Interim Joint Committee on Agriculture


Subcommittee on Horse Farming


Minutes of the<MeetNo1> 1st Meeting

of the 2012 Interim


<MeetMDY1> October 10, 2012


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Subcommittee on Horse Farming of the Interim Joint Committee on Agriculture was held on<Day> Wednesday,<MeetMDY2> October 10, 2012, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Damon Thayer, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Damon Thayer, Co-Chair; Representative Susan Westrom, Co-Chair; Senators David Givens, Dennis Parrett, Joey Pendleton, and Robin L. Webb; Representatives Royce W. Adams, Sara Beth Gregory, Tom McKee, Michael Meredith, David Osborne, Sannie Overly, Tom Riner, and Wilson Stone.


Guests: John Ward, Executive Director, Marc Guilfoil, Deputy Executive Director, Greg Lamb, Supervisor of Pari-Mutuel Wagering, Jamie Eads, Director, Breeders’ Incentive Programs, Dr. Mary Scollay, Equine Medical Director, Kentucky Racing Commission; Martha Murdock, Board Member, and Lance Bowman, Kentucky Arabian and Half Arabian Breeders Alliance; and others.


LRC Staff: Lowell Atchley and Marlene Rutherford.


Kentucky Horse Racing Commission

Representatives of the Kentucky Horse Racing Commission (KHRC), introduced by Marc Guilfoil, provided a review of their respective divisions. Greg Lamb provided a brief overview of pari-mutuel wagering including the importance of the regulatory pari-mutuel oversight, a function new to the Racing Commission. Jamie Eads provided an update on the Breeders’ Incentive Fund Program, which includes the thoroughbred, standardbred, and non-race breeds. Dr. Mary Scollay, the KHRC’s Equine Medical Director, talked about the health and safety of horses and the programs developed to enhance those initiatives. John Ward, Executive Director, discussed the current status of horse racing in Kentucky and elsewhere.


Responding to Co-Chair Thayer regarding advance deposit wagering (ADW) reporting and transparency, Mr. Lamb indicated that the third quarter was complete and not all numbers were available, but in the second quarter of ADWs, Kentucky residents wagered $47,663,022. Bettors are identified by ZIP code when accounts are established for each ADW to determine whether the jurisdiction allows ADW. The type of betting is not legal in every state. KHRC is working toward a new set of guidelines that would require ADW sites to track the amounts wagered by Kentucky residents through the system, plus other data.


Co-Chair Thayer asked when the subcommittee and the Committee on Licensing and Occupations could expect to receive a summary of ADW data. Money wagered at Kentucky races has a pari-mutuel tax applied, with a portion of that tax benefiting the Kentucky Thoroughbred Development Fund (KTDF). The ADW wager does not have a tax applied, and therefore no money goes into the KTDF. A breakdown of the numbers would provide a more complete picture of how much a 1 or 1 1/2 percent surcharge could generate, with the proceeds to be dedicated to the KTDF. Co-Chair Westrom indicated it would be interesting to see how other states are benefitting from ADW.


According to Ms. Eads, the thoroughbred market is in a flat year, with the number of mares to be bred estimated at 15,000, compared to 15,918 last year. Kentucky continues to lead North America in breeding statistics, according to Ms. Eads. In addition, she discussed the Standardbred Incentive Fund, the Kentucky Sire Stakes, and the Non-race Incentive Fund, which had 11 participants this year.


Ms. Eads commented to Co-Chair Thayer that over $76 million has been distributed back to successful breeders of winning thoroughbreds, and over $100 million combined has been distributed to those involved with all three breeds.


Representative Overly asked if the Commission could provide the statistics on breeders Ms. Eads referenced in her presentation so that all legislators could be informed about the importance of the industry to Kentucky. Representative Westrom asked if the KHRC could provide a package of Ms. Eads’s horse industry information to help educate new legislators elected in November of the information.


Co-Chair Thayer applauded the KHRC for the administrative regulation that allows Kentucky breeds raced overseas to participate in the Thoroughbred Breeders’ Incentive Fund. Kentucky is an export state in the thoroughbred business, and continues to be the market share leader in the country in terms of mares bred. Kentucky is holding its own in the face of competition, and competitor-states are facing their own challenges.


Dr. Scollay said that since Kentucky hosts the most prestigious horse race in the world in May (the Kentucky Derby), the public expects that races are conducted with integrity, that the competition is fair, that the outcome of races is not impacted by illegal performance enhancing medications, that only healthy horses compete, that races will be run safely, and that horses will be protected from injury.


