§ 4038.5. Requirements for claim; determination by stewards.

(a) All claims shall be in writing, sealed in an envelope and deposited in a locked box provided for this purpose by the racing secretary or the racing secretary’s designee, at least 10 minutes before post time. Claim slip forms must be completely filled out and must, in the judgment of the stewards, be sufficiently accurate to identify the claim, otherwise the claim will be void. No money shall accompany the claim. Each person desiring to make a claim, unless the person has such amount to the person’s credit with the association, must first deposit with the association the whole amount of the claim, in a manner approved by the racing secretary or designee for which a receipt will be given. All claims shall be passed upon by the stewards. If more than one person should enter a claim for the same horse, then the disposition of the horse shall be decided by lot by the stewards. Claimed horses shall be taken after the race to the test barn for a determination of soundness and for any test samples to be collected. The person determined [at the closing time for claiming] by the stewards to have the right of claim shall become the owner of the horse when the [start is effected] race is started, whether the horse is sound or unsound or injured before or during the race or after the race, except that:

(1) the claim is voidable at the discretion of the new owner pursuant to the conditions stated in section 4038.19 of this Part unless the age or sex of such horse has been misrepresented, and subject to the provisions of subdivision (b) of this section;

(2) a claim shall be void for any horse that dies during a race or is euthanized on the track following a race; [and]

(3) a claim is voidable at the discretion of the new owner, for a period of one hour after the race is made official, for any horse that is vanned off the track after the race[.]; and

(4) a claim is voidable at the discretion of the new owner if the horse is placed on the veterinarian’s list following an examination by the State veterinarian or other veterinarian who has been designated by the commission to examine claimed horses in the test barn following the race for a determination of soundness for either of the following reasons:

(i) the horse is grade two lame or higher, meaning the lameness of the horse is consistently apparent under certain circumstances (e.g., weight carrying, circling, inclines, hard surface) even if such lameness is difficult to observe when the horse is at a walk or trotting in a straight line; or

(ii) the claimed horse has bled visibly from a nostril (epistaxis) that is attributable, because the bleeding is not caused wholly by a wound or superficial injury, to an episode of exercise induced pulmonary hemorrhage.

[In the event more than one person should enter a claim for the same horse, the disposition of the horse shall be decided by lot by the stewards. Any horse so claimed shall then be taken to the test barn for delivery to the claimant after any test sample is taken.]

Section 4038.17 of 9 NYCRR would be amended as follows:

§ 4038.17. Horses claimed—testing and post-race examination.

(a) If the claimant of a horse has requested post-race testing, at the expense of the claimant, on the claim form, then the stewards shall designate such horse for post-race testing pursuant to subdivision (b) of section 4012.3 of this Article. The original trainer shall remain responsible for the claimed horse until any on-track post-race sample collection has been completed.

1. Statutory authority: The New York State Gaming Commission (“Commission”) is authorized to promulgate these rules pursuant to Racing, Pari-Mutuel Wagering and Breeding Law (“Racing Law”) Sections 103(2)(d) and 104(1, 19). Under Section 103(2)(d), the Commission is responsible for supervising, regulating and administering all horse racing and pari-mutuel wagering activities in the State. Subdivision (1) of Section 104 confers upon the Commission general jurisdiction over all such gaming activities within the State and over the corporations, associations and persons engaged in such activities. Subdivision (19) of Section 104 authorizes the Commission to promulgate any rules and regulations that it deems necessary to carry out its responsibilities.

2. Legislative objectives: To preserve the safety and integrity of pari-mutuel racing while generating reasonable revenue for government.

3. Needs and benefits: This rulemaking is necessary to assure integrity, safety and public confidence in claiming races by reducing the incentive to use the claiming race process as a means to race and sell an unsound thoroughbred horse. The proposal would make it possible for a person who filed a claim to purchase such a horse to void the claim if the horse is lame or bleeds from a nostril (epistaxis) due to the exertions of the claiming race.

All claiming horses are offered for sale at a designated price in the claiming race in which they are entered by their owners. This offer may be accepted by putting a claim for the horse in the claim box before the race begins. If more than one such claim is filed for a horse, the claimant is chosen by lot. As soon as the horse starts the claiming race, title vests in the claimant. After the race, the stable that entered a claimed horse takes the horse to the test barn to be delivered to the claimant.

Recent claiming rule reforms adopted by the Commission have modified the traditional rule that claims are binding regardless of what happens to a claimed horse during the claiming race. Under the current rule, the claim is deemed void if the horse dies during the race or is euthanized on the track. 9 NYCRR § 4038.5(a)(2). In addition, the claimant has one hour to void the claim, should the claimant decide not to purchase the horse, if the horse is vanned off the track after the race. 9 NYCRR § 4038.5(a)(3). If the claim is voided, then title to the horse reverts to the original owner who entered the horse in the claiming race.

The rulemaking would provide a further reform by allowing the claimant to void the claim, before taking the horse at the test barn, if the horse is placed on the veterinarian’s list following an examination by the State or designated veterinarian because the horse is lame or has epistaxis due to exercise induced pulmonary hemorrhage (EIPH).

