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May 1, 2001
The Honorable Frank O'Bannon
Governor of the State of Indiana
Room 206, The Statehouse
Indianapolis, IN 46204
Dear Governor O'Bannon:
The pari-mutuel horse racing industry continued to move forward at a rapid pace in 2000. The Commission has seen several promising trends develop which are indicative of a maturing and thriving horse racing industry in Indiana. Significant growth in size of foal crops, upgrading in the quality of stallions and higher prices paid for Indiana sired or bred horses are just a few indicators. Much of the racing industry's success is due to the revenue generated by the portion of riverboat admission tax that is allocated to the racing industry. This revenue has proved vital to both Indiana horsemen and Hoosier Park.
As in the past, the Commission continues to focus its energies on diligently regulating the pari-mutuel industry. The results of our regulatory efforts, along with statistics of interest, are highlighted in this report.
As the new chairman, I look forward to working with my fellow commissioners to continue to maintain our strong regulatory presence. I am confident that we will continue to grow and further strengthen this unique and important industry.
I am grateful to have the opportunity to serve you, the public and all the fine people in Indiana's horse racing industry.
Nicholas F. Stein, Sr., Chairman
Indiana Horse Racing Commission
|Nicolas F. Stein, Sr.||Chairman * (2004)|
|Tim Sams||Vice-Chairman * (2002)|
|Janet Bozzelli||Secretary * (2001)|
|Richard "Pete" Beck||Member * (2001)|
|Ed Martin, Jr.||Member * (2003)|
* Term expires September 1st of year indicated.
|Joe Gorajec||Executive Director|
|Deena Pitman||Assistant Executive Director|
|Robert Smith||Director of Security|
|Jessica Larkins||Director of Standardbred Racing|
|Jacki Brown||Thoroughbred Development Director|
|Shirley Murphy||Licensing Supervisor|
To further assist the Commission with its regulatory responsibilities, the following individuals provided professional or technical service at Hoosier Park during the 2000 racing season.
|Standardbred Judges||Thoroughbred Stewards|
|Timothy Schmitz, Presiding Judge||Leland Seba, Senior State Steward|
|William Perkins, Associate Judge||Gary Wilfert, Associate Steward|
|Richard Williams, Associate Judge||Mike Manganelo, Associate Steward|
|Commission Veterinarian||Veterinary Technicians|
|David Younts, D.V.M.||Stephanie Adams|
|Racing Inspectors||Thoroughbred Breed Development|
|Paul Clark||Advisory Committee|
|Karla Vaughn||Mari Hulman George|
|Standardbred Breed Development|
|Advisory Committee||Standardbred Advisory Board|
|Henry B. Blackwell, II||Richard Link||Michael Thompson|
|Ernest M. Gaskin||Vic Losure||David White|
|Nat Hill, IV||Nancy Sabatini||Gary Wilcox|
|Number of Dates||102|
|Average Daily Handle||$50,846|
|Average Daily Attendance||950|
|Number of Dates||64|
|Average Daily Handle||$ 77,195|
|Average Daily Attendance||1,206|
|Number of Dates||166|
|Average Daily Handle||$59,961|
|Average Daily Attendance||1,049|
The statistics above represent attendance and handle at Hoosier Park on live racing only. Thoroughbred handle includes Quarter Horse races. Additional wagering on Hoosier Park's live racing at Indiana OTB's is as follows - Standardbred ($2,141,986), Thoroughbred ($1,924,535) totaling ($4,066,521).
The following is a breakdown of the distribution of all monies wagered at Hoosier Park and its satellite facilities:
|Returned to Bettors||$120,295,840.00|
The following are the direct state revenues collected in accordance with the pari-mutuel statute IC 4-31:
|Track Reimbursement for Officials||283,294.54|
|Fines and Civil Penalties Paid||12,275.00|
|Track Permit and License Fees||8,000.00|
The direct revenue received by the State of Indiana exceeded the cost of regulation. Indiana Horse Racing Commission expenditures for calendar year 2000 were $1,242,956.66.
|Breed||Live Handle||%||Simulcast handle||%||Total Handle||%|
The handle above represents all money wagered at all Indiana locations.
|Simulcast - Receiving||6,905,277||27.8%|
|Simulcast - Host (Interstate)||1,375,224||5.6%|
|Breakage & Outs (*)||1,145,269||4.6%|
|Live Racing (Intrastate)||999,607||4.0%|
(*) Assumes 70% of breed development funds are allocated to purses (SB 90% &TB 53%.)
Some amounts are approximates.
