William S. Farish: As is the case with every sport, seeking to maintain the balance between the positive effects of therapeutic medication and ensuring that our athletic competitions are conducted on a level playing field should always be top priorities of this industry.

The Jockey Club continues to pour energy, manpower and financial support into efforts that will ensure consumer confidence and, at the same time, make this sport safer for our athletes, human and equine.

The state of Indiana takes the business of drug testing very seriously. In September 2007, Indiana became the first state to pass the RCI model rule banning anabolic steroid use.

Joe Gorajec is the executive director of the Indiana Horse Racing Commission and the immediate past chairman of the Association of Racing Commissioners International. He is here today to share some insights on the Model Rules and some of Indiana’s actions to ensure integrity.

Joe, thanks for being here and welcome to the Round Table Conference.

Joe Gorajec: Thank you, Mr. Farish. Good Morning.

I will speak today about regulations and reforms.

Specifically, I’ll discuss the cost of regulation along with the most important ingredient to implementing reform, which is the collective will of those of you sitting in this room.

In short, I’ll speak about money and resolve.

First, some background on the RCI model rule process — how it works — or, more importantly, how it doesn’t.

It is common knowledge that racing industry participants and our fans have been frustrated by the lack of uniformity in rules governing horse racing. This frustration is justified.

Let’s look at some of the hurdles to achieving uniform national regulations.

When the Association of Racing Commissioners International, the RCI, passes a model rule, the expectation is that the model rule will be adopted by every state racing commission. If this comes to pass, the end result is national uniformity on a particular issue.

What often happens, however, is that racing commissions do not enact a particular model rule. Experience confirms that the state horsemen’s associations or the local racetrack operator rarely request that their commission do so. More often, commissions attempt to promulgate model rules only to learn that either their horsemen or their tracks — or both — adamantly oppose them. In those instances, the model rule is adopted only by those commissions that choose to vote against the wishes of their horsemen or the tracks in their states. Very few commissions have the appetite to do that.

I submit to you that the failure to uniformly pass model rules is a collective failure of all industry stakeholders — not just racing commissions.

Looking forward I am optimistic that our industry can and will do better. The reason for my optimism is what I refer to as the legacy of Eight Belles.

Since Eight Belles, almost all national industry associations, including the National HBPA and Jockeys’ Guild, have, to a large extent, left behind provincial self-interest. These groups and others have focused on progressive changes needed for the benefit of the sport. Industry participation in the process is key.

In addition to greater involvement of industry stakeholders, there is encouraging news in the area of the rulemaking process itself.

There is serious consideration by state racing commissions to form an interstate compact that will fast track the passage of model rules.

Such a compact will require action by state legislators. However, once passed, participating states would have the ability to bypass the time-consuming state rulemaking process while coordinating a uniform implementation date with other states on new rules. Should this effort, which is being led by the New York State Racing and Wagering Board, come to fruition, it will be a significant step forward to the industry’s goal of national uniform rules.

It is important to keep in mind, however, that such a compact will not diminish the need for industry support and will still require funding for reforms.

Speaking of funding, the ability to pay for new initiatives has never been more problematic. The reality of the current economic environment is that budgets of state racing commissions — along with all other agencies of state government — are being reduced. Consequently, it is difficult enough for regulators to fund existing operations — much less to find the funds to implement new initiatives.

The funding crisis for racing regulation is real, acute and is unlikely to get better anytime soon.

That brings us to the most important question: How are all these new and future initiatives going to be paid for?

I’d like to suggest to you a mechanism to supplement current regulatory funding. I’ll call it the Indiana model. It is the Gaming Integrity Fund established by our state legislature in 2007 as part of its approval of slot machines at Indiana racetracks.

The fund consists of $1 million contributed annually. The monies are contributed in equal amounts from the tracks and the horsemen’s share of slot machine revenue. The fund is administered by the racing commission and can be used only for equine drug testing and related research.

The main value of the Gaming Integrity Fund is that it supplements our existing agency appropriations. In other words, these are new monies, and as such, they give us the ability to improve and excel. As the funding is statutory, it is money that we can depend on year after year.

What has the Gaming Integrity Fund done for Indiana racing?

Indiana has had in the past what I’ll describe as a mainstream drug testing program. The new supplemental funds will double our expenditures for drug testing in 2010. We will now have an elite drug testing program.

I think it is fair to say that no other state is currently doubling the resources available to its drug testing program. Should other states wish to emulate Indiana’s model, I recommend that the legislation in this area be written broadly enough to include funding to implement both current and future RCI model rules as well as NTRA Safety and Integrity Alliance initiatives.

Getting back to the issue of resolve — let me give just one example of true reform that will not cost a penny to regulate — but will be a stiff test of the industry’s commitment to reform.

There has been a vigorous debate over the past three decades about the race-day use of furosemide. Regardless of your opinion about Salix, one lesson learned is we should not loosen strict medication policies without ample due diligence, an abundance of caution and consideration of the racing public’s aversion to drugs of any kind in racing.

Let’s vow never again to allow our horses to be given any drug or medication on race day until after research is conducted, results are studied and the implications to the sport are fully debated. In other words, don’t inject first and ask questions later.

Sadly, we are doing it again. Today! Not here in Saratoga nor in my home state of Indiana, but in many states including several major racing jurisdictions.

I am speaking of bleeder adjuncts. These are state-sanctioned drugs that are permitted on race day — in addition to Salix. Today — right now as we sit here — veterinarians are making their rounds in stable areas at tracks across the country. They are injecting our horses with amincaproic acid (trade name amicar), carbazachrome (known as “Kentucky Red”), conjugated estrogens, amongst other substances. These horses will race this afternoon. None of these drugs have passed scientific scrutiny as to their effectiveness, never mind possible side effects and long-term consequences to the animal’s health.

I mention this practice as part plea, part criticism and part challenge. Let’s eliminate these bleeder adjuncts. Let’s do it today.

This is a reform which required no funding, just resolve.

There will be some that will say that there are other more significant issues that we should be focusing on. In my humble opinion, this is simply a tactic to divert attention away from the problem and continuing the status quo. Our equine athletes deserve better.

Think about this: How do we ever expect to harmonize our medication policies within the U.S. — or for that matter with the rest of the world — when we can’t even prove to ourselves that the drugs we give our own horses are beneficial?

Thank you for listening.

William S. Farish: Thank you, Joe. We are hopeful that many states are going to follow your lead, and I think this is just the beginning of this discussion today.