2018-20 Strategic Plan
Virginia Racing Commission [405]

The Virginia Racing Commission promotes, sustains, grows and controls the native horse racing industry with pari-mutuel wagering by promulgating regulations and conditions that command and promote excellence, honesty and integrity in racing and wagering.

 
We envision the Virginia Racing Commission (VRC) to be a model to which other racing commissions aspire, with a history of excellence and integrity. Participants will find our processing systems to be one of the most efficient and innovative in the industry. Regulations will be easily understood and applied to enable horseracing and wagering at the highest standard of integrity and fairness.
 
Financial Overview

VRC’s funding comes from non general funds, which are generated by a tax on pari-mutuel wagering that takes place in Virginia at licensed racetracks and satellite wagering facilities as well as from advanced deposit account wagering (ADW) by Virginia residents, and license fees from participants in horse racing, racetrack owners/operators, their employees, and ADW providers.

Biennial Budget
2019
General Fund
2019
Nongeneral Fund
2020
General Fund
2020
Nongeneral Fund
Initial Appropriation for the Biennium03,188,65503,188,655
Changes to Initial Appropriation0000
(Changes to Initial Appropriation will be 0 when the plan is created. They will change when the plan is updated mid-biennium.)
 
Anticipated Changes to Customer Base

The number of horse breeders and owners in Virginia may decrease due to wagering competition from surrounding states. By example, Delaware, West Virginia, Maryland, and Pennsylvania all have slot machines at racetracks. The revenue realized by these additional wagering options enables these states to pay much larger purses and breeder awards for the horses competing and thereby attracting horses and breeders away from Virginia. Recently Delaware has passed legislation allowing sports betting on football and table games, which will additionally increase the purses offered by the racetracks in this neighboring state.

The total amount distributed to the horse owners and breeders in Virginia is dependent on the wagering activity at the racetracks, satellite wagering facilities, and from advanced deposit account wagering by Virginia residents. Changes in the amount wagered will directly impact the amount of funds the Virginia Breeders Fund may distribute in awards and incentives.

Current Customer List
Predefined GroupUser Defined GroupNumber Served AnnuallyPotential Number of Annual CustomersProjected Customer Trend
Employer/ Business OwnerRacetrack Owners and Operators23Stable
Local or Regional Government AuthoritiesGovernments (state and local)59Increase
TaxpayerHorse Owners and Breeders500500Stable
TaxpayerHorsemen and other participants1,0001,000Stable
 
NameDescription
 
• Maintain horse racing in the Commonwealth of Virginia of the highest quality, free of corrupt, incompetent, dishonest or unprincipled practices thereby maintaining honesty and integrity in racing.
Summary and Alignment
Ensuring that pari-mutuel wagering and racing is free of illegal activities is essential to the horseracing industry. This goal directly aligns to VRC’s mission to promulgate regulations and conditions that command and promote excellence, honesty and integrity in racing and wagering.
Associated State Goal
Government and Citizens: Be recognized as the best-managed state in the nation.
Associated Societal Indicator
Consumer Protection
Objectives
» Ensure that all participants in horse racing, especially those directly involved in the sport including the horses competing, are free of prohibited substances and intoxicants.
Description

Public protection and safety of horses is of critical importance. Those directly involved in racing that may affect the outcome of a race may be tested for prohibited substances at any time. Tests are also performed on selected horses that compete in live races with pari-mutuel wagering.


Objective Strategies
• Alcohol tests are performed on individuals directly involved in racing, in addition to individuals that could possibly affect the outcome of a race. Random drug tests on these same individuals may also be performed if warranted. The testing of the horses competing is performed by VRC veterinarians and test barn technicians by collecting blood and urine samples from selected horses. Samples are submitted to the approved laboratory for testing by a chief racing chemist for any prohibited or foreign substances that may affect the performance of a horse and/or the outcome of a race.

