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Minutes of Public Meeting - December 7, 2021

Commission Members Present:

Michael Algeo
Tom Winebrener
David Hayden
Thomas Bowman
Emmet Davitt
Tammy Lafferty
Konrad Wayson
Clarissa Coughlin
Ernest Grecco

Members Absent:

Staff Present Representing the Maryland Racing Commission:

J. Michael Hopkins

Executive Director
Eric B. London
Assistant Attorney General

In accordance with §3-302, General Provisions Article, Annotated Code of Maryland, the Maryland Racing Commission (“Commission”) met live and by conference call in open session at 12:30 p.m. on December 7, 2021 at Timonium Race Course. Prior to the meeting, Chairman Michael Algeo informed the public that were participating by conference call that their phones should be muted, but he would give the public the opportunity to address the Commission during Public Comments. At the start of the meeting, Chairman Algeo took a roll call of the Commission members and verified that all members were present.   Commissioners Lafferty, Davitt and Coughlin were present via conference call. Chairman Algeo thanked Timonium Race Course for inviting the Commission to the Fairgrounds.  Chairman Algeo also asked that everyone take a moment of silence for those men and women (2,043) who had lost their lives 80 years ago at Pearl Harbor and all other members of the military who continue to serve.

Minutes – October 28, 2021

The Commission waived a reading of the minutes of its October 28, 2021 meeting and voted unanimously to approve the minutes.  

Introduction of George Doetsch, Jr.

Executive Director J. Michael Hopkins introduced George Doetsch to the Commission as the liaison between the Lottery Commission and the Racing Commission. Chairman Algeo welcomed Mr. Doetsch.

Running of a Race – Judgment Calls.

Chairman Algeo commented that he has developed a high regard for the stewards and judges and their abilities to perform their jobs since serving on the Commission. Having been informed of the polices in other states where judgement calls are not appealable to Racing Commissions, Chairman Algeo asked why Maryland racing was so different from other sports, i.e. baseball, football, basketball or hockey, where a call on the field or court is final. Moving ahead, Chairman Algeo commented that the Commission might consider following the policy of other jurisdictions, where the race decisions of the steward or judges are final.  Chairman Algeo asked those affected by a potential change in policy to send their written comments to the Executive Director.

Maryland Bred Race Fund Advisory Committee.

Executive Director J. Michael Hopkins reported that the Maryland Bred Race Fund Advisory Committee had met and was making four recommendations to the Commission to further the breeding industry. The first recommendation was to leave the 30% breeder and 10% stallion bonuses at the same level for the next 6 months on all overnight races. Hearing no objection, the Commission unanimously approved the recommendation. Second, the Committee was recommending breeder and stallion awards in stake races be increased to 30% and 15% respectively. Hearing no objection, the Commission unanimously approved the recommendation. Third, the Advisory Committee was recommending paying an additional 10% to the winner of a maiden race if the horse is Maryland-Sired and Bred. Hearing no objection, the Commission approved the request.

Fourth, the Committee was recommending a two-tiered bonus system beginning with Maryland Bred foals of 2023, which would incentivize mare owners to breed to Maryland stallions. The proposed bonus for the tiered system would give a 35% bonus to a Maryland sired and bred and 25% to a Maryland bred. Commissioner Hayden, who is the Chairman of the Advisory Committee, objected to the two-tiered system and asked to make a presentation to the Commission with Commissioner Bowman. Commissioner Hayden provided a brief history of the Maryland Bred Fund, in particular the program that has been in place for the previous 8 years. Commissioner Bowman commented that the program was created in a fair and equitable manner for all stakeholders and from time to time has been adjusted. Commissioner Hayden commented that one of the better changes was the introduction of the recent developer bonus. Commissioner Hayden also explained that the two-tiered system is also being used in Pennsylvania, but, in Commissioner Hayden’s opinion, was not successful.  Commissioner Hayden indicated that the Maryland program, as currently constituted, is not struggling whereas Pennsylvania breeding program is struggling. Commissioner Hayden expressed his concern over the sustainability of the proposal. Commissioner Bowman agreed with Commissioner Hayden that the two-tiered system being used in Pennsylvania is not accomplishing its goals.  Chairman Algeo thanked Commissioners Hayden and Bowman for their presentation and invited Cricket Goodall and Richie Blue of the Maryland Bred Fund Advisory Committee to respond.

Richie Blue, President of the Maryland Horse Breeders Association, explained that the Breeders reviewed a number of programs nationally and concluded that the most advantageous program would be the two-tiered system. Craig Gegorek of Gegorek and Company, the accounting firm that reviews the financial status of the Bred Fund, commented that revenue for the two-tiered program has been derived from a carryover of excess funds from previous years when conservative projections were being made as a result of Covid. Mr. Gegorek explained the carry forward over the past few years has accumulated to approximately 1.5 million dollars. Cricket Goodall commented that the Bred Fund must be careful in projecting revenues, since the Fund is not permitted to expend more than it receives and that the primary purpose of the Advisory Committee is to prevent that from happening. In this case, the Advisory Committee unanimously supported the two-tiered proposal. Ms. Goodall further explained that the entire argument for supporting Maryland stallions is the basis that was used to promote the horse industry to the legislature and that without the stallions, the open spaces provided by the farms may disappear. Chairman Algeo asked for clarification if the Advisory Committee had met and unanimously endorsed this recommendation. Ms. Goodall responded that the Committee had met and did vote unanimously to recommend this proposal. A motion was made to adopt the recommendation by Ernie Grecco, seconded by Emmet Davitt, and approved by a vote of 5 to 3, with Commissioners Bowman, Wayson and Hayden dissenting.

