Dennis Mills - Committed to the future of horse racing.

THE SUCCESS OF ANY BUSINESS REQUIRES INPUT AND CO-OPERATION FROM ITS PRINCIPAL STAKEHOLDERS

A business is most likely to prosper over the long-term when the basis for sharing the economic rewards of the business is clearly defined, financial information is readily shared, clear communications exist among all principal stakeholders and there is mutual respect for the investment each stakeholder has made contributing to the success of the enterprise.

IN HORSE RACING, THE PRINCIPAL STAKEHOLDERS ARE:

Racetrack Owners & Horse Owners

Racetrack Owners depend on their Executive Management to represent their interests. Horse Owners depend on their Horsemen’s Group.

Trainers and Jockeys are key participants in the success of the business and must share fairly in its financial rewards.

MID and its employees are committed to insuring that our horse racing business is operated with integrity and concern for the health and safety of the horses and the people who work with them. 

Revenue Sharing

MID is committed to sharing the income streams derived from wagering on live horse racing (including net revenue earned from data, media, and wagering rights), and the earnings from other forms of gaming that take place at MID racetrack properties.

Net Revenue from horse racing shall be shared as follows:

Horse Owners – 48%
Racetrack Owner – 48
Backstretch Fund – 4%

[The above rates apply where not governed by statute or existing contract; where governed by statute, parties to work together over time to implement above rates; where governed by existing contract, Charter to replace existing contract.]

The equal sharing between Horse Owners and Racetrack Owners is a core principal of the Horse Racing Charter of Rights. Their equal contribution to the Backstretch Fund is also a fundamental principal.  Horse Owners’ share includes amounts required to be set aside by statue or contract for owners and breeders’ awards that are paid in the form of purses.

Net Revenue means revenue derived from takeout, as well as other revenue earned by the racetrack operator from the exploitation of wagering data and media rights derived from live racing after deduction for totalizator costs, pari-mutuel and other similar taxes on revenue, other mandatory distributions (including amounts required by statute for breeders awards other than amounts included in purses) direct costs of acquisition and accumulation of content, data and media rights and direct costs of production (above the cost of creating the standard intertrack simulcast product), dissemination and protection of pictures, pools and data.

Earnings from other forms of gaming are to be shared as determined by existing contract or statute. [Parties to work together to develop mutually acceptable new model for sharing earnings from other forms of gaming.  Once agreed, parties to work together to change legislation to permit agreed terms and amend Charter to include agreed sharing formula.]

It is acknowledged that the Racetrack Owner deserves an opportunity to try to generate the greatest possible amount of revenue from all sources so long as such effort is not adverse to the mutual benefit of the parties to this Charter. As described in the Appendix, Horse Owners shall have full access to the financial affairs of the Racetrack and shall be encouraged to offer suggestions as to how the Racetrack could generate higher revenues and profits which will be shared as stipulated herein.

Regulatory Matters

Recognizing that our business success is inextricably linked, the parties to this Charter commit to working together to encourage the adoption at the State and National levels of rules and regulations that permit racetracks to compete fully with other forms of gaming and entertainment.  Namely, to allow racetracks to open when they think they can get the most customers, to allow racetracks to offer the products to customers that they think their customers want and, to buy those products at prices determined by the free market and, to allow racetracks to sell their products to other racetracks and other channels of distribution at prices determined by the free market.  In essence since net revenue derived from pari-mutuel wagering is shared equally between racetracks and horsemen after provision of amounts set aside for the Backstretch Fund, the best interests of both are served by supporting an environment where racetrack operators are permitted to generate the greatest amount of revenue.

The parties also agree to support legislative reform that they determine is to their mutual benefit including the legalization of OTBs and ADW in those markets where presently prohibited and to level the playing field so national ADW operators are not at a disadvantage to local or regional ADW operators.

The parties also agree to work together to present a single industry voice in the Nation’s Capitals.

Appendix to Proposed Horse Racing Charter

The rights and responsibilities of each group with respect to the operation of our horse racing business are as follows:

Racetrack Operator

The following are responsibilities of racetrack management:

• To work with racetrack employees and horsemen to provide customers with the best possible entertainment experience.
• To provide a safe and clean environment for horses, workers, employees and customers. 
• To regularly communicate with employees and horsemen concerning important matters affecting the operation of the business.
• To involve employees and horsemen in major decisions affecting the operations of the business.
• To be open to suggestions from employees, horsemen and customers.
• To be innovative in growing the business for the benefit of all stakeholders.

Horsemen’s Group 

• The following are the responsibilities of Horsemen’s Group:
• To work with the racetrack to provide customers with the best possible entertainment
• To provide a safe and clean environment for horses, workers, employees and customers. 
• To regularly communicate with the racetrack owner/operator concerning important matters affecting the operation of the business.
• To involve the horsemen (horse owners and trainers) they represent in major decisions affecting the operations of the business.
• To be open to suggestions from racetrack management and employees, and from racehorse owners, trainers, and backstretch employees, on how to improve the business.
• To be innovative in assisting racetrack management in growing the business for the benefit of all stakeholders.
• To conduct the business in a manner that complies with all applicable laws.

Racetrack Operations Advisory Council

In order to insure accountability the Racetrack Operator and the Horsemen’s Group agree to establish a Racetrack Operations Advisory Council.

The Council shall consist of eight members: four members appointed by racetrack management and four members appointed by the Horsemen’s Group.  No fewer than three of the Horsemen’s Group appointees shall be horse owners.

The Council shall meet at least monthly to review the operations of the business including financial results and any other matters raised by its members.  The financial review will include a detailed review and projections of purse revenues and the adequacy of the horsemen’s purse account; any plans regarding either increasing or decreasing purses will be discussed in advance with all members of the Council and communicated to horsemen by the Council members appointed by the Horsemen’s Group.

The Council shall organize various Committees to address the following policy matters:  racing dates; racing programs; stall allocation procedures; maintenance including racing surfaces, barns, dormitories, etc.; backstretch capital improvements; and simulcast wagering activities.

Minutes shall be prepared for all meetings.

Backstretch Committee

There shall be a Backstretch Committee consisting of three representatives appointed by the Horsemen’s Group to the Racetrack Operations Advisory Council and three representatives of the Council appointed by the racetrack.

The Backstretch Committee shall be responsible for gathering input from horsemen concerning the operations of the racetrack including the backside and track surface maintenance, and for communicating such input to racetrack management.  The Backstretch Committee shall insure barns and other facilities occupied by horsemen and their horses are operated in a safe, clean and friendly manner.

The Backstretch Committee shall determine the appropriate allocation of Backstretch Funds (operating, capital improvement and repair funds) recognizing the following priorities:  housing, recreation, education, medical and hardship support, as well as stable area maintenance.

Breeders’ Committee

There shall be a Breeders’ Committee consisting of three representatives selected by the regional Breeders’ Group, one representative selected by the Horsemen’s Group, and two representatives selected by the racetrack.

The Breeders’ Committee shall encourage and support the breeding of horses in the racetrack’s home state.

The Breeders’ Committee shall liaise with the racetrack, Horsemen’s Group, and regional Breeders’ Group concerning matters affecting purse supplements and breeder’s awards for state-bred races, leading to growth in the regional breeders’ and owners’ constituencies.

Jockeys

There shall be a Committee of Riders consisting of three jockeys elected by the jockey colony; one horse owner and one trainer appointed by the Horsemen’s Group; and two representatives appointed by the racetrack.