RCI: OPENING THE DOOR TO CONGRESS

By Ray Paulick

There was a table-pounding moment Tuesday afternoon at the annual convention of the Association of Racing Commissioners International when Ed Martin, president of the group seen widely as a do-nothing organization, admonished its members to do something.

I felt, for the first time in over 20 years of reporting on the RCI, that it actually might have a pulse. I flashed back to the cherubic Tony Chamblin, whose primary job as longtime head of the RCI was trying to keep his own job. When he could no longer win that battle, he left behind a legacy of a civil war among regulators, one that resulted in two national organizations, RCI and the splinter group North American Pari-Mutuel Regulators Association. Racing industry veteran Lonny Powell replaced Chamblin in 2001, and in his tenure helped put Humpty Dumpty back together. Martin finished the job in 2005, when he succeeded Powell as president of RCI, and the merger of the two organizations was completed in 2006.

So, a cynic might say, we once again have just one useless national organization of regulators with no real authority, instead of two.

Martin is hoping to change that image of the RCI, but it was clear in his rising voice and pointed words that his frustrations are growing. Betting scandals and pari-mutuel pool tampering continues, Martin said, but regulators do nothing. The industry spends $35 million on drug testing to little avail, he said, but virtually nothing on wagering security, the economic foundation of the business. Regulators  at the RCI convention hear proposals for how wagering security can be improved and then go home and do nothing. Tracks, he said, say they want to do their own thing but end up doing nothing.

Professional horseplayer Mike Maloney outlined ongoing problems with past-post betting and pool tampering and said regulators exacerbate the problems and suspicions about the integrity of wagering by shielding the incidents from the public. There must be transparency before you can insure integrity, Maloney said.

I had the opportunity to address the regulators at the RCI convention and tried to impress upon them that horseplayers are fed up like I've never seen before. I asked readers of the Paulick Report to tell me what they think should be the top priorities of state racing commissioners, and owners, breeders, trainers and horseplayers responded with legitimate and well-reasoned concerns. Foremost among them were calls for tougher enforcement of medication violations and uniform rules from one state to another, something that might not have been important 25 years ago when racing was a localized sport. Today, with interstate simulcasting accounting for nearly 90% of pari-mutuel handle, it is imperative that the rules are the same across the board: on medication, drug testing, penalties, wagering, and licensing.

There is cheating going on, and people in this industry know it, whether it's medication violations by trainers and veterinarians who know how to game the system (and only get a slap on the wrist when they're caught) or gamblers using off-shore account-wagering businesses that are not adequately regulated.

Your comments (all of which are being made available to RCI members) helped me convey to regulators how critically important it is for them to take serious action. If they don't, I suggested, the federal government will.

That point was driven home earlier in the day by Keeneland president and CEO Nick Nicholson, who is also chairman of the American Horse Council and as a former U.S. Senate aide knows how Washington can work. “This particular Congress is not concerned where the problem is but they are determined that they will be part of the solution,” Nicholson said. “This Congress is going to be activist.”

Nicholson brought the Council of State Governments into play last year in hopes of creating an alternative to federal intervention, using interstate compacts, something that is common to other industries. RCI's president, Ed Martin, also sees interstate compacts as a realistic solution to the challenge of having 38 state regulatory boards walking in lock-step with one another. But it's going to be up to the individual state racing commissions to make a compact work.

John Mountjoy, director of policy and research for the Council of State Governments, explained to RCI members how interstate compacts work and outlined their various benefits. Among other things, Mountjoy said, interstate compacts offer a federal solution “without Washington.” Uniform rules, operations and training can be achieved through an interstate compact, he said, while allowing flexibility and state sovereignty.

Interstate compacts can't happen overnight, he added, indicating it could take several years to have one fully operational.

This much we know. There is a crisis of confidence in this industry among the biggest stakeholders–the horseplayers who fund the economic engine with billions of dollars of bets each year. But those stakeholders wagered fewer dollars on U.S. racing in 2008 than in any year since 1998, and this year's handle promises to be even lower.

Racing commissioners from different states have shown over time they are incapable of taking the necessary steps to address the fundamental problems. There may be a pulse at the RCI that I didn't sense 10 years ago, and there are good people involved at RCI and many state racing commissions. However, I'm afraid that when most of the commissioners and their paid staff return home from the RCI 2009 convention, it will be business as usual and nothing significantly will change.

That will open the door to Congress and let the federal government come up with its own solution.

Copyright © 2009, The Paulick Report

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