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Most racehorse people give this state government agency little thought. They simply pay the fee to obtain an Ohio State Racing Commission (OSRC) license, grumble about the additional fingerprinting fee, and then go about their business of racing horses.
However, it is time for racehorse people to stand up and realize that this agency is very important and how it conducts itself can and will affect all racehorse people across the state of Ohio. Furthermore, it is important as a racehorse person to educate yourself on how it works, where the money comes from, and who the people are governing the commission.
The role of the OSRC is to serve as the official governing agency of Ohio’s horse racing industry. This includes the prescription and enforcement of the rules, regulations, and conditions under which pari-mutuel wagering on horse races are conducted in Ohio. The mission of the OSRC is to promote and regulate horse racing in the state of Ohio.
The OSRC meets it’s goal of promoting horse racing in Ohio by providing purse fund subsidies to racetracks. They feel these funds, will lead to a higher quality of competition as the higher purses will encourage horse breeders in the state, to breed better horses. However, the majority of the commission’s resources are dedicated to the regulation of the horse racing industry in Ohio. It is responsible for governing Ohio’s seven commercial racetracks (3 Thoroughbred running tracks, and 4 Standardbred harness tracks), two satellite wagering facilities (the off track betting parlors in Sandusky and Mansfield), and seventy-three county fairs.
The commission consists of five members, including a chairman, who are appointed by the Governor of Ohio for 4-year terms. They are not elected. These members are generally picked by the Governor from the horse racing industry, but cannot be associated with or have a legal or beneficial interest in pari-mutuel meetings. The OSRC also employs a regular staff of 32 full-time employees, and 3 part-time employees, that include an executive director, three investigators, and they contract with 11 other employees to serve at racetracks as state stewards (who work at running tracks), presiding judges (who work at harness tracks), and state veterinarians who are assigned to both types of racetracks. The Ohio State University Analytical Toxicology Laboratory (OSU Lab) is contracted, at 1.38 million dollars in 2003, to be the official laboratory of the Racing Commission.
The OSRC annual budget is approximately 30 million dollars that is funded soley through license fees, permits, and a percentage of moneys wagered on all races in the state (a share of the horse racing wager tax) except those races sponsored by county fairs and agricultural societies. Another source of funding is the bond deposits from the Bond Reimbursement Fund (the Bond Reimbursement Fund was established in 1986 for the instance when an OSRC licensee who has been formally charged with violating a specific OSRC rule decides to appeal that charge. Individuals who appeal Racing Commission rulings must deposit a bond with the commission, and this fund receives those deposits and cash bond deposits from permit holders).
Perhaps the best way to understand a government agency such as the OSRC is to break it down into it’s major components and focus on what those parts do and how they work. So we’ll look at the Leadership of the Commission, the Administrative and Operating component, the Ohio State University Analytical Toxicology Laboratory, Simulcasting, Quarterhorse Development Fund, Standardbred Development Fund, and the Thoroughbred Race Fund.
COMMISSION LEADERSHIP
The OSRC is lead by five members appointed by the Governor. The members are compensated at the rate of $21.73 to $40.07 per hour. Recently, the commissioners have come under increasing scrutiny by members of the horse racing industry and the general public as the issue of allowing slot machines at commercial racetracks in Ohio becomes a highly debated subject in the state. So it is only appropriate to take a closer look at the individuals running the OSRC. In alphabetical order the current racing commissioners are:
NORMAN BARRON term April 2003 - March 2007
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Mr. Barron is no stranger to the issues facing horse racing in Ohio and across the nation. At the 2001 Annual Symposium on Racing he made the following telling statement:
My name’s Norman Barron, I’m the vice chair of the Ohio State Racing Commission. I’ve been a racing commissioner for approximately 20 years and a past chairman of RCI. Steve, you opened with your question to Mike which was, why can’t we have uniform rules when everyone in the industry is demanding it? And of course the history of uniform rules, RCI began a system approximately 20 years ago of recommended uniform rules for medication. Problem is, how do you get the individual states to adopt them? We have a very excellent body of recommended uniform rules, but unfortunately individual states, individual state regulators tend to be very provincial and get back to their own state, within their own safe havens, everyone thinks that what they’re doing is the best thing to do, and consequently you have these variations, which if you had them in sports, for example, if the Boston Celtics came to Ohio and they got eight personal fouls instead of six for a person to foul out, and Cleveland Cavaliers go to Pennsylvania and you only got three, you’d have people in basketball screaming and yelling. There of course is a very simple and easy way to get uniform medication rules, and that’s to federalize them. I don’t think that’s the way we want to go. But I think what the industry needs to do is put enough pressure on the regulators to delegate the responsibility of approving the uniform system to some recognized overseeing body, maybe a combination. And I think that’s our best hope of going forward.