Pursuant to IC 4-31-6 and 71 IAC 5-1-1, all persons participating in pari-mutuel racing under the jurisdiction of the Commission are required to be licensed. The licensing process is the backbone of the Commission's regulatory efforts. Each prospective licensee is fingerprinted. The Federal Bureau of Investigation (FBI) and the Indiana State Police provide the Commission with criminal histories of all applicants. The Commission may refuse or deny the application for licensure of any person who's criminal or racing violation record is contrary to the public's best interest.
|Owner, Standardbred||1,754||Authorized Agent||40|
|Owner, Thoroughbred||1,671||Commission Staff||39|
|Stable Name||384||Asst.Trainer, Standardbred||34|
|Trainer, Thoroughbred||306||Owner/Trainer,Quarter Horse||25|
|Vendor Employee||279||Jockey Agent||23|
|Track Employee||260||Trainer, Quarter Horse||23|
|Pari-Mutuel Clerk||191||Track Management||20|
|Owner/Trainer, Standardbred||152||Pony Rider||16|
|Trainer, Standardbred||103||Gate Crew||13|
|Asst. Trainer, Thoroughbred||86||Valet||12|
|Owner, Quarter Horse||69||Other||12|
|Track Security||67||Farrier's Assistant||5|
|Total Licenses Issued: 7,808|
|Probationary Licenses Issued||21||54||53||68||80||70||89|
Pari-mutuel horse racing can succeed as a legitimate major league sport only if its races are perceived by the wagering public to be honest, competitive contests, free from manipulation by man or drugs. With the exception of furosemide (lasix) and phenylbutazone (bute), under regulatory restrictions, state law and Commission rules prohibit the presence of any drug in horses racing at a pari-mutuel track. The Commission's drug detection program is one of the nation's most comprehensive and its laboratory, one of the most respected in the racing industry.
Truesdail Laboratory in Tustin, California, serves as the primary testing laboratory for the Indiana Horse Racing Commission. Truesdail Lab has been a leader in racing chemistry and drug-related research for over 50 years. The following table indicates, by breed, the number of samples analyzed and the number of positive tests reported. In each instance, the offending horse was disqualified and placed last. In accordance with the pari-mutuel statute, all purse money earned is ordered returned and redistributed.
|Breed||Race Dates||Urine||Blood||Positive Tests|
The table below represents a further breakdown, by breed, of the name and types of drugs reported by the laboratory.
|Number of Violations||ARCI|
|3||2||Banamine (Class 4)||non-steroidal anti-inflammatory|
|1||Methocarbamol (Class 4)||muscle relaxant|
|1||Dextrorphan (Class 4)||cough suppressant|
|2||Procaine (Class 3)||local anesthetic|
|1||Promazine (Class 3)||tranquilizer|
|2||4||Bute (Overage)||non-steroidal anti-inflammatory|
Commission regulations provide that a licensee or an applicant for licensure may be required, if reasonable suspicion exists, to submit to a drug test. Commission rules require a minimum suspension of thirty (30) days for a positive test for an illegal drug.
|Human Drug Testing||1994||1995||1996||1997||1998||1999||2000|
|Number of Samples Tested||1||14||15||33||24||32||16|
|Number of Positive Tests||0||3||8||14||12||19||6|
Pursuant to IC 4-31-11, breed development funds have been established to promote the breeding of horses while stimulating the agri-business sector of the state's economy. All breakage and unclaimed winning tickets are statutorily earmarked for breed development. In addition, twenty percent (20%) of the riverboat admission tax allocated to the racing industry is distributed to breed development funds. Standardbred and thoroughbred breed development advisory committees make recommendations to the Commission regarding the distribution of these monies.
The Standardbred Breed Development Program continued with a lucrative program at Hoosier Park in 2000 that included a series of Early/Late Closing events, the GENESIS Series and the Indiana Sires Stakes. Indiana Sired Early/Late Closing events, Indiana sired overnights, GENESIS Series, and the introduction of the Indiana Sired Mini Series awarded $4,477,580 in purse money. The GENESIS is a series of races for two and three-year-old Indiana owned, bred or sired fillies, provided as an incentive to encourage ownership of fillies in Indiana to improve the quality of broodmares thereby enhancing the value and quality of yearlings produced in Indiana. Most important, the Breed Development program has provided an opportunity for the Indiana Sires Stakes to become one of the industry's premier programs. A total of $ 1,671,618 was paid in purses in 2000 to the Indiana Sires Stakes for two and three-year-old and aged Indiana sired horses. The success of the Indiana Standardbred Breed Development Program during 2000 has resulted in nearly five million dollars paid in purses at Hoosier Park and premium prices received for Indiana sired yearlings at the Indiana sales. More than 2,099 broodmares were bred to registered Indiana stallions in 2000, assuring continuous growth of our state's Standardbred industry.