Measures
♦ Number of samples taken from horses competing submitted to the laboratory for analysis

» Ensure that all participants in horse racing with pari-mutuel wagering have legal, up-to-date permits issued by the Virginia Racing Commission.
Description
Pari-Mutuel wagering and racing that is conducted free of any illegal activities and/or the perception of illegal activities is critical to the survival of the horse racing industry. Therefore all individuals participating in horse racing and employees associated with racing or wagering must be permitted by VRC. To obtain a permit, a criminal history is obtained for each applicant by submission of fingerprints to the State Police and the Federal Bureau of Investigation. A record of an applicant's prior racing violations in Virginia and other jurisdictions is also obtained from the Association of Racing Commissioners International or the United States Trotting Association.

Objective Strategies
• VRC permitting staff reviews the official track program to confirm that all individuals included to participate as owners, trainers, and jockeys or drivers have a current permit. Staff also reviews a listing of all employees associated with racing or wagering provided by the racetrack licensee to ensure they are permitted as well.

Measures
♦ Cost of each horse racing permit issued or renewed

♦ Number of horse racing permits issued and renewed

• Assist in the growth of the pari-mutuel horse racing industry in Virginia.
Summary and Alignment

VRC takes all legally permissible actions to assist the non-profit industry stakeholder group, Virginia Equine Allianace, in obtaining approvals to advance the growth of satellite wagering facilities, in an effort to maintain and possibly increase the number of live race days. The amount paid in purses to the horse owners and the number of live race days is dependent on wagering revenue at the racetrack, satellite wagering facilities, and through advanced deposit account wagering. This goal aligns with VRC’s mission to grow the native horse racing industry with pari-mutuel wagering.

Associated State Goal
Economy: Be a national leader in the preservation and enhancement of our economy.
Associated Societal Indicator
Business Climate
Objectives
» Increase the tax revenue to the Commonwealth and local governments from pari-mutuel wagering.
Description

The Commonwealth and its localities hosting satellite wagering facilities and racetracks currently share in the tax revenue derived from pari-mutuel wagering. By growing the total wagering and the number of wagering outlets, an increase in revenue will be received by the Commonwealth and local governments.


Objective Strategies
• VRC encourages legal entrepreneurial endeavors related to pari-mutuel wagering. Wagers made on live horse racing in Virginia, at satellite wagering facilities, and through advanced deposit wagering featuring simulcast signals from other racetracks result in increased tax revenue for the Commonwealth and the localities hosting the various wagering facilities.

Measures
♦ Amount of pari-mutuel tax revenue received by the Commonwealth and localities

• Provide financial incentives to owners and breeders of Virginia-Bred horses.
Summary and Alignment

This goal provides financial incentives to breeders and owners of Virginia-bred horses and is intended to increase the number of racehorses foaled and raised in Virginia, which in turn helps to maintain open space and the agricultural industry of the Commonwealth. This goal aligns with VRC’s mission to grow the native horse racing industry.

Associated State Goal
Economy: Be a national leader in the preservation and enhancement of our economy.
Associated Societal Indicator
Business Climate
Objectives
» Increase and sustain the horse breeding industry in Virginia by awarding financial incentives to owners and breeders of Virginia-bred horses.
Description

Growing the breeding industry in Virginia is of critical importance to the horse racing industry in Virginia. Financial incentives to owners and breeders of Virginia-bred horses should encourage more horse owners and breeders to locate and remain in the Commonwealth of Virginia.


Objective Strategies
• Ensure the Virginia Thoroughbred Association and the Virginia Harness Horsemen Association meet the obligations of their contracts to promote and market their respective breeds. Also determine that awards distributed from the Breeders Fund are determined fairly and paid promptly in accordance with the Code of Virginia.