SCOTT BORGEMENKE term April 2003 - March 2007
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Currently, he is president of Strategic Policy Advisors, a Columbus based public affairs, government relations, and campaign consulting firm. He is also a professional Ohio lobbyist. In 2003 he is an active lobbying agent for 16 companies, or associations: among them are American Insurance Association, Greater Cincinnati Chamber of Commerce, IBM Corporation, J.P. Morgan Securities, Ohio Association of Broadcasters, the Proctor and Gamble Company, and the University of Akron.
Furthermore, he was hired in the Spring of 2003 by the owners of Ohio’s seven racetracks and Ohio’s horsemans associations as a political consultant to help form a political association, the Ohio Horse Racing Council, to lobby for slot machines in Ohio. However, he had to resign as their lobbyist when he accepted the appointment from Governor Taft to the OSRC.
Governor Taft is publicly against slot machines in Ohio, but quietly put a powerful lobbyist in a position to help get slots in Ohio. Maybe the next time the Governor comes to Delaware for the Little Brown Jug, we should cheer him instead of jeering him. Borgemenke could prove to be a valuable asset to the horse racing industry while he serves on the commission.
C. LUTHER HECKMAN term April 2001 - March 2005
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Mr. Heckman lives in Dublin, Ohio and is a lawyer with his own private law practice, specializing in Energy and Public Utilities Law. He has served as chairman of the Public Utilities Commission of Ohio and as the Executive Director and General Counsel to the Coalition for Environmental Energy Balance. He is also a professional lobbyist in Ohio, acting as a lobbying agent in 2003 for Kraft Foods, Philip Morris, and Ohio Council of Retail Merchants. Prior to that he worked for the Speaker of the Ohio House.
In 1999 Mr. Heckman testified to the Ohio General Assembly on behalf of the Coalition for Choice in Electricity, an advocacy group for large industrial and business energy users, as a "technical expert" delivering the message: break your promises, forget fairness, then let the courts decide.
Fred Noe, Executive Vice President of the United States Trotting Association, had this to say about Mr. Heckman:
No racing commissioner that I know of tries harder to be fair, impartial or informed than Mr. Heckman. I am quite certain that not all of his views and decisions are universally applauded, but you can never accuse him of not caring, and not using his innate intelligence to arrive at what he always considers to be best for the individual and the sport.
JOHN N. MEEKS term April 2003 - March 2007
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He is a professional Ohio lobbyist and in 2003 is an active lobbying agent for American Wealth Preservation Group, Gustafson, Baxter Financial Services, Care Source, and Fresh Mark, Inc. The 1954 graduate of Ohio University is also very active in civic affairs and charitable fund raising.
LORRAINE "RAINY" STITZLEIN term April 2001 - March 2005
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He also built the sports-marketing and celebrity management firm: Eddie Elias Enterprises based out of Akron. Ms. Stitzlein joined her father’s business in 1958 and soon became it’s executive vice president and business partner. Eddie Elias Enterprises represented such athletes as bowlers Don Carter and Carmen Salvino, golfers Fuzzy Zoeller and Chi Chi Rodriguez, basketball player Rony Seikaly, and a host of celebrities like Danny Thomas, Marlo Thomas, Phil Donahue, Phyllis George, and Ralph Nader. In 1969 she invested in a mink fur manufacturing business in New York and formed the now defunct Rainbow Furs, Ltd.
Ms. Stitzlein is a 1948 graduate of the University of Akron and served nine years as Chairwoman of the Board of Trustees.
Rainy has demonstrated steadfast and courageous leadership in every role that she has been asked to fulfill, said University President Marion A. Ruebel. The University has benefitted from her dedication, generosity and love.Both Stitzlein and her late husband, Harry, have been loyal supporters of Akron University for more than 50 years. She also was a past president of the Alumni Association’s National Board of Directors.
Her community service record includes serving on the boards of such organizations as the John S. Knight Center and Northeastern Ohio Universities College of Medicine. Her professional affiliations have included New York City’s Memorial Sloan-Kettering Cancer Center, Edwin Shaw Hospital, and the Summit County Unit of the American Cancer Society.
Ms. Stitzlein was inducted into the Pro Bowlers Association Hall of Fame, under the category of Meritorious Service, in 1980 for her help and work in the development of the organization.
ADMINISTRATIVE and OPERATING
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This component of the OSRC also employs three investigators to police the seven commercial racetracks. The investigators work closely with state stewards and presiding judges at the racetracks. They also monitor and examine computer printouts detailing betting patterns within the state, and investigate any public complaints related to the outcome of races. Another responsibility of the investigators is to search stables when it is felt there is a strong possibility that illegal activities have been occurring within the stable area.
Also, in Columbus, the commission tracks the flow of wagering dollars in Ohio to ensure that racetrack owners comply with wagering laws. It conducts a yearly audit of the bank account records, receipts, and payments of the permit holder selected as Ohio’s collection and settlement agent. Furthermore, the OSRC investigates when a racetrack or the collection and settlement agent fails to collect, pay, disburse, or account for money and fees. When necessary, the commission must enforce payment, collection, and settlement.
