Judge Rules New Mexico Commission Halt Use of Purses to Pay Insurance

District Court Judge Victor S. Lopez determined in his Sept. 20 order that the New Mexico Racing Commission (NMRC) improperly required horsemen, through their purse accounts, to pay half of racetracks' insurance premiums for jockeys and exercise riders, in violation of state statute.

Since 2009, more than $9 million has been taken from purse accounts at New Mexico's five racetracks to use for the insurance premiums. In late 2020, the NMHA went to court to end the practice and to get all or a portion of the purse money returned.

“[The] reality is that the practice is being questioned now; the parties presented no authority supporting the proposition that a party somehow waives a rule-making overreach by the mere passage of time,” Judge Lopez wrote. “It is neither the Commission's nor this Court's role to decide and implement policy which would essentially allow the skimming of racing revenue for the admittedly favorable purpose of protecting jockeys and exercise riders who may sustain injuries in the course of engaging in the inherently dangerous profession of horse racing.”

Judge Lopez stayed his order until at least Mar. 18, the last day of the 2023 legislative session, “to allow the parties to consider legislative intervention, if appropriate.”

Gary C. Mitchell, general counsel for the New Mexico Horsemen's Association (NMHA), added, “The battle is over the political power of the racetracks that wish to cut down on the expenses of running a racetrack and a race meet and enjoy greater income from their casinos. The great advocate standing in their way is, and has always been, the Horsemen's Association and, hopefully, the New Mexico Legislature.”

To read the complete ruling, click here.

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Horsemen File Federal Suit Against New Mexico Commission

Edited Press Release

The New Mexico Horsemen's Association filed suit against the New Mexico Racing Commission in federal court late Monday, charging the regulatory body with depriving racehorse owners and trainers of their civil rights and other violations. The horsemen seek compensatory damages, legal fees and other relief the court deems appropriate.

“The horsemen finally said, 'Hold it. How many constitutional laws can you continue to violate? How many statutes can you continue to ignore?'” said Gary Mitchell, attorney for the New Mexico Horsemen's Association (NMHA). “The horsemen said, 'Enough. We don't have any other place to go but federal court. We need this to stop.'”

The NMHA, which represents about 4,000 Thoroughbred and Quarter Horse horsemen in New Mexico, already has two lawsuits pending in state court against the New Mexico Racing Commission (NMRC).

Previously precluded from communicating with the commission, contacting any commissioners or attending the regulatory agency's public meetings on, the NMHA turned to the federal court–filing against the NMRC, as well as the individual commissioners–under Section 1983 of the Civil Rights Act and the New Mexico Tort Claims Act. The action creates the potential for individual members of the commission to be held personally liable.

“The commissioners are deliberately attempting to do away with the horsemen's association,” Mitchell said. “We're prepared to prove, in court, that this is being done intentionally. They haven't hesitated to do everything in their power to shut out New Mexico's horsemen, and ultimately shut down the NMHA.”

The NMHA filed suit in the Second Judicial District Court in Bernalillo County in December to stop the commission's years-long practice of taking horsemen's purse money to pay the racetracks' liability insurance on jockeys and exercise riders, in clear violation of state law. The NMHA stated the funds amount to over $8 million. The horsemen returned to court in May after the commissioners ordered tracks to shut off the NMHA's revenue stream, derived from access to funds horsemen have earned from purses.

According to the NMHA, the funds in question are used to pay medical fees for its members, the NMHA's Political Action Committee and administrative costs, including the oversight of the purse account for the horsemen and the state's five racetracks.

“We have never taken money from the purse funds to benefit our organization,” Mitchell said. “In fact, we took our own money to pay for the accounting, collection, management, dispersal and annual audits of how this money is handled. The taxpayer was not paying for us to do all of this. We were doing it for free, paying for it through contributions from our members, and the commissioners now say 'stop.'”

He continued, “They wish to get their hands on this money and use it how they see fit–which is basically to pay the costs of running the racetrack, thereby allowing more money to go into the casinos' pockets. Sadly, the commission, which is supposed to be fair and equal to everybody, sees no obligation to be fair to the horsemen.

“Allowing gaming at racetracks in New Mexico was done to save racing,” Mitchell said. “The racetracks cannot have gaming unless they have racing. The law is very clear about it. The gaming compact is clear about it. The Gaming Control Act is clear about it. The Horse Racing Act is clear about it.”

Additionally, the NMHA states that funds have been directed into owners' earnings based on race results.

“When the race is run, the purse is paid and that now becomes the winning horseman's money,” said long-time racehorse owner and NMHA President Roy Manfredi. “By their actions, the racing commission has taken away the NMHA's ability to provide financial assistance to horsemen in need. That's the same as saying you cannot donate to the March of Dimes, the NRA or any other organization, simply because your employer doesn't like the March of Dimes or the other organization. Once the money is paid to an individual who owns a horse, that money is theirs and they can do whatever they want with it. During the pandemic, the NMHA provided $100,000 in alfalfa and grain to the horsemen when we weren't able to run.”

“All we've ever asked them to do is just follow New Mexico state statute, which are laws. This commission considers them suggestions.”

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‘Enough’: New Mexico Horsemen File Federal Lawsuit Against Commission

The New Mexico Horsemen's Association filed suit against the New Mexico Racing Commission in federal court late Monday, charging the regulatory body with depriving racehorse owners and trainers of their civil rights and other violations.

“The horsemen finally said, 'Hold it. How many constitutional laws can you continue to violate? How many statutes can you continue to ignore?'” said Gary Mitchell, attorney for the New Mexico Horsemen's Association (NMHA). “The horsemen said, 'Enough. We don't have any other place to go but federal court. We need this to stop.'”

