STAKING A CLAIM - Guide to claiming races from state to state

Claimers have been the heart and soul of race meetings forever. The Daily Racing Form recently documented claimers’ significant niche in racing. As part of a comprehensive analysis of 2015, the Form reported on March 6th that the 26,515 claiming races in North America last year constituted 62.8% of all 42,220 races. The cumulative $393-plus million in purses for those claiming races was 34.1% of the $1.1-plus billion in total purses. THERE is no racing without speculate on a yearling or a two-year-old. If they go ahead and claim a horse, do they know the business rules? Do they know there may be multiple sales taxes to pay on the claim? Are they informed of the restrictions placed on the next start of a horse they claim? Similar to medication rules, the business rules of claiming Thoroughbreds are not standard in the U.S. Would it be simpler to have a single set of national rules? Of course claimers. Frequently, a person considering Thoroughbred ownership is advised to start with a claimer, a proven commodity, rather than WORDS: BILL HELLER PHOTOS: EcLIPSE SPORTSWIRE it would. But that isn’t going to happen anytime soon. “It’s confusing, because it varies from state to state,” Del Mar director of racing Tom Robbins said. But even within a single state, including Robbins’ California, sales tax rates on claimed horses vary from track to track. Rules also vary state to state and even track to track regarding “jail time,” the restrictions on a claimed horse making his next start. Most states, but not all, practice reciprocity regarding jail time. It’s a bloody mess out there. “Almost every state is different,” New York-based trainer Bruce Levine said. “Every state has different rules. You’ve just got to be very careful when you ship in the Northeast and mid-Atlantic. “I raced in Jersey for a long time,” Levine said. “Every year, it was changing. It was crazy in Jersey. They had no jail time one year. Guys were claiming horses for ten ($10,000) and running him for a nickel ($5,000). There were a bunch of odds-on horses. Every race there was a 3-5 shot. They did away with that. For a long time, they had 21 days in jail. They had one time that you couldn’t drop if you finished first or second. They kept trying to tweak it to make it better. It kept changing.” New Jersey officials might not be done. As of March 30th, a claimed horse in New Jersey, who must race in-state until the end of the meet, must also run for 25% higher for 20 days after the claim. The second half of that rule is being reviewed this spring. The state racing commission is considering changing “25% higher” to “just higher than the claiming price.” In New York in 2015, 1,259 Thoroughbreds were claimed at four tracks. By comparison, a total of 1,139 Standardbreds were claimed at seven tracks. Here’s the breakdown by tracks. For Thoroughbreds: Aqueduct 463, Belmont Park 414, Saratoga Race Course 243, and Finger Lakes 137. For harness horses: Batavia 49, Buffalo 156, Monticello 78, Saratoga Gaming and Racing 149, Tioga 42, Vernon 41, and Yonkers 624. Not a single New York horseman paid a penny of sales tax on their claims. “We used to have sales tax here,” Levine said. “I’d say 20-plus years ago. The New York HBPA (Horsemen’s and Benevolent and Protective “Almost every state is different. Every state has different rules. You’ve just got to be very careful when you ship in the Northeast and mid-Atlantic Bruce Levine Association) fought for it for the horsemen (to remove it).” New York isn’t the only racing jurisdiction without sales tax on claims. Horsemen ” in Arizona, Colorado, Delaware, Illinois, Minnesota, Montana, Nebraska, New Mexico, Ohio, Oklahoma, Oregon, Texas, and Wyoming also enjoy that perk. Until recently, horsemen in Louisiana were also paying state sales tax. Thanks to successful lobbying by the Louisiana Horsemen’s Benevolent & Protective Association, the state dropped the sales tax in the mid-2000s. “We’re very grateful that the state of Louisiana Legislature recognizes the importance of the racing industry,” Ed Fenasci, Executive Director of the Louisiana HBPA, said. They are, however, hit with taxes by the local parish and city. Four different tracks pay three different amounts. The tax is 5% at Fair Grounds and Louisiana Downs, 5.25% at Delta Downs, and 5.75% at Evangeline. Horsemen at two Florida tracks, Gulfstream Park and Gulfstream Park West, pay 6% state sales tax on claims versus 7% at both Tampa Bay Downs and Hialeah, where Quarter Horses race. In Illinois, Mickey Ezzo, the projects manager for the Illinois Racing Board, said there has been discussion of a sales tax on claims for many years. “I’ve been doing this my whole life,” he said. “I remember discussing this issue for 25 years. There’s been talk about it, but it never happened.” Horsemen at Oaklawn Park in Arkansas, Golden Gate in California, and Emerald Downs in Washington share the dubious distinction of paying the highest sales tax in the country at 9.5%. In Arkansas, the state sales tax is 6.5%. “We pay 1.5% to the city of Hot Springs and 1.5 to Garland County,” Dave Longinotti, Oaklawn Park’s director of racing, said. “It’s confusing to us, too,” he joked. Robbins, a long-time California racing official who has served at all of the state’s major tracks, said, “It’s hard to keep track of all those things.” It’s even harder in Washington. “The sales tax is only collected on geldings, as stallions and mares can be used for breeding “I like the way it’s set up in New York. It protects the little guy from losing his horse. You’ve got to save the little guy Bruce Levine purposes,” Doug Moore, the Executive Secretary of the Washington Racing Commission, said. “Stallions and mares were declared exempt by the state Department of Revenue.” Washington, South Dakota, and Oregon stand alone in the country on the restrictions placed on a horse who’s been claimed. “There is no jail time in Washington or restriction on their next start,” Moore said. “There is no requirement that is mandated in other jurisdictions where the horse must run ” for an increased claiming price for a certain amount of time either.” In South Dakota, “A claim is a legitimate method of acquiring ownership of a horse,” Larry Eliason, executive secretary of the South Dakota Commission on Gaming, said. “Once a horse is in your possession, you can do anything that’s legal in terms of placing him.” Other racing states have varied restrictions on a claimed horse’s next start, specifying that the horse must run for at least 25% higher for a number of days or until the end of the current meet, and banning a claimed horse from racing at other tracks in-state and/or out-of-state. Most have exceptions to those restrictions if the horse is entered in a stakes race or if the horse receives permission by the stewards to race at other tracks. In New York, a claimed horse must race within state and for at least 25% higher for 30 days or the end of the meet, whichever is longer. “I like the way it’s set up in New York,” Levine said. “It protects the little guy from losing his horse. You’ve got to save the little guy.” n

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This article appeared in North American Trainer - issue 40 (May to July 2016)

RACING, TRACKSIDEWebmaster22 April 2016CLAIMERS, STAKING A CLAIM, NAT40