The rancor stewing for years between the New Mexico Horsemen's Association and the New Mexico Racing Commission is boiling over state lines and threatening to undermine revenue from simulcasting.
At least four state horsemen's associations have withdrawn their permission for the racetracks in their states to send simulcast signals to New Mexico tracks. The blockade is a show of solidarity against what many organizations see as a New Mexico attack on the integrity of the Interstate Horseracing Act, which allows interstate simulcasting.
"I shut it down," said Rick Hiles, president of the Kentucky Horsemen's Benevolent and Protective Association. "The New Mexico Racing Commission is circumventing the Interstate Horseracing Act. When the commission took it upon itself to get around federal law, then we will stand up to this—forever."
Simulcasting signals also have been withdrawn by horsemen's associations in Oklahoma, Ohio, and Arizona, according to multiple sources. The Arizona HBPA is not only refusing to send its signal, it also has notified Sunland Park that its signal will not be accepted at Turf Paradise. Should the protest run into the spring, it could prevent New Mexico racing fans from being able to watch and wager at simulcast outlets on the May 4 Kentucky Derby (G1).
Ismael "Izzy" Trejo, executive director for the New Mexico Racing Commission, said he doesn't understand why these signals are being withheld because ultimately the lost revenue hurts horsemen.
"I don't know who these jurisdictions are listening to but it's someone who does not have the whole story. It is a shame that there is someone out there misrepresenting the historical relationship between the New Mexico Racing Commission and the New Mexico Horsemen's Association," he said. "With signals being withheld, it is really detrimental to the best interest of horsemen in New Mexico. A portion of simulcasting revenue goes to the purse fund, a portion goes to the equine test fund that we run our testing program off of. In order to (have gaming), you must be racing live or simulcast. If all the signals get shut down, I don't know where that would lead but it won't be a good thing."
The IHA states a racing association cannot send out its signal for off-track wagering or accept an off-track signal without consent from a group that represents the majority of owners and trainers at the track. The horsemen in New Mexico had, until 2021, been represented in these agreements by the New Mexico Horsemen's Association.
The feud between New Mexico horsemen and the racing commission began in 2020 when the NMHA challenged the use of purse funds to help pay for premiums for liability insurance for jockeys and exercise riders, which had been the standard practice for about 13 years.
"The agreement predates most everyone involved today but nobody had the authority to do this," said Paul Jenson, NMHA president. "For the racing commission to allow this was wrong and the horsemen did not have the authority to prevent it. We don't have the right to break the law just because certain parties in the past agreed to do so."
A lawsuit ultimately settled the insurance premium issue and decided that purse money could not be used to pay the premiums. The racing commission went to the legislature and reconfigured the process by carving out a portion of gaming tax revenue to cover this cost.
At the same time the insurance premium issue was being adjudicated, the racing commission challenged how the NMHA was funding its organization through a 1% purse deduction. Per the NMHA bylaws, each member in essence pays dues through a 1% deduction from any purses earned, a $5 starter fee, and a $2 contribution to a political action committee. According to the racing commission, the NMHA considered as a member any owner and trainer licensed in the state. So if an out-of-state owner got licensed to run a horse in a New Mexico stakes race, he would automatically be considered a member and have the 1% deduction applied to any purses. Trejo and Eric Loman, an attorney who represents the racing commission, said the commission got complaints from owners that they never agreed to the 1% deduction. The commission responded by directing racetracks to stop automatically applying the 1% deduction in May 2021.
Jenson said any complaints the commission had about deduction were not representative of the membership.
"This was an at-will contribution. At any time, an owner could opt out," he said. "We've had 12 people opt out in the last 66 years."
The racing commission also changed the wording in its rules regarding simulcast wagering on June 16, 2022, that "unrecognized" the NMHA as the official horsemen's representative by removing a specific reference to the New Mexico Horsemen's Association as the designated horsemen's representative and replacing it with "a representative of the horsemen's group as defined in the Interstate Horse Racing Act."
Commissioners had considered a proposal to replace the NMHA in the language with the New Mexico Horse Breeders Association, but the breeders association told the commission it did not have the desire or the infrastructure to take on the duties of monitoring purses and simulcast contracts. The proposal did not get a motion in support of the change and went nowhere.
