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Janell Cole column: Scrutiny of racing is not new

Calls for reform, new laws and legislative studies of horse racing regulation are inevitable in the wake of the troubles over Racing Services Inc. And that's even before we know the outcome of state and federal investigations into the company, wh...

Calls for reform, new laws and legislative studies of horse racing regulation are inevitable in the wake of the troubles over Racing Services Inc. And that's even before we know the outcome of state and federal investigations into the company, whether they be license revocation, indictments, lawsuits, bankruptcies or combinations we outsiders can only guess at.

RSI is being investigated by the U.S. Attorney for North Dakota and the state attorney general. The company under-reported revenues from betting which resulted in underpayments of taxes.

It's not the first time scrutiny of the horse racing sector has been called for. Two years ago, before any of us imagined the remarkable troubles that have cascaded down on the Fargo simulcast company, there were questions about the unique nature of the North Dakota Racing Commission. Not much came of it.

While discussing the attorney general's appropriations bill, the 2001 Legislature -- Sen. David Nething, R-Jamestown, in particular -- asked who oversees the Racing Commission. The answer: no one. The commission's budget lies within the attorney general's appropriation but there was no express oversight by the attorney general or anyone else beyond the commissioners themselves, the AG's chief of staff said.

The result: The Legislature that year made it clear that the attorney general has authority over the Racing Commission.

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The attorney general's office also told legislators there were questions about whether a commission that both promotes and regulates horse racing has an inherent conflict of interest.

An interim legislative committee was assigned to "study the Racing Commission, including its authority to schedule, promote, support and regulate live or simulcast racing" and whether it is "appropriate" for the commission to both promote and regulate.

Racing Director Paul Bowlinger told the interim committee that every other state's horse racing regulators operate the same way.

"I'm not sure how this study came about," he said on July 12, 2001. "Other than the fact that we're trying to build a track, we act like any racing commission in any state."

That was about it. The committee's staff collected and disseminated a lot of background material on the new Fargo track, the commission's funds, the state taxes on pari-mutuel betting and the history of different laws setting up the commission. Legislators toured the under-construction track.

Finally the committee only recommended license fees collected by the Racing Commission stay with the Racing Commission to fund its own activities rather than go to the general fund. That was it.

This is not to say the Legislature should be discouraged from taking another look at the commission or the industry. A cynical dismissal of "been there, done that" is out of date now that RSI is in hot water.

The urge by legislators and others to ask lots of questions is appropriate and responsible. As long as it doesn't deteriorate into yet another ridiculous chapter of the now tiresome tale of resentment over Fargo winning the track instead of Mandan.

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Cole is The Forum's Capitol correspondent in Bismarck. She can be reached at forumcap@btinet.net

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