AN OVERVIEW OF THE
REGULATORY STRUCTURE
1.
Racing is a regulated industry:
• state Legislatures create STATUTES that define the goals and
limits of regulation;
• state RACING COMMISSIONS are created by the statute;
• Racing
Commissions are ADMINISTRATIVE LAW agencies with the delegated authority to
MAKE RULES, ENFORCE THE RULES and ADJUDICATE RULE VIOLATIONS;
• Racing
Commissions embody the three functions of government ‑ LEGISLATIVE,
EXECUTIVE, JUDICIAL ‑ with the legislative and judicial embodied in a
QUASI manner,
industry
sectors play an important and active role in defining the what and how of the
regulation;
• the
racing statute and the administrative rules of racing are just the most obvious
parts of the LEGAL WEB that enfolds racing ‑ other federal laws, state
statutes and laws and municipal laws make up the rest of the web.
2.
State Legislatures generally include common goals in the statute:
• to encourage and support the racing and breeding industries;
• to provide a uniform standard of conduct;
• to protect the well being of the racing stock;
• to provide revenue to the state; and
• to protect the betting public from fraud.
3.
State Racing Commissions are bureaucracies organized to carry out the
legislature's directions. The attached charts give a general view of what these
organizations look like.
4.
The basic tool used by a racing commission to establish its regulatory control
is LICENSING.
4.1. Track Level
a.
Corporate Licensing ‑ the corporation that will operate the track and the
individuals who control the corporation must be revealed to the state;
background checks are carried out to ensure full disclosure has been made
regarding financial interests and criminal records. The license grants the
authority to operate a track and offer pari‑mutuel betting.
b.
Employee licensing ‑ every employee of the track must be licensed and
approved to work in a defined position; background checks and fingerprint
checks are used. The license creates a means of ensuring that employees meet an
expectation of personal integrity before serving the betting public.
4.2. Participants
Every
owner ( individuals, corporation, stable etc.) , trainer, jockey/driver,
groom/hotwalker, official etc‑ must be licensed. Personal disclosure is
verified by fingerprint and background checks. Some positions also require a
test of professional knowledge and conduct. The license links the participant
to the code of conduct encoded in the rules of racing.
5.
Why so much Licensing?
5.1. Integrity/ Professional Standards
The
industry and the state can set the standards of personal and professional
conduct the will help ensure that the betting public can bet with confidence
and trust. Participants are provided with a code that will help ensure that
they can compete on equal footings.
5.2. Discipline/ Penalties
Licenses
create a means of enforcing the code of conduct ‑ applicants agree to
abide by the rules and to accept the proscribed penalties for violations.
Failure to accept ( pay/serve) the penalty results in license suspension and
cessation of contact with the industry.
5.3. Control of the Product
The
corporate license in particular, through the race date allocation, helps
control the nurturing of the industry by ensuring all sectors have input into
the basic business decision of when and who operates.
5.4. State Revenue
Licenses gives the state an alternate source of fund besides the tax on betting.