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New Jersey Racing Commission
  2008 Plans and Incentives  
  Initiatives:  
 
  1. Upgrade, expand and relocate the New Jersey Racing Commission equine testing laboratory.
    The equine testing laboratory is funded by the racing industry and is subject to the jurisdiction of the Racing Commission in terms of testing policy. It is staffed by State Police personnel and is part of the State Police Forensic Science Bureau. Laboratory personnel test specimens collected from racehorses for the presence of illegal drugs.
    Currently, the Lab is located on the grounds of the Meadowlands Racetrack and relocating to a larger facility has been a priority for years. The Commissioners believe that increasing the size of the laboratory and purchasing new testing equipment is needed to effectively regulate racing in the future.
  2.

Complete an audit of the books and records of the New Jersey Account Wagering Licensee.

   

Account wagering commenced in New Jersey in October 2004. Account wagering presently consists of the ability of New Jersey residents to establish and maintain multi-day wagering accounts (prior to this new law, one-day accounts only were permitted), through which wagers on horse racing may be debited and winning wagers credited. Patrons can now wager within New Jersey by telephone (through an automated system), by computer, and at eligible New Jersey racetracks and off-track wagering facilities using their account.

    With the bulk of the system now operational, the Racing Commission believes it is an opportune time to exercise its authority to conduct an audit of the account wagering licensee’s books and records. Such an audit will serve to ensure that the requirements set forth in its rules, concerning account wagering, are being followed. If any deficiencies are detected, such an audit will allow for the ability to implement remedial measures. Hopefully, this initiative will provide evidence that the Account Wagering System, through diligent oversight, is operating accurately and efficiently.
  3. Licensing Initiatives - digital fingerprinting of all Racing Commission licensees; electronic web-based license applications.
   

The Racing Commission has a continuing interest in implementing a digital fingerprinting system in 2008. Presently, the Racing Commission fingerprints approximately 4,000 license applicants per year. The conversion from the existing “ink and roll” to a digital system will be more efficient and will allow for a quicker response from the Federal Bureau of Investigation concerning criminal history information.

    The Racing Commission would also like to implement a web-based electronic filing of licensing applications. Upgrading the license application process to such a system will not only provide a convenience to applicants but will also result in increased efficiencies of the licensing operation. Currently all applications are completed manually and either presented in person to a Racing Commission licensing inspector for processing or submitted through the mail for processing. Licensing inspectors must enter the licensing information manually into the computer system before a license can be issued. Electronic submission of applications and payment will eliminate the manual entering of information which will expedite the processing time and reduce the number of manually processed applications.
  4. Enhancement of pari-mutuel monitoring and security
   

Pari-mutuel wagering has evolved into an expansive and growing wagering system. Betting on races originating in New Jersey has expanded from on-track wagering by patrons in attendance at a particular in-state racetrack to wagering by patrons in attendance at other in-state racetracks, out-of-state racetracks, out-of-country racetracks, and off-track and account wagering facilities located worldwide. Patrons from around the world now have the ability to wager on horses competing at New Jersey racetracks.

   

Monitoring of wagering became more complicated as the wagering expanded. Concern over the ability to effectively monitor the current system of wagering is growing. This is an industry concern that confronts all racing jurisdictions. Association of Racing Commissioners International (ARCI), the trade association of pari-mutuel regulators, through its subsidiary, RCI Integrity Services, has
developed an independent monitoring system that has recently been made available to all regulators that provides:

   
  • real-time regulatory monitoring and auditing services for all the wagering activity of the customer
  • an independent auditing service for the proceeds of pari-mutuel wagering
  • coordination with system operators and State Regulators, providing a consolidated response to all detected wagering discrepancies
  • methods to define and implement tracking and escalation procedures to ensure a coordinated response to wagering discrepancies
    The New Jersey Racing Commission has received a detailed explanation of the services provided by RCI Integrity Services and has had preliminary discussions with representatives of the New Jersey racetracks. It is the Commission’s intention to pursue implementation of this service once its effectiveness has been demonstrated and adequate funding has been identified.
  5. Regulatory due diligence of secondary pari-mutuel organizations (SPMO’s)
   

SPMO’s are defined as non-racetrack facilities that conduct pari-mutuel wagering. SPMO’s located in the United States and Canada are regulated entities and are licensed as such in each jurisdiction. However, there are many SPMO’s located off-shore which do not undergo any type of thorough licensing review. Many racing regulators have relied on representations made by racetracks as to the suitability of exporting signals to entities not licensed in the US or Canada due to limited resources. Because these entities are not within the geographic boundaries of a jurisdiction, in-person inspections, interviews with key personnel, technology tests and audits are not possible.

    The failure to conduct regulatory due diligence came to national attention with the highly publicized Uvari indictments, where allegations of identity fraud, money laundering and ties to organized crime were raised. These indictments were both embarrassing to the tracks as well as the regulatory agencies who did not conduct independent assessments as to the simulcasting partners of their licensed racetracks. As such, many racing commissions are concerned that they can no longer rely simply on representations made by racetracks as to the suitability of their simulcast export partners.
    Absent a national certification program, the New Jersey Racing Commission has decided to create a due diligence questionnaire designed to provide necessary information as to the suitability of the off-shore entity. The failure of such entities to complete said questionnaire and provide the requested information will cause their application to be denied, prohibiting New Jersey racetracks from simulcasting their races to this entity.
  6. Modification of regulations defining the Racing Commissions authority to conduct warrant-less searches of farms where racehorse are stabled
    With the assistance of the Division of Law, the New Jersey Racing Commission intends to conduct a comprehensive review and amend existing regulations for the purpose of defining when and where the Racing Commission can conduct warrant- less searches of farms where race horses are situated. The Racing Commission believes it should pass regulations that clearly define when and where the Racing Commission may conduct administrative warrant-less searches The regulations should also define the scope of said searches including a clear determination as to the appropriate and legal limitations of the searching investigator.
 
 

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