The successful county and state fair purse supplement programs were continued with increased purses to the fairs. In its second year was the "Fall Classic Racing Program" which gave Indiana sired horses an opportunity to race after the completion of the Indiana State Fair and Hoosier Park. Owners of Indiana sired horses winning in open company at Hoosier Park received a bonus award. Breeder awards were made to the breeders of the winning Indiana sired horses of the finals and legs of the Sires Stakes, the finals of the Indiana sired Early/Late Closing Events, and the winners of the Indaina Sired Fair Circuit Championship race. Through these continued efforts, the Standardbred Breed Development Program is developing and promoting a fast growing and high quality Standardbred industry in the state of Indiana.
|Purse supplements - Hoosier Park||$1,728,860|
|Purse supplements - County Fairs||595,000|
|Purse supplements - State Fair||260,000|
|Purse supplements - Fall Classic||170,000|
|Indiana Sired & Breeder Awards||180,309|
The mission of the Thoroughbred Development Advisory Committee is to register thoroughbred horses for the Indiana bred program and provide incentives and awards to three important elements of the Indiana thoroughbred industry: the owner, the breeder and the stallion owner. The intent of these incentives and awards is to promote investment of capital into the Indiana economy (via thoroughbred breeding, racing and related agri-business) and maximize the positive impact to the state's economy. The incentives reward risk, and the awards reward success on the racetrack…through winning!
The Indiana bred program is funded by the Breed Development Fund established in the Indiana pari-mutuel statute. The Breed Development Fund consists of breakage (the difference in the rounding off of pari-mutuel payoffs), outs (all uncashed tickets), and the riverboat admissions tax allocation. The Indiana Horse Racing Commission receives 65 cents for every admission on an Indiana riverboat. Twenty (20) percent of the 65 cents goes into the Breed Development Fund. The Breed Development Fund is divided equally, fifty (50) percent to the Indiana Thoroughbred Development Fund and fifty (50) percent to the Standardbred Breed Development Fund.
|Purse Supplements||$ 1,470,000|
|Stallion Owner Awards 67,100|
|Breed||Breakage||Tickets *||Outstanding Revenue||Riverboat Total|
* Outstanding ticket revenue is based on tickets purchased in 1999 which expired in 2000.
The purpose of the Blood Gas Analysis (BGA) program is to deter and detect the practice of "bicarbonate loading" or what is known in the racing business as "milkshaking." This practice generally entails giving a horse a large quantity of an alkaline substance, usually baking soda, prior to a race. The alkaline substance neutralizes the lactic acid that is produced during exercise and, as a consequence, delays the onset of fatigue. Research has demonstrated that this practice induces some horses to race faster times. Bicarbonate loading can give a horse an unfair competitive edge and thus compromise the integrity of the sport. This practice is strictly prohibited by the rules of the Commission.
The BGA Program is operated by the Commission in a small laboratory located in the paddock at Hoosier Park. Blood samples of selected horses are analyzed prior to the race on a state-of-the-art blood gas analysis machine. Each sample is analyzed by a certified lab technician under contract through St. John's Hospital in Anderson.
The statute permitting riverboat gaming in Indiana earmarks sixty-five (65) cents of the three dollar admission tax to the pari-mutuel horse racing industry. These funds are distributed to various segments of the racing industry in accordance with Commission rule 71 IAC 12-2-15.
Distribution Formula for above: Pursuant to 71 IAC 12-2-15, riverboat revenue is allotted 40% to purses, 30% to the track, 20% to breed development and 10% to a track promotional fund. A cap of $6.8 million is placed on a permit holder. The overage from the $6.8 million dollar cap imposed upon Hoosier Park in 2000 amounted to $730,113.92. This amount has been allocated pursuant to 71 IAC 12-2-15 as follows (1) $200,000 to Quarter Horse purses; (2) $100,000 to Quarter Horse Breed Development; (3) $215,056.96 to Standardbred Breed Development and (4) $215,056.96 to Thoroughbred Breed Development.
All of us in the pari-mutuel horse racing industry should be indebted to those individuals whose diligent efforts have enabled Indiana to enjoy the benefits of a model pari-mutuel horse racing industry. The Indiana industry has come a long way in a relatively short period of time.
Hundreds, if not thousands, have contributed to this success. However, there are only a few individuals that have defined the success. From a legislative perspective, such individuals would include Senator Larry Borst, the late Keith Bulen and Representative Pat Bauer.
Undoubtedly, the person most responsible for implementing the model statute and applying it in a way that has led to a vibrant and balanced horse racing industry is Indiana Horse Racing Commission Chairman Michael G. Schaefer.
Mike Schaefer has served as the Chairman of the racing commission since its inception in 1989. The pari-mutuel statute does not allow for his reappointment, and thus, we will all be deprived of his steadfast guidance and leadership.
During his decade-long tenure the Chairman has maintained the delicate balance between the sometime divergent interests of the various segments of the horse racing industry. This has been done to the benefit of all and to the detriment of none. Over the years, Chairman Schaefer has consistently led the Commission to focus on what is best for the entire Indiana horse racing industry.
The horse racing industry in Indiana has much to be thankful for. We are blessed with a high quality racing venue at Hoosier Park, a premier management company in Churchill Downs and a unique funding stream from riverboat revenue that allows our purse structure to be the envy of race tracks throughout the Midwest.
We all owe a great debt of gratitude to Chairman Michael G. Schaefer. He has left an indelible mark on Indiana horse racing.