Cuts in Indiana Racing Subsidy Recommended

Indiana Inspector General also exonerated state's horse racing commission in report.

Following an attempt earlier this year by the Indiana legislature to reduce the amount of funds from slot machines at racetracks that are allotted to the horse racing industry, Indiana Inspector General David O. Thomas and attorney Kristi Shute issued a report making the same suggestion.

“Assuming that a continued subsidy to the horse racing community is deemed proper by the Indiana legislature, we respectfully recommend the legislature consider evaluating the amount of the subsidy and consider a monetary cap at pre-racino figures,” Thomas stated in the report, which was released Nov. 10.

The effect of such a reduction, which would require legislative action, would decrease horsemen’s funds from $58 million to $28 million.

Thomas and Shute issued the report following a 16-month investigation of the Indiana Horse Racing Commisssion. The investigation was launched mainly due to extensive complaints made to the inspector general regarding the way the IHRC processes complaints and issues disciplinary actions for rule violations.

Thomas stated in the report he had found no criminal code or ethics violations in the way the IHRC conducts its business. The report also indicates no wrongdoing of any kind by the IHRC, its commissioners, or its employees.

“We are extremely pleased to have received a completely clean bill of health from Indiana’s respected inspector general,” IHRC chairman Sarah McNaught in a statement. “His report confirms that the ‘persistent rumors of illegal activity’ giving rise to the investigation and related television and print stories are simply untrue.

“As commission chair, I understand that effective regulation does not win popularity contests. The commission has been charged with the responsibility to protect the integrity of a sport that is an important part of our national fabric. The betting public and the thousands of horsemen and horsewomen who play by the rules every day deserve no less.”

McNaught made no comment about the suggested drastic cuts in revenue to the horse racing industry.

In spite of finding no criminal or ethics violations within the IHRC, the inspector general offered several recommendations for the organization in order to “address the majority of the complaints, meritorious or unmeritorious we examined and prevent future complaints with an improved adjudication process.”

In the report, Thomas said the most frequent complaint he received regarding the IHRC adjudication process pertained to the executive director issuing additional fines for penalties in his preliminary report.

“We recommend the elimination or modification of the preliminary report procedure granted by promulgation to the IHRC executive director,” Thomas said. “We find this adjustment authority (preliminary report) continues to promote complaints of arbitrary action, and recommend the IHRC modify this adjudication process to remove the apparent arbitrariness of the enhanced penalty process.”

Thomas also recommended the commission staff compile and regularly update a log of all complaints and their dispositions and share the information with all its members.

One of the other recommendations made by the report ertained to inappropriate wagering. Currently, IHRC employees are allowed to wager at tracks other than where they are employed, and gaming officials are restricted from wagering only “while serving in an official capacity at a race meeting.”

Due to the volume of complaints the office received alleging inappropriate wagering, however, it recommended the IHRC restrict its employees from all wagering much like the Indiana Gaming Commission.

All of the suggestions made by the inspector general will be considered by the commission over the next several months. The inspector general’s full report and the racing commission’s response can be viewed here.