Audit: Track Owners Shorted Horse Race Purses

ST. PAUL, Minn. (AP) — Operators of a Minnesota horse racing track shorted race purses by nearly $437,000 over four years during which regulators failed to adequately scrutinize the payouts, a state audit released Tuesday concludes.

Legislative Auditor James Nobles conducted a special review of the Minnesota Racing Commission's oversight of the Running Aces Harness Park in Columbus, north of the Twin Cities. His report said regulators took years to notice the track improperly calculated amounts that should have gone into purses for winning horse owners from 2008 to 2012. Nobles said in a phone interview that payments to bettors weren't at issue.

"They just weren't paying attention frankly," Nobles said of the racing commission.

Under state law, 8.4 percent of the wagering pool from live and simulcast racing is supposed to be set aside for the purses. The audit said the track deducted amounts for track expenses and profits before calculating the purse allocation. State regulators didn't realize there was a problem until May, 2013.

The public authority is under new management after some turbulent years. Its new leaders promised to tighten its controls and promptly seek to recover deficient payments.

"Commission leadership from the date of discovery in May 2013 was unequivocal in its position that purse contributions were substantially underpaid and impressed upon the parties the importance of resolution," Commission Chairman Ralph Strangis and Executive Director Thomas DiPasquale wrote in a joint response to Nobles.

In its own response attached to the audit, Running Aces General Manager Robert Farinella said the law governing purse set-asides is confusing and the track believes it was in compliance. He said track officials already sufficiently adjusted to account for past deficiencies, partly by paying a $100,000 settlement in the dispute and also making other financial accommodations. Farinella said the track would engage in negotiations with the commission to resolve any outstanding concerns.

Amanda Prutzman, an attorney for harness racing horse owners, said the group's members want a seat at the table during the negotiations.

House Commerce Committee Chairman Joe Atkins said he would hold a hearing in two weeks to take a deeper look at issues raised by the audit so legislators could "discuss steps to prevent this from happening again and to ensure there is absolute integrity and honesty in Minnesota racing."

The racing commission said Minnesota's other horse track, Shakopee's Canterbury Park, was in full compliance with the purse-calculation law. Nobles said his review was confined to Running Aces.

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