by Frank Angst

One of the country’s leading bettors told a Kentucky horse racing panel that the state could increase both the number of horseplayers who wager on the state’s races and the amount of money wagered by taking the lead on integrity issues.

Mike Maloney, who bets about $10-million a year on races from his Keeneland Race Course base, addressed Governor Steve Beshear’s Task Force on the Future of Horse Racing on Tuesday in Lexington. Maloney serves on a task force committee looking into integrity issues like pari-mutuel pool security, equine drug testing standards and enforcement, and backstretch security.

Maloney attended a National Thoroughbred Racing Association Marketing Summit on September 21 and was disappointed to hear little mention of improving integrity. Maloney believes such an initiative would increase handle more than any idea discussed at that summit, which included ideas such as added emphasis on televised Saturday racing and creating “horse racing standings.”

“I look at two things: make Kentucky a leader in regulation and oversight and make Kentucky more friendly with our simulcast signals. That would be the best marketing we could do,” Maloney said. “I can tell you, and I don’t know if the perception is fair or not, but Kentucky is not looked at as a leader in integrity because it has had some lax drug rules in the past.”

The task force plans to make recommendations to the governor by December, giving Beshear time to further shape those ideas before the General Assembly’s regular session in January. Task Force on the Future of Horse Racing Chairman Tracy Farmer, a Thoroughbred owner and Kentucky Horse Racing Commission vice chairman, assured Maloney there would be “no sacred cows.”

Maloney has documented problems with past posting in which stop-wagering protocol has failed, allowing bettors to wager after races start. He said too many industry leaders do not realize potential customers are not betting on racing and current customers have reduced play because of integrity issues.

“This is a very real thing. It’s important to players like me and it’s important to $2 bettors,” Maloney said. “I would like to see Kentucky market ourselves as the [leader in integrity.] Bettors would have faith in any race from Kentucky.

“I realize many of these issues are better taken on at a national level, but I sense a mood here. … If we do this, I think bettors will respond with increased play on Kentucky tracks.”

To make some of those ideas a reality, the state likely will need more money. Based on dollars per racing day, Kentucky does not spend half as much on regulation as racing states like New York, Pennsylvania, California, Florida, and New Jersey. Lisa Underwood, executive director of the Kentucky Horse Racing Commission, said the commission needs 23 more full-time and part-time employees and $1-million more a year in funding.

To generate that money, task force members are examining the amount of general fund dollars committed to the commission. While $13,308,919 was collected by the state in pari-mutuel taxes on racing in fiscal year 2008, only $504,200 (3.79%) was returned to the racing commission. The commission also generates funding through license fees and fines.

Most of the state’s pari-mutuel tax money is committed to breeding funds with small percentages going to the Kentucky Equine Industry Fund, Kentucky Equine Drug Research Fund, and Higher Education Equine Fund. Task force member Robert Lawrence, director of the Racetrack Management Program at the University of Louisville, said the percentage of taxes committed to the commission should be increased. Lawrence said such a change would benefit the horseplayers who actually generate the money.

Churchill Downs President Steve Sexton, who serves on the Task Force on the Future of Horse Racing, said with players like Maloney placing importance on the issue, it is clear action is needed.

“We had better be listening because they’re our livelihood,” Sexton said. “It’s going to require funding … but we can do that. Now is the time to act. If our customers are telling us this, we better act on it.”

Sexton pointed out that Kentucky racetracks pay about six different forms of taxes and perhaps appropriations of that money also could be examined.

Bob Vance, secretary of the Environmental and Public Protection Cabinet, said task force members have been working hard to meet the December deadline to present ideas to the governor.

The Task Force on the Future of Horse Racing also continues to examine the feasibility of building a equine drug-testing lab in the state. Kentucky Horse Racing Commission Chairman Robert Beck, who chairs a task force committee on the issue, said representatives from the University of Kentucky, University of Louisville, and the state’s economic development department will attend the committee’s next meeting. The two schools are being considered as possible project collaborators.

Frank Angst is senior writer for Thoroughbred Times