SPMOs Face Mandatory Certification

Regulators in 13 racing states announced Aug. 4 they will begin the lengthy process of requiring offshore wagering entities and secondary pari-mutuel operations—commonly referred to as SPMOs—to obtain certification from the Association of Racing Commissioners International before they receive approval to wager into pools.

The states are California, Colorado, Delaware, Illinois, Indiana, Kentucky, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, and Virginia.

Under the Interstate Horseracing Act of 1978, host racing commissions must approve wagering through SPMOs. The officials are seeking a date of Jan. 1, 2010, for collective implementation of the requirement. RCI, in a release, said the 2010 start-up will provide time for rule promulgation where necessary and for a “thorough background investigation of the entity, its owners, staff, and operations.”

“Today, nearly 90% of the money wagered in horseracing occurs away from the track and, in several cases, outside of the country with little or no regulatory review,” California Horse Racing Board chairman Richard Shapiro said in a statement. “For this reason, it is critical that the states regulating this sport know exactly who we are doing business with and that the integrity of the game is not jeopardized.”

Kentucky Horse Racing Commission executive director Lisa Underwood said the SPMOs would be certified at their own expense.

“Requiring certification of SPMOs by RCI is a necessary and vital component to ensuring the integrity of the pari-mutuel system and long overdue.” New Jersey Racing Commission executive director Frank Zanzuccki said. “I fully support this effort and will recommend adoption of the proposed regulation to the New Jersey Racing Commission later this fall.”

“We are pleased with the positive reaction we have received from some key industry players like the (National Thoroughbred Racing Association) and others,” RCI president Ed Martin said.

The RCI board of directors previously endorsed the SPMO certification program, will be governed by the RCI Wagering Systems Security Committee. Martin said other jurisdictions are expected to follow suit.

"We applaud the action undertaken today by RCI to certify secondary pari-mutuel organizations," NTRA president and chief executive officer Alex Waldrop said in an Aug. 4 statement. "This will lead to improved wagering transparency and integrity."