The 11 regularly contracted employees, are considered purchased services, budgeted at 2.3 million dollars in 2004. They are the state stewards, presiding judges, and state veterinarians working at the commercial racetracks that help regulate the racing industry. The stewards and presiding judges represent the OSRC at the racetracks and act essentially as "referees". The veterinarians are responsible for collecting the samples to be tested for illegal or prohibited drugs, both equine and human. Following each pari-mutuel race the state veterinarian must collect a test sample of the winning horse’s blood and/or urnine for the purpose of analysis. These samples are then sent to the Ohio State University Analytical Toxicology Laborartory (OSU Lab) in Columbus, Ohio.
THE OHIO STATE UNIVERSITY ANALYTICAL TOXICOLOGY LABORATORY
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Ohio State’s Dean Glen Hoffsis made a presentation related to research projects undertaken during academic year 2002-2003 at the university. (This item was taken up as item #3.) Dean Hoffsis also introduced Dr. Steve Reed, Dr. Alicia Bertone, Dr. Ken Hinchcliff and Dr. Saval. Each gave a brief synopsis of their involvement with the research projects conducted at OSU and expressed the need to continue receiving the research grants. After the presentations, there was a brief question and answer session.Request by Ohio State University College of Veterinary Medicine for $100,000 from the Ohio Thoroughbred Race Fund for research, pursuant to Section 3769.083 of the Ohio Revised Code. Upon motion by Chairman Heckman, second by Commissioner Meeks, the motion passed 4Ð0. Commissioner Borgemenke abstained. Mr. Theno expressed his concern with the unequal share paid by the thoroughbred industry as opposed to the harness industry to OSU. Chairman Heckman advised Mr. Theno to take this topic up at the thoroughbred and standardbred budget meetings. Commissioner Borgemenke had questions regarding funding programs from the Commission budget. Chairman Heckman advised that a report has been submitted by staff member Rick Williams. It appears that next years Ohio Thoroughbred Race Fund Program may need substantial restructuring.
SIMULCASTING
Another major component of the OSRC is that of simulcasting races. Simulcasting is the process of presenting horse races from racetracks other than the one where live racing is being featured. By simulcasting races from other venues, a track can present more races to patrons to wager upon, thereby increasing revenues for the track and the state of Ohio. Since allowing simulcast racing in Ohio in September of 1996, the commission’s responsibilities and duties have increased dramatically: the tracks are open longer in the day, and they are open more days out of the year. In fact, while there are less than 200 live racing days per year at each track, most Ohio racetracks are open greater than 360 days per year.
QUARTERHORSE DEVELOPMENT FUND
The Quarterhorse Development Fund provides Quarterhorse race purse subsidies for Ohio’s two days of Quarterhorse racing action. During the annual Quarterhorse Congress, held in Columbus during the month of October, there are two days of quarter-mile racing at the Thoroughbred track, Buelah Park, in nearby Grove City, Ohio. One day is dedicated to time-trials for a Futurity race, a Derby race, and a Maturity race. Then approximately two weeks later another day of racing is held in which the finals for the afformentioned races are run.
STANDARDBRED DEVELOPMENT FUND
The Standardbred Development Fund provides purse subsidies for the Ohio Sires Stakes series of races. This fund helps to encourage Standardbred breeding and harness horse racing in Ohio. Contributions out of this fund are also made to the OSU Lab for research and post race testing. It also provides funding for one full-time-equivalent employed by the Racing Commission.
In 2004 a new resposibility for the OSRC is the collection and disbursement of money for the Ohio Sires Stakes program; it was previously the responsibility of the Ohio Harness Horseman’s Association. The Ohio Sires Stakes racing program was among the changes the Legislature made in 1974, just after the Ohio Lottery was instituted and the lottery started to draw business away from Ohio’s racetracks. Corwin Nixon, owner of Lebanon Raceway, and a former state representative for 30 years and House minority leader for 12 of them, said then-Governor James Rhodes came up with the idea for the racing program to help the tracks and the harness horse racing industry.
The Standardbred program is funded by 1.125% of pari-mutuel wagering on harness racing, plus one-twelfth of exotic wagering revenue from harness racing.
THOROUGHBRED RACE FUND
The Thoroughbred Race Fund provides purse subsidies for various overnight/stake races, and supplements purses for races open to Ohio registered Thoroughbreds. It also provides money for broodmare and stallion awards given to Ohio breeders of outstanding Thoroughbred horses. It also funds a majority of the equine research conducted at the OSU Lab. In addition this fund pays for two full-time-equivalents employed by the Racing Commission.
This Thoroughbred program is funded by 1.125% of pari-mutuel special account wagering on Thoroughbred racing, and 0.71% of pari-mutuel wagering on commercial harness racing, plus one-twelfth of exotic wagering revenue from Thoroughbred racing.
While the major components of the Ohio State Racing Commission have been touched upon, there are still many parts that have not been reviewed and the reader is encouraged to take it upon themselves to further educate themselves on the intricacies of the agency.
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