"The commission saw it was in the best interest not to do that," Trejo said of specifically naming the breeders association in its rules.
Loman and Trejo said the wording change was nothing more than making state rules mirror what is stated in the federal law. The racing commission also amended how money is distributed to horsemen by removing the NMHA as the manager of the purse funds from the state gaming tax. Per state law, 20% of the gaming tax is contributed to the purse fund. This money previously was distributed to an NMHA account and then the horsemen's association distributed 19.3% of this cut of the tax to the breeders association. The commission changed its rules so that the breeders association now gets its money directly from the tracks and the remaining 8.7% goes into purse accounts set up by each track.
Horsemen, however, saw these rule changes as retaliation and an effort by the commission to undermine the horsemen's group.
"No longer existing in the very purse structure is the ability of the NMHA to monitor or control its own purses," said Jenson in a Jan. 24 letter he sent to Gov. Michelle Lujan-Grisham and members of the New Mexico Legislature. "The New Mexico Racing Commission now holds the distinction as being the sole racing jurisdiction in the United States to disregard federal law and takes away the collective bargaining power of the horsemen and horsewomen racing in New Mexico."
Jenson cites in his letter a statement from Judge Daniel Bryant of the Lincoln County 12th Judicial District Court related to a suit between the NMHA and Ruidoso Downs that said: "Petitioner (NMHA) is a horsemen's group or association that represents a majority of the horsemen in the State of New Mexico and at Respondent's racetrack and casino participating in 2023 race meet."
The letter concludes with an appeal to the governor and legislators to order a forensic audit of the purse accounts and to "formally request that the NMRC cease and desist its retaliatory actions against the New Mexico horsemen and horsewomen."
The NMHA filed a civil suit against the racing commission that challenged the action of being "unrecognized" as a violation of its rights. This suit eventually was dismissed and appealed. The court dismissed the appeal in September 2023 ruling that: "the decision to 'unrecognize' the association had no effect whatsoever on its status as the group that represents owners and trainers for purposes of the Interstate Horseracing Act. … The commission's decision to 'unrecognize' the association did not result in the deprivation of any rights, status, or other cognizable legal interest and therefore is not subject to review by this court."
"The IHA does not give the absolute authority to any particular organization," noted Loman to BloodHorse Jan. 30. "It is any organization or committee that meets the definition in the act."
What has happened since the "unrecognition," however, has been the establishment of horsemen's committees at each racetrack with the exception of SunRay Park, which is not conducting simulcasting domestically. These committees, referred to as "associations" in state rules, are providing the horsemen's consent on simulcast contracts, but not without some leverage being applied by racetrack executives, according to Jenson.
"There are horsemen on these committees but they are being told, if you want stalls you better serve on this committee. And now, sign this agreement," Jenson said.
Loman said he has not heard of any coercion or "arm-twisting" from people serving on these horsemen's committees.
Mary Barber, executive director of the New Mexico Horse Breeders Association, said her organization is not involved in the horsemen's dispute with the racing commission and has not been affected by any of the turmoil. She has heard of horsemen who have not been comfortable serving on the track-formed committees.
"The people being named to these committees are horsemen and they are good people," she said. "I know some people are not thrilled with this situation. Horsemen don't necessarily know what purse money is coming in and what they should be getting."
Barber also said there is a lot of concern about the steady decline in live racing dates. She said in 2014 the state had 286 racing days and last year that fell to 187.
"In the 1990s, we had four tracks racing at the same time through the summer. We're still racing year-round but now we have one track racing at a time," she said. "I think horsemen feel the racing commission is pretty much doing whatever the racetracks want it to do."
By "unrecognizing" the NMHA, Hiles said the racing commission is undermining its authority as an advocate, the importance of which is recognized in the IHA.
"The federal lawmakers knew who best to protect their own product—the horsemen. If you allow tracks to set up their own groups then they get to set up their own rules without any oversight," he said. "No Kentucky signal will go to any New Mexico track, and this is not permanent. If the racing commission will honor the horsemen's rights under the IHA, then we'll turn the signal back on."
