Lobbyist: Federal Drug Reform Action Unlikely

Lobbyist: Federal Drug Reform Action Unlikely
Photo: Anne M. Eberhardt

Advocates for change in horse racing didn't find much reason for optimism in the National Thoroughbred Racing Association's legislative update held in Saratoga Springs Aug. 7.

The presentation from lobbyist Greg Means, founder and principal of The Alpine Group in Washington, D.C., reviewed current legislation or proposals that pertain to racing. Included were bills covering the ways gamblers' winnings are reported and taxed, the acceleration of depreciation of Thoroughbreds for tax purposes, which expired at the end of 2013, and medication reform. 

Means assessed the viability of federal intervention into the regulation of medication in racing, specifically a bill that would install the United States Anti-Doping Association as the regulator to develop guidelines and rules regarding medication use.

"What I think is going to happen to this bill," he said, "is nothing." 

Drawing on his experience as a Congressional staffer and a lobbyist, Means said that legislators are, in cases in which an industry is divided, more likely to push the matter back to industry stakeholders to find compromise than to take any action.

He also pointed to the relatively little time that Congress is in session before the November elections, suggesting that legislators will use that time to take care of high-priority issues and getting re-elected. Following the election will be a lame-duck session in which, he predicted, niche issues are unlikely to be addressed.

"It is more difficult," he said, "for controversial, divisive bills to get activity."  

The same obstacles stand in the way of revising tax laws that currently require gamblers to fill out tax forms at the time they collect their winnings and, in some cases, require tracks to withhold tax obligations at the time of the pay-out. While Means was not optimistic that Congress would pass a tax reform bill to eliminate the withholding, he and fellow lobbyist Lauren Bazel worked with 17 members of Congress from both parties on a letter to the Department of the Treasury. The letter asks that the 1970s laws that govern withholding practices be changed to more accurately reflect contemporary wagering.

"These rules, which were formulated in the 1970s, do not apply to today's wagering product," he said. "The most exotic wager you had then was the daily double." 

Characterizing the law as "outdated, archaic, and anachronistic," Means said that the letter asks the Department of the Treasury to redefine the cost of a wager or a bet, taking into account the cost of the entire wager that triggered the reportable winnings, not just the individual bet.

"The cost of the ticket," he said, "is the cost of my investment." 

On the accelerated depreciation of Thoroughbred horses from seven years to three years, a provision that expired last year, Means was "optimistic" that an extender would be filed, retroactive to the beginning of 2014.

While declining to take a stand on medication proposals, NTRA president and CEO Alex Waldrop said that he thought it was "vitally important" for the industry to come to consensus on medication issues. He acknowledged that it would be a "daunting task." 

"If we don't come together around a solution that the vast majority of us agree to," he said, "it's very difficult to move the issue forward." 

Waldrop also serves as the chairman of the Racing Medication and Testing Consortium, which has proposed a four-pronged approach to national medication reform. He emphasized the importance of adoption of the RMTC's model rules by all 38 racing jurisdictions in the United States.

Means' assessment of the likelihood of federal intervention into horse racing came three days before The Jockey Club's annual "Round Table Conference on Matters to Pertaining to Racing." The Jockey Club has on several occasions threatened to advocate for federal oversight if the racing industry does not enact what The Jockey Club sees as necessary reform regarding the use of medication. It has advocated for the elimination of the raceday use of furosemide.

Last week, a group of 25 prominent North American trainers released a proposal calling for a ban on the use of furosemide in 2-year-olds in 2015 and in all horses in 2016. 

While The Jockey Club has so far been silent on the trainers' proposal, in June the organization called for a study that would examine the timing of the use of furosemide in preventing exercise-induced bleeding.

Means' assessment that federal action into horse racing is unlikely could be seen as a blow to The Jockey Club's advocacy for reform and a boon to those who support the continued use of furosemide. 

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