Measures
♦ Dollar amount of awards given to Virginia horse breeders and owners

♦ Number of awards to Virginia horse breeders and owners

 

VRC provides many important services related to horse racing with pari-mutuel wagering in Virginia. First, VRC is responsible for the issuance of licenses to own and operate a racetrack or satellite wagering facility and conducts public hearings, facility inspections, and background investigations of all applicants. Second, VRC monitors deposits to the Breeders Fund and the license tax to the Commonwealth and certain localities to assure compliance with the Code of Virginia. VRC also issues permits to the participants of horse racing with pari-mutuel wagering as well as to the employees of the Virginia Equine Alliance and provides Stewards/Judges to officiate the races and enforce the regulations pertaining to horse racing with pari-mutuel wagering. In addition, VRC collects blood and urine samples from selected horses to test for any prohibited or foreign substances that may affect their performance or the outcome of a race. Lastly, VRC provides financial incentives to the owners and breeders of Virginia-bred horses in an effort to increase the horse breeding and agricultural industries in Virginia.

 

Growing the breeding industry in Virginia is of critical importance to Virginia's horse racing and agricultural industries. Financial incentives to owners and breeders of Virginia-bred horses are paid to encourage more horse owners and breeders to locate and remain in the Commonwealth. The amount distributed to the owners and breeders as well as the number of awards decreased slightly in calendar year 2018 primarily due to a decline in the amount of wagering which took place at the racetracks and satellite wagering facilities, but should be increasing due to the opening of additional satellite wagering facilities.

Public protection and safety of horses is a high priority of the agency. Those directly involved in racing that may affect the outcome of a race may be tested for prohibited substances. VRC also collects samples from selected horses for drug testing. The number of tests performed on horses increased in calendar year 2018 because of more live race days than in prior years. The Commonwealth and its localities hosting satellite wagering facilities and racetracks currently share in the tax revenue derived from pari-mutuel wagering. By growing the industry, more revenue will be available to the Commonwealth and local governments. Although the amount of tax revenue has declined over the past eight years due to the economy, fewer live race days, and a dispute between Colonial Downs and the horsemen, which resulted in Colonial Downs turning in its licenses to operate a racetrack, satellite wagering facilities, and its own advanced deposit wagering system known as EZ Horseplay, this has increased recently due to the wagering at the satellite wagering facilities operated by the Virginia Equine Alliance. The cost of each permit issued increased marginally for fiscal year 2018. The number of permits issued declined and the agency's permitting costs went up, and therefore the cost per permit increased.

 
Authorized Maximum Employment Level (MEL)          10
Salaried Employees3
Wage Employees          19
Contracted Employees          0
 

Limited Number of Employees:

VRC currently is staffed by 3 full-time employees. Some cross-training opportunities do exist; however, career advancement possibilities are limited within the agency given its size.

Agency Results Dependent on Performance of Licensee:

The Virginia Equine Alliance and Virginia Gold Association are currently the only racetrack operators in Virginia with limited licenses and their performance and management decisions can directly affect how successfully VRC accomplishes some of its goals and objectives that are dependent on the number of live racing days each year.

Difficulty Securing Qualified Veterinarians:

It may be difficult for VRC to secure sufficient Associate Commission Veterinarians for future live race seasons. The Equine Medical Director is responsible for recruiting an adequate number of associate veterinarians to work the live race seasons at Shenandoah Downs and the two days of steeplechase racing at the Great Meadow Racecourse. It is difficult for the Equine Medical Director to retain veterinarians with horse experience who are available to work weekends for the brevity of the racing seasons. We have been very fortunate the last several years to employ veterinarians currently between other full-time assignments and hopefully we can continue this practice.

 
General Information About Ongoing Status of Agency

VRC's future direction is to continue performing the agency's services in an efficient and cost-effective manner. All staff positions are sufficiently filled at this time, given the current amount of racing and wagering activity in the Commonwealth. HB1609 was passed by the General Assembly during the 2018 session which authorizes Historical Horse Racing at the racetrack in New Kent and licensed satellite wagering facilities. This new form of pari-mutuel wagering will have an effect on the workload of the agency and more resources may be required which will be fully funded by the additional tax revenue received from the wagering on Historical Horse Racing.

