Maryland Racing Commission

In accordance with the Notice of Public Meeting, as required by §10-506, State Government Article, Annotated Code of Maryland, the Maryland Racing Commission ("Commission") met in open session on February 19, 2013, commencing at 12:30 PM in the Clubhouse at Laurel Park, Laurel, Md. 20725.

Minutes - January 15, 2013.

The Commission waived a reading of the minutes of its January 15, 2013 meeting and voted unanimously to approve them.

Update on Thoroughbred Breeders' Task Force.

Referencing the presentation of the MRC Breeders' Task Force ("Breeders' Task Force") to the Commission at its February, 2013 meeting which identified issues problematic to the Maryland thoroughbred breeding industry, Chairman Quade advised that, today, the Breeders' Task Force (in the persons of Dr. Thomas Bowman, Commissioner David Hayden and Mr. Larry Johnson) would be presenting their recommendations to the Commission on measures to address these problematic issues and improve the thoroughbred breeding industry in Maryland. Commissioner Hayden thanked the Chairman for his consideration of these matters and also thanked the members of the Breeders' Task Force for all their time and assistance in analyzing the Maryland- Bred program. Commissioner Hayden then introduced Larry Johnson, a CPA specializing in forensic accounting. Utilizing a "power point" presentation, Mr. Johnson advised the Commission that, in Maryland, over the past several years: (1) the foal crop has declined 78%; (2) horses bred in Maryland declined 80%; (3) the number of Maryland stallions has decreased 84%; (4) $3M in stud fees have gone from Maryland to Pennsylvania; (5) median yearling sales in Maryland has dropped from $15,000 in 1995 to $8,000 in 2011 with a completely opposite effect occurring in Pennsylvania; (6) purse monies earned by Maryland-breds for finishing 1st, 2nd, or 3rd declined 33% in 2010, and declined another 25% in 2013. As noted by Mr. Johnson, these drastic reductions are directly attributable to the increase in purses for state-bred horses in Pennsylvania and other states surrounding Maryland, as well as breeder incentives in those states - all made possible by funding from slot revenues.

As noted by Mr. Johnson, the Breeders' Task Force recommends an increase to the advertised purse fro each registered Maryland Bred horse finishing 1st, 2nd, or 3rd in any race other than a stakes race be enhanced by an additional 30% of the advertised purse at all Maryland thoroughbred tracks which, it is estimated, will result in the expenditure of approximately $2.4M from the purse account per annum. The Breeders' Task Force also recommends an increase in breeder awards and stallion awards which would be funded by monies in the Maryland-Bred Fund, as an incentive for horses to be bred in Maryland. Mr. Johnson estimates that the implementation of this restructuring would provide an additional $6.4M to owners and breeders of Maryland-breds, as well as the owners of Maryland stallions ($2.4M from purse enhancements - 38% of the $6.4M; $3.9M from Maryland-Bred Fund - 62% of the $6.4M).

Chairman Quade again thanked all the parties for their excellent work. In moving this forward, Chairman Quade requested the stakeholders (thoroughbred tracks, thoroughbred horsemen, and thoroughbred breeders) interact with the Breeders' Task Force members to discuss the above recommendations; identify what can and cannot be agreed upon; and report back to the Commission on those discussions at next meeting of the Commission.

Mr. Arthur Lisi asked Chairman Quade when the standardbred industry would be conducting such a review. Chairman Quade informed Mr. Lisi that Commissioner Winebrener would be leading those discussions for the standardbred breeders.

Maryland Standardbred Race Fund Advisory Committee.

The Maryland Standardbred Breeders Association nominated Gary White to replace the recently deceased Ralph Hayward on the MSBA Advisory Committee. Hearing no objection, the Commission unanimously approved the request.

Maryland Jockey Club.

