RWB-16-10-00034-P Uncoupling of Entries with Common Thoroughbred Trainers

4/21/10 N.Y. St. Reg. RWB-16-10-00034-P

NEW YORK STATE REGISTER

VOLUME XXXII, ISSUE 16

April 21, 2010

RULE MAKING ACTIVITIES

RACING AND WAGERING BOARD

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. RWB-16-10-00034-P

Uncoupling of Entries with Common Thoroughbred Trainers

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of sections 4025.10 and 4035.2 of Title 9 NYCRR.

Statutory authority:

Racing, Pari-Mutuel Wagering and Breeding Law, sections 101 and 231

Subject:

Uncoupling of entries with common thoroughbred trainers.

Purpose:

To allow multiple horses with a common trainer to compete in the same race as separate betting interests.

Text of proposed rule:

4025.10. Limitations on entries.

(a) A horse whose managing owner is a partnership cannot be entered or run in the name, whether real or stable, of an individual partner unless that individual's interest or property in the racing qualities of that horse is equal to at least 25 percent.

(b) All horses in common ownership as defined in section 4026.2(e) of this Title (i.e., having any common managing owner) or section 4026.3(c) (i.e., in which there is a 25 percent commonality among non-managing owners) must be coupled and run as an entry.

(c) Not more than two horses trained by the same person shall be drawn into any overnight race, or on the also-eligible list, to the exclusion of another horse.

(d) [All horses trained by the same trainer must be coupled and run as an entry.]

A maximum of two horses trained by the same trainer may race uncoupled in any race provided the entries do not have common ownership as set forth in (b) above.

(e) The board steward may require any horses entered in a race to be coupled for betting purposes prior to the commencement of wagering on-track and off-track, if he finds it necessary in the public interest.

(f) All horses trained or ridden by a spouse, parent, issue or member of a jockey's household shall be coupled in the betting with any horse ridden by such jockey.

(g) Notwithstanding the provisions of subdivisions (b) and (d) of this rule, no entry shall be couples by reason of common ownership or training in any race in which the gross purse is $1,000,000 or more, provided however that the provisions of subdivision (e) of this section shall continue to be applicable in any such races. In any race subject to the provisions of this subdivision, the racing secretary shall have the authority to establish a mutuel field and coupled entries in any race with more than 14 starters.

4035.2

(e) i. If two or more horses are coupled in the betting as an entry, and one or more of them shall be disqualified for violation of the rules of racing, the balance of the entry shall also be disqualified if in the judgment of the stewards such violation prevented any other horse or horses from finishing ahead of the other part of the entry. If said violation is without such effect upon the finish of the race, penalty therefore may be applied against the offender and the balance of the entry may go unpunished.

ii. If any horses trained by the same trainer race uncoupled in any race, and one or more of them shall be disqualified for violation of the rules of racing, any other horses entered by that same trainer shall also be disqualified if in the judgment of the stewards such violation prevented any other horse or horses from finishing ahead of the other part of the entry. If said violation is without such effect upon the finish of the race, penalty therefore may be applied against the offender only.

Text of proposed rule and any required statements and analyses may be obtained from:

John J. Googas, New York State Racing and Wagering Board, One Broadway Center, Suite 600, Schenectady, New York 12305, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory Authority: Racing, Pari-Mutuel Wagering and Breeding Law ("Racing Law") Sections 101, 218, 231, 235, 236, and 238. Section 101 vests the New York State Racing and Wagering Board ("Board") with general jurisdiction over all horse racing activities and pari-mutuel betting activities in New York State. Section 218 requires stewards to supervise the conduct of racing in accordance with rules of the Board. Section 231 authorizes the lawful conduct of pari-mutuel betting on horse racing subject to supervision and for the purposes of raising revenue for the support of government and the promotion of agriculture generally. Section 235 provides that the Board shall make rules regulating the conduct of pari-mutuel betting. Sections 236 and 238 establish tax rates and provides for the distribution of wagers based on the type of wagering conducted.