Maryland Standardbred Race Fund Race Dates 2022.

The Commission was presented with a request for the 2022 race fund race dates. Hearing no objection, the Commission unanimously approved the 2022 Race Fund dates.

Proposed Regulations 09.10.01.86, .91, 09.10.02.60 and .62.

Executive Director J. Michael Hopkin provided the Commission with proposed amendments to wagering regulations, which were technical corrections on how pay outs of certain pools would be made to patrons.  Hearing no objection, the Commission unanimously approved the requests.

Maryland Jockey Club – Change in Racing Schedule.

Executive Director J. Michael Hopkins explained to the Commission that when Laurel Park had originally requested its live racing dates it had December 25 as a dark day. Subsequently, Laurel Park has contracted to host South American races that day on its network and were amending its schedule and adding an additional day of live racing on December 27th at the request of the horsemen. Hearing no objection, the Commission approved the request.

Ocean Downs Ownership Structure and Update.

Executive Director J. Michael Hopkins explained to the Commission that he had received a notice from Ocean Downs that Churchill Downs, Inc. (CDI) would be the 100% owner of Old Bay Gaming and Racing, LLC, which directly owns Ocean Downs. Mr. Hopkins further explained that this change removed HCRH, LLC, which is also fully owned by CDI out of the corporate structure and that the Commission did not have to take any action. Peter Szymanski from Ocean Downs commented that Ocean Downs was in the process of scheduling their marketing and race program for 2022.

Beyond The Wire.

Executive Director J. Michael Hopkins informed the Commission that effective January 1, 2022 there would be a 1.5% assessment on each claimed horse that was approved by the Maryland Thoroughbred Horsemen’s Association for the benefit of “Beyond The Wire”.  Mr. Hopkins further advised that owners had the ability to opt out of the program. Chairman Algeo thanked Mr. Hopkins and noted that those funds would be going to a good cause.

Track Surface Update.

Aiden Butler, Chief Operating Officer of 1st Racing, and Mike Rogers, President of the Maryland Jockey Club, addressed the Commission concerning the track surface. Aiden Butler informed the Commission that the Maryland Jockey Club would not be conducting live racing the weekend of December 10th due to the ongoing track surface work.

Mike Rogers presented the Commission with a brief history of the track renovations from August through the second week of November. During that time, through discussions with horsemen and the MJC experts, a deviation was discovered near the tote board. Thereafter, several breakdowns occurred, but not in the area near the tote board. As a result, the MJC reached out to Dennis Moore, their track expert in California, John Passero a long tome track manager in Maryland, Glen Kozak the track manager in New York and other experts to review the track surface and make recommendations. As a result, the entire cushion was pulled back to inspect the base.  Mr. Rogers explained that the base was not in disrepair. Mr. Rogers advised that other adjustments were being made to the “pad” just under the cushion by adding a thin layer of white sand to be an indicator if the horses were going through the cushion and affecting the pad. Mr. Rogers explained that at the recommendations of the experts, new materials were being added, which will give the cushion more body and be safer for the horses.

Aiden Butler commented that on a going forward basis, any strategic change to the track surface will be made collaboratively by getting the input from all the experts, before any changes are made to the track surface. Commissioner Bowman asked what assurances the Commission has moving forward regarding the track surface. Mr. Butler responded that there will be a mix of “art and science” to make sure the surface is what it is supposed to be. Mr. Butler further commented that the experts are satisfied moving forward that the modifications to the track will be successful. Commissioner Wayson expressed his concern that this was not the first time that issues concerning the track surface had been present at Laurel Park.  Mr. Wayson expressed his concern that the track surface cannot be allowed to get to this position again. He asked Mr. Butler what steps the MJC was taking with its personnel to prevent another problem.   Mr. Butler responded that moving forward the strategy will be to include all of their experts to make decisions on how to manage the track surface and provide that guidance to the track manager.

Chairman Algeo commented that he had heard from various sources about the Commission’s role concerning the track surface. Chairman Algeo stated on November 28, 2021, a meeting was held with industry stakeholders to discuss the condition of the track. Chairman Algeo noted that he had specifically asked if the track was safe to conduct racing and the consensus was that it was safe.  Unfortunately, a horse broke down that afternoon. Chairman Algeo explained that since the MJC had made the decision not to run, the Commission did not need to take any action at the meeting.   He noted that the Commission would revisit the issue at another Racing Commission meeting that would be scheduled on December 14, 2021 at 12:30 P.M. to make a decision as to whether the track should be open to live racing based on the views expressed to the Commission from all experts and stakeholders.  Commissioner Wayson asked if horsemen would be reimbursed for taking their horses to Pimlico to train and Mr. Butler responded that he would look into it. Chairman Algeo asked John Passero, the MTHA’s expert, if he had anything to add the discussion.  Mr. Passero responded that by adding water and course sand, the body would return to the surface.

Public Comments.

Ann Merryman suggested that the MJC employ an experienced exercise rider from each track to give feedback about the track surface. Ms. Merryman also commented that she supported the Maryland Bred Fund Advisory Committee’s recommendations.

Gerry Brewster representing the Timonium Race Course welcomed the Commission and invited them to come back at any time.

Michael Merryman suggested that the track at Laurel be thoroughly examined before reconstruction. Mr. Merryman opined that Pimlico has a much better track surface.

Next Commission Meeting.

December 14, 2021 via Google Meets starting at 12:30 P.M.

Michael J. Algeo           

/s/                                                                                                        

Chairman