Mexico’s Caliente Group, which for years has battled sometimes intense scrutiny of its South American bookmaking operation, has completed the comprehensive due-diligence process of the Thoroughbred Racing Protective Bureau.
In making the announcement Jan. 12, Caliente said in a news release the resulting TRPB report gave the wagering entity a “clean bill of health.”
“We are pleased that the investigative and security arm of the Thoroughbred racing industry in North America thinks that we are a well run and professional company that complies with the law and works at maintaining a high level of integrity,” said Eduardo Hernandez, president and chief executive officer of Tijuana-based Caliente.
The TRPB, which is a division of the Thoroughbred Racing Associations of North America, conducted an exhaustive 11-month investigation into the Caliente operation in Mexico, TRPB president Frank Fabian told The Blood-Horse.
“It was voluntary on the part of Caliente and on the request of the TRA,” Fabian said. “It speaks to the lengths Caliente has gone through to demonstrate their willingness to show they are transparent, and that their operations are legitimate and above-board.”
Details of the report are not public documents, but are available upon request to member racetracks of the TRA and the Harness Tracks of America, as well as related government regulatory authorities.
Caliente, which has roots from the famed Mexican racing complex founded in 1916, detailed in its release the “significant steps” it has taken to “promote the integrity and transparency of our entire business operation.”
Included in Caliente's efforts were:
* The voluntary formation in August 2007 of an internal compliance committee headed by a former Federal Bureau of Investigation agent, Tim McNally, whose resume includes leadership of the legal department of the Hong Kong Jockey Club for five years.
* The institution in January 2008 of an “Anti-Money Laundering Program,” which included the hiring of U.S. audit firm Corporate Risk International.
* The agreement in January 2008 to voluntarily submit to the TRPB due diligence program, which Caliente said included a review of appropriate public records in both the U.S. and Mexico, as well as reviews of all public records for Caliente’s directors, including its owner, Jorge Hank Rhon.
“TRPB [had] been provided complete access to Caliente’s executive and managerial staff, operational and technology facilities, remote betting locations, and internal records as requested,” the Caliente release quoted from the TRPB report.
Allegations and rumors of questionable and/or illegal business practices have been connected to the Caliente name for decades, including mention in a provocative 2007 report by the New York State Inspector General on groups seeking the New York Racing Association franchise. Caliente, which through the years have repeatedly denied the allegations, was not among groups seeking the NYRA franchise, but its association with prospective suitors was discussed.
Caliente in recent news releases said it handles full-card racing programs from more than 50 U.S. and international tracks, including some operated by Churchill Downs Inc., Magna Entertainment Corp., and NYRA. Here is the current simulcast schedule posted on Caliente’s Web site.
Fabian said a total of eight entities have now completed the TRPB due-diligence process since July 2005, including both domestic and international operations. In addition to Caliente, others include: Capital Sports (Australia), European Wagering Services (Isle of Man), International All-Sports (Australia), International Racing Group (Curacao, now defunct), Lien Games (North Dakota), Premier Turf Club (North Dakota), and Royal River Racing (South Dakota).
Two prominent offshore rebate operations, Elite Turf Club and Racing & Gaming Services, are currently going through the process, Fabian said, with final reports scheduled to be available sometime during the first quarter of the year. Additionally, Beaumont Park, a horse racing and greyhound track under development in St. Kitts, is also going through the process.
Domestic operations going through the TRPB due-diligence process must provide a $40,000 deposit to fund the investigation, while international groups must submit a $60,000 deposit. Fabian said the final cost of the investigation can be higher or lower of the deposited amount.