Members of the Louisiana State Racing Commission ordered the Fair Grounds on Tuesday to add $2.7 million that it was holding pending litigation back to the track’s purses for the upcoming thoroughbred meet.
The commission held a meeting to determine whether the track had statutory authority to withhold the money, which a group of quarter horse owners, trainers and jockeys claim in a lawsuit is owed to them. While plaintiffs seek a portion of the track’s parimutuels dating back to 2008, the $2.7 million figure represents money made from April to August of this year.
After hearing testimony from the Fair Grounds, the Louisiana Horsemen’s Benevolent and Protective Association and a representative of the quarterhorsemen, the committee deliberated for about 10 minutes in a closed executive session before publicly moving to finalize the decision. The committee did not delineate how the money should be reinstated into the meet’s schedule.
The demanded funds would have nearly doubled the cuts the track made due to an anticipated decline in revenue from last year’s meet.
“They did not have the authority to withhold these funds,” LSRC Chairman Bob Wright said after the meeting. “And [if they did], that would be very detrimental to the upcoming racing season.”
Attorney David Waguespack represented the Fair Grounds at the meeting and took questions from Benjamin J. Guilbeau, a commission member who heads its legal committee. Waguespack provided background and made the first of several petitions for the commission to rule on the matter. He said that exceptions filed to the court and due to be heard Nov. 21 could dismiss the suit before it became an issue.
“I can’t tell you right now that we’re necessarily going to have to put the money in the registry of the court,” Waguespack said. “We hope not to. I continue to look for ways, including today, if you all were to tell us, ‘Look we agree to your interpretation of the statute, and that we should be paid into the thoroughbred meet,’ that ruling would go a long way to solving this.”
“It might be enough for us to go ahead and pay the money into the thoroughbred meet. I don’t know if you’re prepared to do that today, it sounds like not, but as soon as we get that direction from the racing commission, we will put that money into the appropriate meet.”
Guilbeau interrupted and reiterated his opening that the meeting was called not to discuss the merits of the lawsuit, but on what grounds the track stands to have built the $2.7 million figure in to the purse structure announced on Oct. 2. Waguespack clarified through further questioning that neither the Fair Grounds nor the plaintiffs have requested a court order to hold the money in escrow and could not point to specific statutory language that allowed the track to withhold the money itself.
“Again we’re looking for direction from a court or the racing commission,” Waguespack said in closing. “It’s a difficult position to be in, I acknowledge that. This is not something we want. It’s damaging to the meet. It’s damaging to racing. It’s unfortunate that people are usurping, to me, the HBPA and racing commission’s authority.”
Thoroughbred owner Harry Bruns, who has been critical in the past of how the Fair Grounds’ parent company Churchill Downs Inc. has handled the track, testified following Waguespack. He implored the commission to consider CDI’s $1.5 billion market capitalization when deciding whether cutting $400,000 from the normally $1 million-purse of the Louisiana Derby is fair.
“They have a call to release their earnings in about a week, where they have to explain to Wall Street what’s going on,” Bruns said. “The most powerful message that this message could send is to say that until you pay this money into the registry, we will suspend your license to race here, because you are not doing what is in the best interest of racing.”
Attorney John Duvieilh represented the HBPA, which is also named as a defendant in the suit and works with the Fair Grounds to distribute purse money to horsemen. He said that while he agreed with the track’s officials that it is dangerous for the quarterhorsemen to strike out independently, the association’s stance is that withholding the money would cause “irreparable harm” to the industry and that it is not aware of any authority they have to do so.
Bill Townsend, a lawyer for the quarterhorse group, closed the comments. He said he believes the authority on whether the track should hold the money is RS 27.438, the same statute his group says gives them rights to the funds, but did not elaborate. Townsend declined to comment after the meeting.
Following testimony and private deliberation, the commission approved a motion to order the Fair Grounds to immediately add the $2.7 million back to the purse structure, issue a new conditions book to horsemen reflecting the funds and put out a press release announcing the changes. As of press time the Fair Grounds officials had not put out a release and did not reply to requests for comment.
After the meeting, Wright said the commission was concerned for the quality of the horses racing this season and the quantity of horses in each field, which would likely decrease handle further. In a previous story, some prominent horsemen loyal to the Fair Grounds in the past told The Advocate the cuts would force them to look at other tracks.
Wright said he expected compliance from track officials.
“The money doesn’t belong to them,” Wright said. “The money belongs to the purses. The only way it would hurt them is if they lose the lawsuit and they do not have the funds ready to pay the quarterhorsemen other than going into their own purse. I don’t think that will happen.”