Dr. Scollay described the race horse testing process in Kentucky, which involves random sampling and targeted sampling based on horses’ standings and performances in races. KHRC utilizes HFL Sport Science Laboratory in Lexington to analyze samples.


Representative Osborne encouraged subcommittee members to tour the operation of the HFL Sport Science facility, which provides drug surveillance, doping control, and research for human and equine sports.


In response to comments and questions by Senators Pendleton and Parrett, Dr. Scollay described how horses are sampled. All winners are sampled. A wild card sample comes from a steward special, which may be in response to particular information, a horse may run better or worse than in past races, or a trainer may have an unusually high winning percentage. Dr. Scollay said stewards are required to select a minimum of one horse for a steward special.


Dr. Scollay explained Lasix has not been outlawed. Rather, the Commission has withdrawn the use of adjunct bleeder medications or medications that have no substantial or scientific evidence to support their use.


In response to a question by Representative Westrom, Dr. Scollay said the use of nutraceuticals or supplements is evident in most equine disciplines, especially athletic horses, and is problematic in the racing industry because, since they are not regulated by the U.S. Food and Drug Administration, the content of the products is unknown and uncertified. There are risks for trainers administering them to race horses being readied for races. The agency has attempted to convey that information to the trainers because of the quality control. Herbal supplements may vary from packet to packet in the percentage of active ingredients, and the active ingredient could result in a positive test. Horsemen need to exercise caution when they do not have certainty of the content.


Mr. Ward stated that with the initiatives by the legislature and KHRC over the last few years in the selling of horses and the purity and trustworthiness of the “betting signal,” the industry has had to change to be successful. As a result of changes, state officials are more aware of what is going on in the betting community than most other racing states. The next level to be addressed is security. The goal is for Kentucky to have a type of horse racing that can be sold around the world as the premier product.


Co-Chair Thayer noted that treatment with Lasix will continue to be an issue, and that the welfare and integrity issue will continue to define equine sports, racing, and showing.


In response to a question from Representative Riner concerning the use of human medications on horses, Dr. Scollay said that some medications are okay when a horse is ill leading up to a race, but in the interval closer to a race, the drugs are not permitted. There are medication guidelines. Some over-the-counter human pain medications are not approved for use in horses. Amphetamines are stimulants and are strictly prohibited.


In closing remarks, Mr. Ward, noted that 2014 will be next year that Kentucky can host the Breeder’s Cup in Louisville. The Commission will help pursue that series of thoroughbred races.


Kentucky Arabian Horse and Half Arabian Breeders Alliance

Martha Murdock and Lance Bowman, representatives of the Kentucky Arabian Horse and Half Arabian Breeders Alliance (KAHABA) discussed the Arabian breed association, the history and heritage of the breed, uses of the horse, including showing, endurance racing, and pleasure riding, and characteristics of the breed; and talked about the Kentucky Quarter Horse, Appaloosa and Arabian Development Fund, which was established about four years ago through the Kentucky Breeders’ Incentive Fund Program to promote, enhance, improve, and encourage breeding in Kentucky by providing supplemental purses for designated races. Money is allotted to breeders for showing, endurance, and racing. A total of 57 horses have been registered this year, an increase from 49 last year. A total of 52 horses are expected to earn points by the end of this year, according to the speaker. Mr. Bowman indicated that over 70 percent of the horses are sired by stallions in Kentucky.


In response to a question from Senator Webb, Ms. Murdock indicated that the KAHABA sets the rules and standards and is the umbrella organization for the breed in Kentucky.


In response to a question by Representative Osborne, Ms. Murdock indicated that the national show horse registry still exists and has a strong youth program and program for the saddle-seat division, although the breeding has declined. Mr. Bowman said that the Arabian is one of the few breeds accepted into the warm blood registry.


In response to a question by Representative Stone, Ms. Murdock said the American Endurance Ride Conference governs all approved endurance racing. Distance divisions include 25, 50, 75, and 100 miles, which is the maximum distance. Endurance racing is very popular in South America.


In response to a question from Co-chair Thayer regarding the number of Arabian horses in Kentucky, Mr. Bowman indicated it is difficult to compile this statistic because of the way the horses are registered whether by the Kentucky address or an address in another state. At this time, there are over 8,000 Arabians. Also, $13,500 was the maximum received from the Breeder’s Incentive Fund Program for the breed, and the total paid out last year was just over $48,500.


The meeting adjourned at about 11:45 a.m.