2. Legislative Objectives: Pursuant to Article I, Section 9 of the New York State Constitution and Racing Law Section 231, pari-mutuel betting on horse racing was legalized for the purposes of deriving reasonable revenue for the support of government, to promote agriculture generally, and for the improvement of breeding of horses, particularly in New York State. The proposed rule amendments would provide additional wagering opportunities for bettors by removing certain existing limitations on entries in pari-mutuel races. The additional wagering opportunities would reduce the risk of canceling or not being able to offer certain pari-mutuel wagering pools (which require minimum numbers of wagering interests), and also generate larger pari-mutuel pools, which would in turn generate a proportionate corresponding increase in amounts payable as pari-mutuel tax, for purses, for breeding funds, and to be retained by the track operator. These amendments would thus provide further revenues for the support of government and additional monies for the payment of purses and payments to breeders for New York-bred horses, which participate in New York racing. The authorization to the stewards to disqualify horses trained by the same trainer in appropriate situations furthers these goals by providing assurance to the wagering public that the integrity of racing will be monitored and preserved when these rules are implemented.

3. Needs and Benefits: These rules will promote agriculture and horse breeding by increasing the field size of certain pari-mutuel races and thus result in more/betting interests and less cancellations of large wagering pools. A betting interest is an individual horse or more than one horse if coupled for wagering purposes. The bettor has more interests on which to wager when horses are not coupled because the identical number of horses results in more betting interests (i.e. wagering opportunities). Currently in situations where multiple horses are trained by the same trainer and compete in the same race (except in races with a greater than $1 million purse), these horses are coupled (i.e. united) for betting purposes as one betting interest. This results in fewer wagering interests (opportunities) for the wagering public in each race with coupled horses. This rule would permit no more than two horses trained by the same trainer to race uncoupled for wagering purposes. This would be prohibited if the horses have common ownership as defined in subdivision (b) of Rule 4025.10. The common ownership restriction and the authorization to the stewards to disqualify horses trained by the same trainer in appropriate situations provides assurance to the wagering public that the integrity of racing will be monitored and preserved when these rules are implemented. These amendments will increase the amount of money wagered with resulting benefits to government and the racing participants, including the corporation conducting the race meeting, owners, trainers and breeders through larger purses, and the betting public through larger wagering pools to be distributed. It is estimated that these rule amendments would impact approximately 65% of races conducted at the three tracks operated by the New York Racing Association Inc. (Aqueduct Racetrack, Belmont Park, Saratoga Race Course), increasing field size from 7.91 to 8.64. Over 1,000 races/year would be impacted. For a three year period, it is estimated that total additional wagering handle would be $556,000,000. Total additional purses over this same period are estimated to be $18,751,000. Estimated total additional pari-mutuel tax is estimated to be $1,095,000 with increased payments to breeders of $479,000 and the Board as a regulatory fee of $342,000. The integrity of racing is safeguarded by the stewards' authority to disqualify horses trained by the same trainer and running in the same race, when certain circumstances require in order to protect the interest of the betting public. Three stewards observe each race. The stewards have the benefit of the assistance of patrol judges, who also observe the conduct of the race, and replays of the race for review. These rules also promote inter-state uniformity since many major racing states do not have the current New York State coupling requirements for horses trained by the same trainer entered in a single race.

4. Costs: a) The adoption of these rule amendments would not impose any additional costs on the regulated parties-tracks, owners and trainers. These rules exist currently (4025.10[g]) for certain races, Belmont Stakes, Travers Stakes and Breeder's Cup races (if held in New York), i.e. those with a gross purse of one million dollars or more. These rules provide the opportunity to race horses as individual betting interests with advantages to the track, owners and trainers. The track simply applies the rule by not coupling horses in contrast to the present situation of coupling horses. This is a mere clerical entry for programming purposes and is provided in the racing program and otherwise as information for the horsemen and bettors. There are no additional costs to monitor races in which the horse will race as separate betting interests. There are no costs for continuing compliance.

b) There will be no additional costs for the agency or the state and local governments. The State (by on-site officials of the Board, Board-approved stewards of the racing association and The Jockey Club, and existing regulatory structure) has existing framework to oversee implementation of this rule, including the ongoing monitoring of thoroughbred races. There is no local government involvement in the conduct or regulation of thoroughbred racing.