Information Technology

VRC began using a new licensing system developed by the Association of Racing Commissioners International (ARCI) in March of 2013. The ARCI licensing system is provided free of charge for VRC to use as it is one of the benefits of being a member of ARCI. The ARCI licensing system does not use social security numbers and complies with the security standards of the Virginia Information Technologies Agency (VITA). The new licensing system has worked very well and proven to be a great improvement over the VRC's old system. In early February of 2014 VRC switched from a physical server to a virtual server. This transition to a virtual server was successful and will provide a significant cost benefit to the agency.

Estimate of Technology Funding Needs
Workforce Development

VRC currently has three full-time employees. There is minimal opportunity for cross-training and backup. Opportunities for career advancement are negligible. Also, because of Shenandoah Downs' location in rural Shenandoah County, the labor pool is sparse and there are a limited number of individuals in the Commonwealth who possess any knowledge and/or experience in horse racing with pari-mutuel wagering.

Physical Plant

In September of 2013 VRC moved its main administrative offices to the Ivor Massey Building located near the Richmond International Airport at 5707 Huntsman Road in Richmond, Virginia and has recently exercised an additional five year option on this location. During the live racing seasons VRC utilizes office space located near the stable area on the backside of Shenandoah Downs racetrack in Shenandoah County. Areas in this building dedicated to licensing, veterinarians, judges, and security are provided by the licensee, in accordance with VRC regulations.

 
TitleFile Type
 

Financial Assistance to the Horse Breeding Industry [53411]

This service area provides financial incentives to the breeders and owners of Virginia-bred horses.

 

This service area directly aligns to the Virginia Racing Commission's (VRC) mission to grow the native horse racing industry with pari-mutuel wagering in Virginia.

 

 
Description of Major Products and Services

Owner and Breeder Awards – Bonus checks issued to owners and breeders of Virginia-bred horses.

Products / Services
Product / ServiceStatutory AuthorityRegulatory AuthorityRequired Or DiscretionaryGFNGF
Owner and Breeder AwardsCOV 59.1-37211VAC10-130-20Required0240,000
Anticipated Changes

The funds available for breeder and owner awards are determined by the amount wagered at the racetrack, satellite wagering facilities (SWFs), and through advanced deposit wagering (ADW) by Virginia residents. VRC anticipates the funds available for the payment of awards may increase in conjunction with the openning of new SWFs.

Factors Impacting

The growth or decline of pari-mutuel wagering will directly impact the number and amount of awards issued to Virginia-bred horse owners and breeders which will in turn increase or decrease the incentive for individuals to breed horses in the Commonwealth of Virginia.

 

Section 59.1-372, Code of Virginia, requires that one percent of all pari-mutuel wagering be deposited into a separate fund to provide awards to breeders and owners of Virginia-bred Thoroughbred and Standardbred horses. These are nongeneral funds generated from pari-mutuel wagering at racetracks, satellite wagering facilities and through advanced deposit account wagering. VRC has fiduciary responsibility of these funds and awards contracts to the Virginia Thoroughbred Association (VTA) and the Virginia Harness Horse Association (VHHA) to administer and promote the funds on its behalf.

Biennial Budget
2019
General Fund
2019
Nongeneral Fund
2020
General Fund
2020
Nongeneral Fund
Initial Appropriation for the Biennium01,500,00001,500,000
Changes to Initial Appropriation0000
 
TitleFile Type
 

License and Regulate Horse Racing and Pari-mutuel Wagering [55801]

This service area regulates and oversees all aspects of pari-mutuel wagering and live horse racing. The Virginia Racing Commission (VRC) conducts proceedings for the issuing of licenses to racetracks, satellite wagering facilities, and advanced deposit wagering providers. Additionally, VRC issues permits to all participants of live horse racing, employees at racetracks, satellite wagering facilities, and officers and directors of licensed advanced deposit account wagering providers.

 

This service area directly aligns to VRC’s mission to promulgate regulations and conditions that command and promote excellence and honesty and integrity in racing and wagering.

 

 
Description of Major Products and Services

License Racetracks, Satellite Wagering Facilities, and Advance Deposit Account Wagering Providers – VRC conducts public hearings, facility inspections and background investigations on all license applications to own and operate a pari-mutuel wagering facility or to provide advance deposit account wagering services for Virginia residents.

