State of Arizona Department of Racing Annual Report FY 2006 Table Of Contents LETTER TO THE GOVERNOR ARIZONA RACING COMMISSION 1 AWARDS 2 DEPARTMENT OF RACING Department Organization Chart Commercial and County Fair Racing Chart 3 3 4 COMMERCIAL RACING Commercial Racing Permittees, Tracks and Permit Terms Chart Commercial Tracks Chart 5 5 6 COMMERCIAL HORSE RACING Investigations, Licensing, and Breeders & Stallion Awards Charts Commercial Horse Tracks Chart Rillito Park Chart Turf Paradise Chart Yavapai Downs Chart 7 7 8 9 10 11 COUNTY FAIR RACING Betterment Payments to Counties, Investigations, and Licensing Charts County Fair Tracks Chart County Fair Racing Schedule and Statistics 12 13 14 15 COMMERCIAL GREYHOUND RACING Investigations. Licensing, and Inspections Charts Breeders’ Awards and Greyhound Adoption Charts Commercial Greyhound Tracks Chart Apache Greyhound Park Chart Phoenix Greyhound Park Chart Tucson Greyhound Park Chart 16 16 17 18 19 20 21 TELETRACKING Teletrack Handle Chart Teletracking Activity – Commercial Horse Meets Chart Teletracking Activity – County Fair Meets Chart Teletracking Activity – Greyhounds Meets Charts 22 22 23 24 25 RACING REGULATION Licensing, Civil Penalties/Fines, and Stewards Rulings by Track Charts Director’s Rulings, Investigations, and Types of Investigations Charts Drug/Alcohol Abuse Investigations and Equine & Canine Drug Testing Charts Investigation File Backlog Fingerprint Backlog License by Category Chart 26 26 27 28 29 30 31 BOXING REGULATON Sanctioned Events, Licensing, and Investigations Charts 32 32 FINANCIAL ISSUES Department of Racing Budget Department Budget Chart, Department of Racing Revenues, and Distribution of Revenues to the Eight Separate Funds and Maximum Dollars Allowed Chart Distribution of Department of Racing Revenues Chart Department of Racing Revenues by Category Chart Appropriated and Non-Appropriated Funds Chart Department of Racing Pari-Mutuel Tax and Hardship Tax Credit Projections Chart Hardship Tax Credit Chart Track Capital Improvements Chart ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 34 35 37 38 39 40 41 42 ARIZONA DEPARTMENT OF RACING GEOFFREY E. GONSHER JANET NAPOLITANO GOVERNOR DIRECTOR September 29, 2006 The Honorable Janet Napolitano Governor of the State of Arizona 1700 West Washington Phoenix, Arizona 85007 Dear Governor Napolitano: It is my pleasure to submit the FY 2006 Department of Racing Annual Report. This report reflects statutory requirements as they relate to the Department’s regulatory, fiscal, and administrative responsibilities. Last year, the Department regulated and supervised horse and greyhound racing and pari-mutuel wagering at three commercial horse tracks, three greyhound tracks, fifteen county fair racing meetings, and 83 teletrack locations throughout Arizona. The total pari-mutuel handle for all racing was $285.4 million, an increase of $20.9 million or 7.9% from the prior year. The total pari-mutuel tax receipts amounted to $527,860, an increase of 9.1% from the prior year. FY 2006 continued to be a period of progress for the Department. The Department introduced more management and operational improvements that are consistent with the resources and regulations. With the continued support of your administration, our objective is to continue building on the following for a more responsive and effective operation in the future. • Regulate and supervise all pari-mutuel racing and wagering in order to protect participants and the wagering public. • Strengthen agency management to respect and follow the rules, regulations and statutes that protect the integrity of the racing industry. • Improve relationships with employees, permittees, licensees, and industry organizations to create partnerships to support the racing industry. 1110 West Washington, Suite 260 Phoenix, AZ 85007 Ph (602) 364-1700 Fax (602) 364-1703 www.azracing.gov ador@azracing.gov “AN EQUAL EMPLOYMENT OPPORTUNITY / AFFIRMATIVE ACTION EMPLOYER” The Honorable Janet Napolitano September 29, 2006 Page 2 As part of the annual report, the Department is required by statute to submit recommendations for increasing state revenues from the regulation of the racing industry while maintaining the financial health of the industry and protecting the public interest. These are challenges that the Department and the industry must confront together. During the past three legislative sessions, the Department has requested the generation of revenue from the industry to support its statutory, administrative, and regulatory duties. The Legislature, however, supported the continuation of General Fund dollars to meet these objectives. This year, the Department will propose various mechanisms in which racing permittees fund a portion of the Department operating costs related to racing regulation while reducing the need for General Fund monies. Currently, the racing industry does not provide sufficient revenue to the State to fund the Department’s responsibilities, creating a dependence on other revenue sources. Many other Arizona industries provide sufficient funding to the State to comply with their regulatory functions. We believe that the racing industry should also provide revenue for this purpose. The Department’s proposals will include modification of certain tax exemptions or tax credits currently available to the industry and the creation of an animal drug testing fund that will benefit from a fee from each permittee for each race horse and greyhound entered in a race. The Racing Department is committed to performing all