The NMHA, which represents about 4,000 Thoroughbred and Quarter Horse horsemen in New Mexico, already has two lawsuits pending in state court against the New Mexico Racing Commission (NMRC).

Instead of working with horsemen to settle the dispute, the NMRC subsequently barred the NMHA from communicating with the commission, contacting any commissioners or attending the regulatory agency's public meetings. With no alternative after being deprived of any forum before the commission, the NMHA sought relief in federal court against the NMRC, as well as the individual commissioners, under Section 1983 of the Civil Rights Act and the New Mexico Tort Claims Act. A highly unusual step for a state horsemen's association, the action creates the potential for individual members of the commission to be held personally liable.

Mitchell said the commission is trying to silence the largest advocacy group under its jurisdiction.

“The commissioners are deliberately attempting to do away with the horsemen's association,” Mitchell said. “We're prepared to prove, in court, that this is being done intentionally. They haven't hesitated to do everything in their power to shut out New Mexico's horsemen, and ultimately shut down the NMHA.”

The NMHA filed suit in the Second Judicial District Court in Bernalillo County in December to stop the commission's years-long practice of taking horsemen's purse money to pay the racetracks' liability insurance on jockeys and exercise riders, in clear violation of state law. The transfer of purse money to pay track operating expenses has cost horsemen to date more than $8 million.

The horsemen were back in court in May after the commissioners ordered tracks to immediately shut off the NMHA's revenue stream, derived from access to funds horsemen have earned from purses.

The funds in question are used by the NMHA to pay medical fees for its members, the NMHA's Political Action Committee and administrative costs associated with a proper accounting for all expenditures. That includes the critical role of overseeing the purse account for the horsemen and the state's five racetracks.

“We have never taken money from the purse funds to benefit our organization,” Mitchell said. “In fact, we took our own money to pay for the accounting, collection, management, dispersal and annual audits of how this money is handled. The taxpayer was not paying for us to do all of this. We were doing it for free, paying for it through contributions from our members, and the commissioners now say 'stop.'”

Mitchell also questioned the commission's motivation.

“They wish to get their hands on this money and use it how they see fit – which is basically to pay the costs of running the racetrack, thereby allowing more money to go into the casinos' pockets,” he said. “Sadly, the commission, which is supposed to be fair and equal to everybody, sees no obligation to be fair to the horsemen.

“Allowing gaming at racetracks in New Mexico was done to save racing,” Mitchell said. “The racetracks cannot have gaming unless they have racing. The law is very clear about it. The gaming compact is clear about it. The Gaming Control Act is clear about it. The Horse Racing Act is clear about it.”

The NMHA challenges the commission's contention that the horsemen's organization is taking money designated for purses, pointing out that the money in question has transitioned into owners' earnings based on race results.

“When the race is run, the purse is paid and that now becomes the winning horseman's money,” said long-time racehorse owner and NMHA President Roy Manfredi. “By their actions, the racing commission has taken away the NMHA's ability to provide financial assistance to horsemen in need. That's the same as saying you cannot donate to the March of Dimes, the NRA or any other organization, simply because your employer doesn't like the March of Dimes or the other organization. Once the money is paid to an individual who owns a horse, that money is theirs and they can do whatever they want with it. During the pandemic, the NMHA provided $100,000 in alfalfa and grain to the horsemen when we weren't able to run.”

“All we've ever asked them to do is just follow New Mexico state statute, which are laws. This commission considers them suggestions.”

The horsemen seek compensatory damages, legal fees and other relief the Court may deem appropriate.

The post ‘Enough’: New Mexico Horsemen File Federal Lawsuit Against Commission appeared first on Horse Racing News | Paulick Report.

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Horsemen File Suit Against New Mexico Racing Commission

Edited Press Release

The New Mexico Horsemen's Association has taken additional legal action against the New Mexico Racing Commission after the regulatory body ordered the defunding of the organization that represents about 4,000 Thoroughbred and Quarter Horse owners and trainers in the state.

On May 20, the racing commission ordered tracks to withhold the 1% of purse money that goes to the horsemen's association for administrative costs, about $400,000 a year. Additionally, the commission ordered a halt to the $5 per-starter fee NMHA member owners pay toward medical expenses for horsemen and their employees, as well as a $2 per-starter fee utilized for legislative advocacy.

The horsemen's association responded three days later with its second suit in less than six months filed against the commission in the Second Judicial District Court in Bernalillo County. On Dec. 2, the NMHA went to court to ensure that the state's laws governing the distribution of purse monies are followed.

Horse owners have been charged a $100-$150 starter fee to cover certain track operation costs, including staffing the starting gate. The amount of money siphoned from purses to the racetracks dating to 2004 totals more than $8.4 million, which the horsemen's association is asking to be refunded to the purse account.

“I think we've been very reasonable in trying to negotiate settlements of litigation, and the commission has refused to negotiate in good faith” said Gary Mitchell, the attorney representing the horsemen's association. “It's a matter of people communicating, getting together, but the arrogance of the commissioners stands in the way.”

“This is a small state where we all know one another, as lawyers, as horsemen and as track owners,” Mitchell said. “There's no reason why somebody leading this couldn't get everybody together and say, 'We can iron out these problems.' We do need to figure out some way to insure jockey and exercise riders, outriders and people who work on the tracks, including grooms and such so these people will be safe and have insurance to cover their injuries and work loss. But we have no idea what the tracks are doing. We have no idea what the policies read. We just know that it's cost us a small fortune in purses, over $8 million.”

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