5. Local Government Mandates: None; there is no local government involvement in the conduct or regulation of thoroughbred racing.

6. Paperwork: None; there are no new forms or reports required by this rule or any recordkeeping requirements. The track simply applies the rule by not coupling horses in contrast to the present situation of coupling horses. Owners and/or trainers will continue to enter horses verbally or by continuing the practice of completing forms for the entry of horses.

7. Duplication: None.

8. Alternatives: The Board solicited pre-proposal comment from the racing industry. These changes are supported by various interests, including both New York thoroughbred track operators, the representative horsemen's organization at the New York Racing Association tracks, and New York off-track betting corporations. Limit comment was received opposing the changes on the basis that the opportunity for impropriety would exist if the existing restrictions were eliminated.

The Board considered continuing the existing coupling restrictions. However, in light of existing fiscal concerns and in the Board's judgment, the proposed rule changes provide a financial benefit to the State with sufficient protection for the wagering public. The three stewards will review each race for violations relating to the running of uncoupled horses, and the rule change limits uncoupling to two horses per trainer in the same race provided there is no common ownership. The Board considered eliminating the current restrictions without including a two horse per trainer limit. However, this was deemed to impose an unacceptable risk to the wagering public of the appearance of or actual impropriety in the running of races in which a single trainer might have an interest in more than two horses competing against each other (and others) for purse and pari-mutuel wagering purposes.

9. Federal Standards: None.

10. Compliance Schedule: Once adopted these rules can be implemented immediately upon publication in the State Register.

Regulatory Flexibility Analysis

1. Effect on Small Businesses and Local Governments: This rule making will have no negative impact on small businesses or local government. By increasing wagering opportunities with corresponding increase in wagering, there is the potential for monetary benefit to owners and trainers in the form of increased purses, and to local governments by increased off-track betting distributions.

2. Compliance Requirements: There are no reporting or record keeping requirements that will affect small businesses or local governments. In addition no additional licenses will be required by this rule making.

3. Professional Services: No services are required to comply.

4. Compliance Costs: This rule making will not require any additional costs to small businesses or local governments because it merely changes the coupling of thoroughbred horses for betting purposes.

5. Economic and Technological Feasibility: This rule does not impose any technological requirements on small businesses or local government.

6. Minimizing Adverse Impact: This rule will not have any adverse impact on small businesses or local governments because it merely removes the existing coupling requirement and thus expands opportunities for owners and trainers.

7. Small Business and Local Government Participation: Comments were solicited from industry groups, including representative horsemen's associations. These associations (generally one per track) are membership organizations that include small businesses. No local government comments were solicited because the rules have no impact on local governments.

Rural Area Flexibility Analysis

1. Types and Estimated Numbers of Rural Areas: These rules will not affect any rural areas.

2. Compliance Requirements: This rule will not require any additional reporting or recordkeeping and no additional licenses are required and there is no need for professional service to achieve compliance.

3. Costs: These rules do not impose any additional costs in rural areas. These rules merely remove existing limitations on entries in pari-mutuel horse racing and thus provide additional wagering opportunities.

4. Minimizing Adverse Impacts: This rule proposal will not adversely impact any rural areas.

5. Rural Area Participation: Comments were solicited from industry groups, including representative horsemen's associations. These associations (generally one per track) are membership organizations that include small businesses in rural areas. No local government comments were solicited because the rules have no impact on local governments.

Job Impact Statement

These rules will not have an adverse impact on jobs because they only affect whether or not a horse must be coupled in a race for wagering purposes.