Executive Director J. Michael Hopkins presented the Commission with a request from the Maryland Jockey Club for their Spring, 2013 race meeting which included the number of live days, a request to import and export the races MJC finds marketable, and other standard information such as a listing of employees and officials. Mr. Hopkins further explained that the only change from the previous year was a request to run live racing until the Belmont Stakes (June 8, 2013) and not end its live racing on Preakness Day. Hearing no objection, the Commission unanimously approved the requests.

Racing Facility Redevelopment Fund.

Executive Director J. Michael Hopkins informed the Commission of requests from Prince George's Racing Ventures, LLC and Ocean Downs, LLC for grants from the Racing Facility Redevelopment Fund for 50% of the expenditures each track already has incurred. Mr. Hopkins advised the Commission that these requests, respectively, were being reviewed by a certified public accountant; and, upon the CPA review being completed, the requests for matching funds would be presented to the Commission.

February 1, 2013 Reports.

Executive Director J. Michael Hopkins informed the Commission that all of the track licensees who are eligible for funds from the Racing Facility Redevelopment Fund have submitted their respective capitol construction and improvement plans to the Commission and Department of Budget and Management as required by an uncodified section of Senate Bill 1 (Second Special Session of the General Assembly, 2012).

Legislative Update.

Executive Director J. Michael Hopkins advised the Commission members that Senate Bill 858 and 961 have been scheduled for a hearing on March 14, 2013. Mr. Hopkins explained that SB 858 would require the Commission to hold a hearing for an individual, licensed by the Commission, who had been ejected from a racetrack by track management. Mr. Hopkins noted that there had been only one such ejection which was brought to the attention of the Commission during the past 25 years. Tom Chuckas, representing MJC, informed the Commission that MJC intended to oppose the bill; and Chris McErlean, representing PGRV (Rosecroft), as well as Howard M. ("Max") Mosner representing the Maryland State Fair (Timonium) advised that they also would oppose the bill. The Commission, noting the private property rights of a racetrack, voiced their opposition to the bill as well.

SB 961 would allow up to a 40% takeout regarding specific wagers authorized under regulations adopted by the Commission; provided, the licensee offering the wager has the Commission, the group that represents the majority of owners and trainers licensed in the State, and the group that represents a majority of breeders in the State.The bill also allows the owner of the Bowie Race Track Training Center to convey the property that currently is the Training Center to the City of Bowie. The Commission, noting that the closure of Bowie was an issue discussed during the negotiation of the "10 Year Agreement", voted to take no position on the bill.

Video Lottery Revenue - Report.

Executive Director Hopkins provided the Commission with the January, 2013 VLT reports.

COMAR 09.10.01.07 - Claiming - Proposal to Amend.

Executive Director J. Michael Hopkins explained to the Commission that the Maryland Thoroughbred Horsemen's Association had requested amendments to the current claiming regulation, as proposed and on an emergency basis. The proposed amendment would:

1. For a period of 30 days from the date a horse is claimed, prohibiting that horse from starting for a claiming price less than the claiming price for which the horse was claimed;
    
2. Providing for a horse not being subject to claim if:
1. The horse has not started for a minimum of 180 days;
2. The horse is entered for a claiming price at least equal to the claiming price for which the horse last started;
3. For the first race following the period of not starting, the horse is declared ineligible to be claimed at the time of entry; and
4. The program clearly designates that the horse is ineligible to be claimed; and
    
3. A person shall not be eligible to claim more than one horse in a race, either directly or through another.

The Commission voted unanimously promulgate these regulations on a proposed, and an emergency basis.

Regional Medication Proposal.

