NTRA Awaits Consensus on Medication Issue

Unless horse racing first reaches industry consensus on medication reform, the National Thoroughbred Racing Association does not expect Congress to move forward on federal legislation that would change current, state-level regulatory oversight.

In a Sept. 12 meeting at Keeneland, NTRA president Alex Waldrop and Greg Means, one of the founders of Alpine Group, which works as a lobbyist for NTRA, updated listeners on horse racing's legislative efforts in Washington, D.C. Waldrop and Means talked about the industry's divide over proposed legislation that would have the United States Anti-Doping Agency regulate reformed medication policies that would prohibit race-day medication.

The Jockey Club has supported such federal legislation but, to this point, its efforts have largely been opposed by horsemen's groups. That opposition is particularly strong when it comes to prohibiting race-day furosemide (Salix, or commonly called Lasix), though 25 prominent trainers this year pledged to support ending race-day medication.

Waldrop said there are NTRA members who support medication reform and federal oversight of racing's medication polices, and members who oppose such changes. Without consent, the NTRA will not take a position, and Waldrop noted that, from a strategic standpoint, without industry consensus there is little chance federal legislation will become reality.

"If we're going to do anything federally, we're going to have to be an industry that's of one mind," Waldrop said. "It's always better for the industry to go with one voice and speak with one voice about anything that's being heard in Washington, D.C."

Means noted that when a divided industry comes before Congress, legislators typically avoid taking a side and bills fail to move. He noted that the gambling industry made some progress on federal legislation that would allow Internet poker until Las Vegas Sands owner Sheldon Adelson opposed that expansion.

Means said legislation aimed at ending the practice of soring in Tennessee Walking Horses appeared well-positioned until factions of breeders of those horses opposed the change.

Waldrop said if the racing industry does reach a consensus on medication, the NTRA will commit to advancing that agenda, whether it be at the state or federal level, or through private means. He encouraged the industry to have the debate and reach a decision rather than having a debate in Washington. He said airing of racing's problems at federal hearings has created public relations challenges for the sport.

Waldrop and Means also provided updates on current efforts to reform taxation rules on winning horseplayers and efforts to extend taxation rules favorable to Thoroughbred owners and farm owners that expired at the end of 2013.

The NTRA is working to change current rules that require federal tax reporting of racetrack winnings of more than $600, and immediate withholding from winnings of $5,000 or more, on winning wagers at odds of 300-1 or higher. The current focus involves lobbying the U.S. Department of Treasury to recognize that exotic wagers, which typically include multiple combinations, should be viewed as a single wager as opposed to many individual wagers.

Currently, a bettor who wheels a $1 trifecta might spend $36 for a ticket but the rule considers that ticket 36 individual $1 wagers, keeping the winning levels the player and tracks are required to report low ($600 and above). But if that wager were considered a single $36 bet, the reporting threshold would be much higher, in this example reaching $10,800.

Means said that when the rules were put in place, there were few exotic wagers offered in racing. Also, the industry believes putting such frequent reporting on the shoulders of the tracks is burdensome, and taking money out of bettors' hands is hurting wagering churn and is unfair compared with rules at casinos.

Means noted that in a single sitting a person could win $1 million at blackjack and the casino would not be required to report those earnings.

Seventeen members of the House of Representatives signed a letter delivered June 3 to the United States Department of Treasury calling for reforms on how the threshold is determined. Means said Alpine Group is meeting with Treasury officials. He said legislators continue to communicate their support for viewing such exotic wagers as a single bet.

"We're talking with other elected officials, meeting with members of the Treasury face to face to tell them that this is important," Means said, noting that they plan to continue the pressure until they receive a decision from the Treasury.

Alpine Group also is working to extend expired or expiring tax provisions for racehorses, including a provision to extend the three-year recovery period for race horses. Means said he believes there is a better than 50-50 chance that in December or in the first quarter of 2015 Congress will renew the provisions.

He said if that decision is made, it's 90% likely it will be retroactive to the beginning of 2014.

Waldrop and Means also discussed the current atmosphere surrounding legislation on Internet wagering, noting that rules that allow the industry to conduct pari-mutuel wagering online have held strong.