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Ohio has seven commercial race horse tracks. Three tracks race Thoroughbred horses, as you would see in the Kentucky Derby, and four tracks race Standardbred horses, as you would see at the Little Brown Jug. In addition, there are over 60 county fairs that have Standardbred racing. The Ohio State Racing Commission announced they are going to focus on Advance Deposit Wagering (ADW) companies and out-of-competition testing in 2017.

ADW is a form of wagering in which the bettor must fund an account before being allowed to place bets via online systems on the races. The funds are almost exclusively obtained with a credit card charge. Wagers that are placed through an ADW negatively affect Ohio because no money is held for any of the Ohio horse racing taxes, such as the Commission’s operating fund or the breeding funds. As a result, ADW companies make wagering through them more attractive than wagering at a track because the ADW company can offer rebates that cannot be done through Ohio law. Rebates allow the betting public to receive a higher pay out on their wins. The Commission has proposed a statutory change to license the ADW companies and tax the wagers placed through the ADW companies. This would result in a smaller payout to the public but more money for the Commission and its funds.

The Commission has not indicated if there will be federal challenges (improper taxes, commerce clause issues, or the interstate horse racing act) or what the costs of defending these challenges could be. Nor has the Commission indicated what it would do if it obtained additional funding through the regulation of ADW companies. Maybe it will hire additional investigators. Most of the race tracks do not have a dedicated investigator.

The Commission also wants to expand its investigatory authority, despite the fact that it is at an all-time low with investigators on its payroll. The Commission believes that non-licensed individuals are training horses on private farms and at county fairgrounds, though it has not publicly stated why they have this belief. The Commission has not explained why traditional investigative techniques have failed. Regardless, the Commission wants to expand its authority to visit any location in the state to determine if violations of the Commission’s rules and regulations are taking place. This means the Commission could come onto your property even if you have no ties to horse racing, as long as the Commission believes it could find evidence of a violation of its rules and regulations. Non-licensees would apparently be subject to rules and regulations that licensees are, yet the Commission has no authority over non-licensees. County fairgrounds, where many horses stable and train, would fall under the purview of the Commission, despite their current independence from the Commission. I believe the Commission will overstep its authority if it attempts to conduct investigations where it has no jurisdiction.

In addition, the Commission wants to secure blood and urine samples from racehorses on days the horse is not racing. Currently, the Commission can only take samples on race day from horses that are scheduled to race. The Commission states it needs to test samples on non-race days to discover blood doping agents, venoms, and growth hormone. There used to be tests to discover these in race day samples, although maybe the Commission has found a more effective test. The Commission wants to send personnel on private property to collect urine and blood samples from race horses. If the personnel are not allowed on the private property, then the owner/trainer of the racehorse will be responsible to bring the horse to an approved location for the blood and urine to be collected. Isn’t the Commission concerned about the cost and risk of shipping a horse?

If you are concerned about the Racing Commission’s proposed changes, or have any questions about horse racing in the state of Ohio, you should consider contacting an attorney at Graff & McGovern. John Izzo of Graff & McGovern can be reached at 614-705-1400, extension 5.