget review.

Mr. Leichner provided the members with the 03-05 budget figures by object code through June 30, 2005, which will be preliminary until the close of the budget in December.

e) 05-07 budget review.

Mr. Leichner reviewed July, August and September revenue, expenditures and fund balance.

f) Off-season employment.

Mr. Leichner said six half-time, temporary positions located at the Olympia office were offered to WHRC Emerald Downs’ staff giving them an opportunity for work during the off-season. These positions were to begin at the close of the race meet and would last until February or March 2006. Four employees have applied for the positions.

Commissioner Roland asked what these employees would be doing in these positions. Mr. Leichner stated he had a long list of projects and the temporary positions would be used to work on these. Mr. Leichner stated that the positions included all benefits. The position classification is Management Analyst 1 and would offer an hourly rate of $18.14.

g) Steward Continuing Education.

Mr. Leichner reported on the continuing education conference the Commission had sponsored that was held on October 4 and 5 in Spokane. He said the seminar was well attended. He had received several comments during and after the event that praised the program and speakers.

Commissioner Hallowell who had also attended remarked that a long-time steward had mentioned to him that it was the best he’d ever attended.

Acting Chair Roland called a five minute break. (11-11:05 AM)

Item #10. Hearing:

a) Juan Gutierrez.

Mr. Gutierrez appeared on his own behalf. Commission staff was represented by Michael S. Tribble, Assistant Attorney General. Mr. Tribble offered exhibits 1-4 and moved to admit them. Testimony was heard from Douglas Moore, presiding steward, WHRC, and Mr. Gutierrez.

The members of the Commission upheld the ruling of the board of stewards. and imposed a monetary fine of $750.

Hearing closed at 12:05 PM.

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

Mr. Doug Moore, presiding steward, WHRC, spoke to the members regarding the employees appearing before the Executive Ethics Board to discuss the ability to seek employment in the industry during the off-season. Because the staff’s experience is in the horse racing industry, he felt it was a hardship for them to not be able to work for licensees in the off-season. Mr. Moore stated that he had the support of members of the industry on this issue and wanted to alert the members that they were pursuing it to the Ethics Board.

Item #13. Executive session.

Acting Chair Roland adjourned to executive session to discuss a complaint against an employee. The executive session was scheduled to last for twenty minutes.

Meeting reconvened. No further business, meeting adjourned at12:30 PM.

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Robert M. Leichner, Executive Secretary