Executive Director J. Michael Hopkins informed the Commission of a meeting on February 5, 2013 between 9 states in the Mid-Atlantic region regarding uniform regional medication policies which included: (1) the elimination of adjunct bleeder medications; (2) the adoption of standards for 24 commonly used medications in horse racing (e.g., withdraw times and threshold levels); (3) administration of lasix on race day only by a Commission or designated veterinarian; and (4) all laboratories being accredited and participating in an external quality assurance program. Mr. Hopkins stated that the issue of uniformity has been an item of discussion of the Racing Medication and Drug Testing Consortium for the last several years. He added that, in order for a uniform policy to work, all of the mid-Atlantic racing jurisdictions had to agree to implement such a policy. Alan Forman, counsel to the Maryland Thoroughbred Horsemens' Association (MTHA), stated that it was well-known that he had been leading the fight for uniformity for a number of years; and that the MTHA had voted to support these recommendations. Mr. Forman further informed the Commission that, in 2005, the Mid-Atlantic region had agreed to a uniform medication policy; however, because the Racing Medication and Testing Consortium was seeking the adoption of a national medication policy, RMTC requested the mid-Atlantic region to wait until the RMTC had had the opportunity to create a national policy. Considering that a national policy has not been adopted, the mid-Atlantic racing jurisdictions now have agreed to pursue uniformity on a regional basis. Mr. Forman noted that one of the issues needing uniform resolve was the elimination of adjunct bleeder medications - currently permitted only in Maryland, Louisiana and Virginia, the latter eliminating their use of adjuncts if Maryland did. It also was noted that the MRC Laboratory is not accredited; and certain equipment which the MRC Lab does not have what is needed to perform the necessary analysis of the 24 listed medications. Chairman Quade asked Tom Chuckas (MJC), Chris McErlean (PGRV) and Peter Syzmanski (Ocean Downs) their respective positions in regard to the Regional Medication Proposals. Mr. Chuckas advised that MJC supported the initiative with the caveat that the reforms be implemented completely on a regional basis. Mr. McErlean and Mr. Syzmanski indicated their support as well. Dr. George Harmoning, a practicing veterinarian at the thoroughbred tracks, objected to the elimination of adjunct medications; he stated that the use of adjuncts does aid in the reduction of bleeding, and that the elimination of their use would not be beneficial to the horse. Commissioner John Franzone asked Dr. Harmoning how many horses on the grounds of Laurel were using adjunct medications. He responded that he believed approximately 90% of the horses used this particular type of medication. Mr. Forman noted there is no any scientific information which supports the use of adjunct medications - citing a study, performed by the University of Pennsylvania, to this effect. Dr Nick Mettinas stated that, if adjunct medications were prohibited, he would be desirous of having some information which provided a withdraw time for adjunct medications used in training. Sharon Roberts Executive Director of the Cloverleaf Standardbred Owners Association (CSOA) objected to the elimination of adjunct medication being applied to the standardbred industry since it is permitted to be used at the standardbred tracks in Pennsylvania and Delaware. Chairman Quade suggested that a sub-committee of the Commission meet to discuss each segment of the uniform approach; meet with the stakeholders; and develop a time line for adoption. Dan Myer, a standardbred trainer, expressed his concern if a specific time was implemented for the administration of lasix, since standardbred horsemen ship-in their horses to Maryland to run. Chairman Quade speculated that the sub-committee of Commission would discuss this concern and others.

On a different note, Tom Cooke, President of the Cloverleaf Standardbred Owners Association, recommended that pre-race TCO2 testing be conducted at Rosecroft. Executive Director J. Michael Hopkins stated that he would look at the logistics of performing pre-race TCO2 testing; and that the Commission would consider it. Chairman Quade asked Mr. Cooke to provide the Executive Director with a list of recommendations forTCO2 testing at Rosecroft.

Public Comments.

Commissioner Tom Winebrener recognized Dan Myer for being voted in as Ralph Hayward's' replacement as the President of the Maryland Standardbred Breeders Association and Joe Thompson, the owner of Winbak Farm, located in Cecil County, as one of the recipients of the Maryland International Business Leadership Awards.

Next Commission Meeting.

Wednesday, March 20, 2013 at Laurel Park 12:30 p.m.

J. Michael Hopkins
Executive Director