Under this new proposal, after an appropriate cooling out period before which lameness is not always apparent, the State veterinarian, who supervises the test barn, would examine the horse for lameness, i.e., an alteration of the horse’s gait, at the test barn. Such an examination would include a visual appraisal of the horse at rest and in motion on soft and hard surfaces. The veterinarian would determine whether the horse had grade two, or higher, lameness. The guidelines of the American Association of Equine Practitioners (AAEP) define “grade two” as lameness that is consistently apparent under certain circumstances (e.g., circling, on hard surface). By comparison, grade one lameness is not consistently apparent and grade three lameness is observable at a trot under all circumstances. The State veterinarian would also examine the horse for epistaxis caused by EIPH. This condition indicates a serious EIPH problem of the horse.

If the State or designated veterinarian determines that the horse has one or more of these conditions and places the horse on the veterinarian’s list, the claim would be deemed to have been voided by the claimant unless the claimant or a representative (e.g., trainer) of the claimant is present at the test barn to be informed of the determination of the State or designated veterinarian and, upon being informed of the veterinarian’s findings, decides immediately to accept the horse. This decision would not waive any other objections (e.g., for a post-race positive) that might later be identified as a possible objection to the claim.

The proposal would provide further protection for the welfare of racehorses by removing the incentive to enter a horse, prone to such conditions, in the hope the horse might be claimed. A claiming race provides an opportunity to sell a horse that is prone to EIPH or lameness upon participating in high-speed exercise, conditions that would not be apparent to the examining veterinarian during a standard pre-race examination. This proposal will make it less likely that a horse will be entered to race if the owner or trainer have concerns about the soundness of the horse to race. If such an owner and trainer cannot shift the ownership of a horse prone to lameness or epistaxis, due to the rigors of racing, to a claimant, then the incentive to enter such a horse in a claiming race is reduced.

The proposal also provides a medical benefit to claimed horses by providing a lameness examination of all claimed horses before they are taken to a new barn. A horse with a significant injury might not show clinical signs of the injury immediately following the race due to the presence of elevated levels of endorphins, which are natural painkillers, in the horse’s system, until the horse has cooled out. The proposal would permit for detection of significant lameness following a race while under the direct supervision of an independent regulatory veterinarian. A claimed horse otherwise might be put into a stall before the lameness is noticed and not receive appropriate medical and other care. The detection of epistaxis caused by EIPH, which may disappear shortly after racing, also permits appropriate care for a horse that has a serious EIPH problem.

The proposal resembles a California Horse Racing Board rule, 4 CCR 1658, except the proposal permits a claimant to accept the horse (or not) in view of its quality and the specific condition of the horse at the test barn. The California rule requires a claimant to make an election on the claim form, before the race, that the claimant will or will not take the horse regardless of such conditions.

The proposal would further require the original owner to remain responsible for the claimed horse until the horse has been examined and released to the new owner.

The proposal also makes some stylistic changes.

4. Costs:

(a) Costs to regulated parties for the implementation of and continuing compliance with the rule: None.

(b) Costs to the agency, the State and local governments for the implementation and continuation of the rule: None.

(c) The information, including the source(s) of such information and the methodology upon which the cost analysis is based: Commission staff reviewed the cost factors and determined that the rule can be implemented using the existing system for the transfer of claimed horses at the test barn in the presence of a state veterinarian, and for voiding a claim, and no additional costs will be added.

(d) Where an agency finds that it cannot provide a statement of costs, a statement setting forth the agency’s best estimate, which shall indicate the information and methodology upon which the estimate is based and the reason(s) why a complete cost statement cannot be provided. Not applicable.

5. Local government mandates: None. The New York State Gaming Commission is the only governmental entity authorized to regulate pari-mutuel harness racing activities.

6. Paperwork: There will be no additional paperwork. The process will rely on the existing administrative forms and processes for voiding a claim.

7. Duplication: No relevant rules or other legal requirements of the state and/or federal government exist that duplicate, overlap or conflict with this rule.

8. Alternatives. The Commission considered a similar rule in California, and largely followed this rule but decided to permit a claimant to decide after (rather than before) the race whether to accept a horse that becomes lame or shows epistaxis due to EIPH in the test barn. The proposal also differs from the California rule by specifying the observable injuries that permit a diagnosis that epistaxis has been caused by EIPH, rather than needing potentially to utilize an endoscopic examination. The Commission believes a differential diagnosis is sufficiently accurate.

9. Federal standards: There are no minimum standards of the federal government for this or a similar subject area.

10. Compliance schedule: Regulated persons will be able to achieve compliance with the rule upon publication of a Notice of Adoption in the New York State Register.

A regulatory flexibility analysis for small business and local governments, a rural area flexibility analysis, and a job impact statement are not required for this rulemaking proposal because it will not adversely affect small businesses, local governments, rural areas, or jobs.

The proposal would allow the claimant of a race horse to void the claim, before taking possession of the horse at the test barn after the claiming race, if the state veterinarian determines the horse is lame or suffered from a serious (bleeding from a nostril) episode of exercise induced pulmonary hemorrhage (EIPH) upon racing. If the claim is voided, the horse remains in the stable of the owner who raced the horse. This does not impose any additional duty upon the participants in horse racing, but will incentivize horse owners not to enter unsound horses in claiming races. The proposal will serve to enhance the health and safety of racehorses and the jockeys on race day.

This rule will not impose an adverse economic impact or reporting, record keeping, or other compliance requirements on small businesses in rural or urban areas or on employment opportunities. No local government activities are involved.