Officiating – Stewards/Judges appointed and employed by VRC oversee and officiate live racing, certify the results of all races, conduct hearings, and issue rulings should disputes or violations occur. The stewards/judges also ensure that those individuals participating in horse racing obey the rules and regulations of VRC.

Regulations – Regulations are enforced, developed, and amended to ensure the highest standards of racing and wagering and are consistent with the racing industry throughout the United States.

Drug Testing – VRC veterinarians and test barn technicians collect blood and urine samples from horses selected by the Commission Stewards/Judges. Samples are submitted to the approved laboratory for testing by a chief racing chemist for any prohibited or foreign substances that may affect the performance of a horse and/or the outcome of a race.

Permitting - Individuals who participate in live horse racing, including employees of the racetrack, satellite wagering facilities, and officers and directors of advance deposit account wagering providers must complete a VRC application requiring pertinent information and criminal history. Fingerprints are taken for each applicant every five years and submitted to the Virginia State Police and the Federal Bureau of Investigation for criminal histories. VRC issues a photo identification badge to these individuals allowing them to access the premises and to participate in live horse racing and wagering.

Safety and Security – VRC ensures that a sufficient number of its staff is available to provide a secure and safe environment for the horses and participants in racing and wagering, including the general public. VRC employees also oversee and/or perform alcohol and drug testing on specific participants in horse racing as necessary. During live race season, there is surveillance of the grounds and activities involving horse racing by VRC staff.

Monitor deposits of the license tax to the Commonwealth and localities –VRC ensures that deposits of state tax, breeders fund contributions, and license fees are made in a timely manner and in the correct amount as required by the Code of Virginia.

Economic Development - VRC aspires to increase the number of breeding farms in Virginia by providing financial incentives to the owners and breeders of Virginia-bred horses. This should benefit the local economy by providing additional employment opportunities and assist in the growth of the agriculture industry in Virginia.

Products / Services
Product / ServiceStatutory AuthorityRegulatory AuthorityRequired Or DiscretionaryGFNGF
License Racetracks, Satellite Wagering Facilities, and Advance Deposit Account Wagering ProvidersCOV 59.1-36911VAC10-20, 11VAC10-40, 11VAC10-45Required00
OfficiatingCOV 59.1-36911VAC10-70-40Required0100,000
RegulationsCOV 59.1-369Required00
Drug TestingCOV 59.1-36911VAC10-180-100Required075,000
PermittingCOV 59.1-36911VAC10-60-10Required00
Safety and SecurityCOV 59.1-36911VAC10-60-10Discretionary0500
Monitor deposits of the license tax to the Commonwealth and localitiesCOV 59.1-392Required00
Economic DevelopmentCOV 59.1-37211VAC10-130-20Required00
Anticipated Changes

If the number of live race days increases, so will the workload of the VRC staff, its expenses, and the number of samples collected and submitted to the laboratory for testing. The sale of Colonial Downs and the implementation of Historical Horse Racing should increase the number of race days in the future.

Factors Impacting

If the amount of wagering increases so will the amount of money available for purses and as a result the number of live race days may increase as well. If this were to occur the costs of drug testing, officiating, security, and other expenses of the agency would all increase. The additional revenue from any increase in wagering received by VRC should enable it to cover the additional costs associated with an increase in the number of live race days.

 

 

Section 59-1-370.1, Code of Virginia, states that the total costs for the operation and administration of VRC shall be funded from the State Racing Operating Fund from the amounts provided for in the Appropriation Act. All funds are nongeneral and supported by revenue generated from pari-mutuel wagering.

Biennial Budget
2019
General Fund
2019
Nongeneral Fund
2020
General Fund
2020
Nongeneral Fund
Initial Appropriation for the Biennium01,688,65501,688,655
Changes to Initial Appropriation0000
 
TitleFile Type
 
SP - Run Date: 10/21/2020 03:09:59