Ed Martin, President Racing Commissioners International

Common Complaints:  38 different racing jurisdictions with different rules;  “Political Appointees” who may not have a background in racing;  “Runaway Regulation”  “They did WHAT?”  Racing Needs a “Central Authority/League Office”.

Original Regulatory Scheme:

Evolution of Technology:  On track wagering;  Simulcasting and off track betting;  Telephone betting;  Cable and satellite TV  Cell phones;  Internet;  ????

RACING today: Racing fans not physically at the track Simulcast network Online accounts View from cell phones Multi-jurisdictional participants Overwhelming handle off track Significant % crosses state line

INCONSISTENCIES in RULES  Bothersome to:  Participants who operate in multiple states,  Vendors,  Fans.

RCI Model Rules:  Proposed rules circulated to industry for comment.  RCI members vote.  Model Rules are “recommendations” and non-binding on regulators or industry.  Non-adoption “frustrating” after considerable effort to reach consensus and consider industry concerns.

Jurisdictional Rulemakings  Commissions start process all over  Model rule language may be changed or ignored  Industry participation in development varies state to state ○ Some are inclusive. ○ Others publish in state register and you’re on your own.  Regulators vote.

What is NEEDED?  An option for government to improve the way government does business.  Greater efficiency.  Reduce redundancy.

Racing Regulatory Compact  Creates an option for commissions to operate: Collectively; Consistently; More efficiently.

Status Quo vs. Racing Compact Similarities Status Quo:Racing Compact:  Commissions make rules.  Opportunity for public comment.  Other states don’t dictate rules in my state.  Horsemen can object through the political process.  Commissions make rules.  Opportunity for public comment.  Other states don’t dictate rules in my state.  Horsemen can object through the political process.

Status Quo vs. Racing Compact Improvements Status Quo:Racing Compact:  Model Rules do not result in actual rules.  Horsemen provide input but do not sit on regulator committees.  Model Rules do not require industry consensus.  State rule promulgations sometimes missed.  Extension of MR process to result in actual rules where appropriate.  Horsemen’s groups have seats on policy committees.  Compact focused on advancing consensus rulemakings.  Horseman’s groups part of process – impossible to miss.

Status Quo vs. Racing Compact Some Differences Status Quo:Racing Compact:  States can impose fees without horsemen consent.  Horsemen often miss opportunity to comment on proposed rules.  Horsemen’s fees can be diverted for non racing purposes.  Compact cannot impose fees on horsemen without consent.  Horsemen part of process of rule development.  Compact can only fund racing related programs.

This advances consistency, but does not require it. For those who desire total uniformity, this is NOT a perfect solution – but it’s a major improvement.  States not REQUIRED to go along with Compact rule.  BUT: This is a protection for the industry/horsemen in a particular jurisdiction where the Compact rule might not be appropriate.

What this is NOT:  A new layer of regulation. This creates an option to reorganize how the existing layer works.  Creation of a costly new bureauracy. Central promulgation of rules requires 2-3 people.  A new cost to the industry. Existing Commission and RCI resources envisioned.

Nothing Ventured Nothing Gained.  Commissions have no more or less power than they now have.  Horsemen have no more or less power than you have now.

Bottom Line:  A compact is a contract between states to create an option for government to reorganize how government works.  Goals: 1. A substantially Uniform Rulebook; 2. Consistent regulations; 3. Elimination of redundancy; 4. Greater efficiency = cost control.

Please support this effort.