Alex Waldrop: Now I want to turn the podium over to Vince Gabbert, who will speak to us about the racing and wagering compact.

Vince ...

Vince Gabbert: Thank you, Alex. Thank you, Mr. Chairman.

Good morning. It is an absolute honor to participate in this year’s Round Table and I appreciate the opportunity to speak about a topic today that has so much potential for positive change moving forward in our industry.

To give you a little background for those of you who don’t know me, my name is Vince Gabbert. I have been the executive assistant to Nick Nicholson since October of 2009. As a young child, I developed a great love for the sport of horse racing. I grew up around horses — in fact, my family actually raced Quarter Horses for many years — and although a somewhat different ballgame, it certainly planted the seeds for the passion I have for our industry today.

I am a lawyer by education, and have spent a good deal of my career working in government in some way or another. I’ve worked in and around the state legislature, I worked several years in municipal finance, and prior to joining Keeneland last fall, I served as deputy chief of staff to Governor Steve Beshear in Kentucky. All of those experiences have given me a valuable understanding of how policy is shaped from the executive, legislative and regulatory perspectives. Today, my focus is on interstate compacts and the potential for the Thoroughbred industry to enact such a compact.

What is a compact? It is simply an agreement between two or more states that bind those states to the compact provisions and process — just as a contract binds two or more parties in a business deal. Some more notable examples of popular compacts include the Northeast Dairy Compact and the Mississippi River Delta Authority. The Northeast Dairy Compact was created to maintain the economic viability of the milk industry and to regulate the milk prices in the New England states. The Mississippi River Authority was created to ensure the same rules were being followed whether you put in at a dock in Minnesota or New Orleans, in order to have consistency on a waterway that extends through so many jurisdictions. After all, no one state should have the responsibility of regulating and controlling the entire Mississippi River, so a compact makes perfect sense.

The idea of a compact is the result of year-long discussions to ease the regulatory and expense burden on the states. The initial proposal was drafted and still is being shepherded with the help of the Council of State Governments, working in partnerships with many representatives that are in the room today, including The Jockey Club, Keeneland, NTRA, and many others. I would note that the state of New York should be applauded in their efforts on this proposal. Their representatives have taken a leadership role in crafting the compact language and were instrumental in New York being the first state to introduce proposed legislation.

How would the compact work? Each state legislature would pass a law, just as they do any other law, adopting the compact language and agreeing to be a part of the compact. Each state that passed such legislation would then have one vote on the compact commission, that member being appointed by the state regulatory authority.

Currently, there is legislation pending here in New York, and Colorado has already passed language to enter the compact.

Once adopted and put into place, the compact would require a small, full-time staff to help ease the administrative burden on state regulatory agencies. Additionally, it would be essential to have individuals overseeing the process to ensure timelines and legalities are met. One major plus to a compact is the decreased expense on the state by centralizing the process and reducing personnel and administrative costs at the state level. This would benefit both tracks and horsemen as well.

The compact would call for a process requiring all proposed rules to be discussed in an open forum and receive full consideration prior to implementation. This forum would be moderated through the compact committee structure made up of standing “advisory” committees comprised of private sector representation, including but not limited to horse owners, breeders, racetracks, trainers, etc.

Any two members of the compact together may call for a meeting. Similarly, any rule may be proposed by two or more members. However, a majority of participating states is required to adopt, amend, or rescind any rules, fees, programs or practices. And those rules are only adopted, and shall take effect in a member state, only when their representative on the compact affirmatively votes to adopt it.

Rules adopted through the compact process would become the governing regulation in each member state that affirms it and that would supersede any conflicting rules or regulations that previously existed in that state. Why is this important? Because this finally provides our sport with the potential for a national rule book. At a time when so many of our horses travel across state lines, it is a shame that our rules do not travel with them.

Who would participate in this compact? Any state jurisdiction that currently offers pari-mutuel racing or wagering would be eligible to participate. The proposed compact would become effective upon the adoption of compact language in six states. When you consider that 16 states represent over 90% of purse distributions, and of those, seven make up over 60% of purses, that doesn’t seem like extraordinarily heavy lifting.

And what are the goals of this compact? Most importantly it is to create uniformity. You’ve already heard this morning many people note the need for uniformity in our industry and this would achieve that goal and be on the way to it. Just as I know what the rules are if I navigate the Mississippi River regardless of my position on the water, I should know what the rules are whether I race in New York, California or Florida. Another goal would be that through this consolidation of services it would decrease the administrative burden and expense on our states and industry partners. And ultimately, a compact creates a national structure for self-governance so as not to encourage increased federal oversight.

So where do we go from here? We must work diligently to pass compact language as law in various states. In addition to New York and Colorado, Kentucky, Florida, Indiana and West Virginia have expressed a strong interest as well in passing such legislation. We must take a grassroots approach to encourage involvement from all sectors and reach an effective number of participants, balancing between local and national interest with input from all interested parties.

There is no question we have great potential to do something here that would have positive ramifications for generations to come for our sport and an interstate compact is the perfect vehicle to get us on that road.

Thank you again for the opportunity to participate today, and I look forward to working with all of you on this project in the days ahead. Thank you.

Stuart S. Janney III: Thank you very much, Alex and Vince. We appreciate your efforts and we look forward to learning more in the days ahead about the alliance and compact.