statutory and regulatory duties in a manner that brings respect to the agency and the industry. Your continued support is greatly appreciated. Sincerely, Geoffrey E. Gonsher Director GEG/nm Arizona Racing Commission The Arizona Racing Commission was established in 1949 by the Arizona Legislature. The Racing Commission is responsible for issuing racing dates; preparing and adopting rules to govern racing meetings as may be required to protect and promote the safety and welfare of the animals participating in racing meetings; protecting and promoting public health, safety and the proper conduct of racing and pari-mutuel wagering; conducting hearings on applications for racing permits; reviewing applications for capital improvements at racetracks; and conducting hearings and other legal procedures on matters relating to racing licensees and the racing industry. Arizona Revised Statutes § 5-102 authorizes a five-member Racing Commission, who shall be appointed by the Governor pursuant to A.R.S. § 38-211. Appointment is for a term of five years. Burton Kruglick, Racing Commission Chairman, is serving as a representative of the Dog Racing Industry. Mr. Kruglick was appointed to the Commission in 1997, and has served one year as Chairman and three years as Vice-Chairman. Mr. Kruglick has been active in Arizona government and politics for many years, serving as Chairman of the Arizona Republican Party from 1985 through 1991. He has been appointed to several Commissions and Boards over the years and is an active participant in community and philanthropic organizations. James N. Chilcoat, Sr., Racing Commission Vice-Chairman, was appointed to the Racing Commission in 2005 to serve as a public member. Mr. Chilcoat retired from the Arizona Department of Public Safety after 30 years of service. During his career, he worked in Highway Patrol, Intelligence, Fiscal Management, Legislation, and retired at the rank of Assistant Director. Mr. Chilcoat has attended numerous law enforcement seminars and programs, including the FBI National Academy, to enhance his knowledge and expertise in several areas of criminal justice. Bob Ford, was appointed to the Commission in 2001, served as Vice-Chairman for two years and one year as Chairman. Serving as a public member to fill the seat vacated by Michael Vespoli, Mr. Ford comes from a family with over 50 years in the horseracing industry. Mr. Ford has worked at tracks in several positions, gaining first-hand knowledge that serves him well on the Commission. Retired from the City of Phoenix Fire Department, Mr. Ford currently serves on the City of Phoenix Planning Commission. Erin Owens-Hall was appointed to the Racing Commission in 2005 to serve as the representative of the Horse Racing Industry. Ms. Owens-Hall was raised in the ranching and racing industry in Arizona. She spent several years in official positions at Canterbury Downs, San Juan Downs, Columbus Racetrack, and Turf Paradise. Ms. Owens-Hall is currently Director of Enrollment and Enrollment Manager at the University of Phoenix and supervises a staff of over 100 employees with responsibility for a total budget of $9.2 Million. Paul Ulan. Mr. Ulan is the principal of Primary Consultants, L.L.C., a Phoenix-based market research consulting firm specializing in political campaign management, phone banks, public affairs and issue management. Mr. Ulan has specialized in bond and override elections for school districts and tax-related elections, performing a variety of services including polling, demographics and public relations. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 1 Awards HORSERACING INDUSTRY AWARDS The Racing Commission adopted a new program to recognize individuals for service to the horseracing industry. The following awards were presented at the December 14, 2005 Commission meeting. Recognition of Excellence Award. J. Lloyd Yother, President, AQRA Lifetime Achievement Award. Lyman Rollins, owner-trainer GREYHOUND INDUSTRY AWARDS The Racing Commission adopted a new greyhound racing industry recognition program. The following awards were presented at the December 14, 2005 Commission meeting. Lifetime Achievement Award. Maxine Willis, Greyhound owner, trainer Recognition of Excellence Award. Charlie Sample, Greyhound trainer (posthumous) DEPARTMENT OF RACING EMPLOYEE RECOGNITION AWARDS Governor Janet Napolitano proclaimed State Employee Recognition Day in Arizona to honor the dedication and commitment of all State employees. In the spirit of the Governor’s proclamation, the Department of Racing announced a new Employee Recognition Program. The purpose of the program is to say “thank you,” “well done,” “we value you as an employee,” and to acknowledge exemplary employee service and outstanding employee contributions that support the agency mission. FY 2006 Awards Employee of the Year Award. Marcelina “Marcey” Katon, Administrative Assistant John Adams, Administrative Assistant Supervisor of the Year Award. Rita Fresquez, Chief Horseracing Steward Team of the Year Award. Pam Niederkorn, Audit Manager Rachael Richie, Pari-Mutuel Auditor FY 2005 Awards Employee of the Year Award. Kathryn “Katie” Kenfield, Examiner Technician II Supervisor of the Year Award. Bryan Stoyer, Chief Greyhound Steward Team of the Year Award. Andy Carlton, DVM, Veterinarian Supervisor Cynthia Toering, DVM, Veterinarian FY 2004 Awards Employee of the Year Award. Eddie Rosano, Assistant Steward Supervisor of the Year Award. Andy Carlton, DVM, Veterinarian Supervisor Team of the Year Award. Accounting Staff Amy Besco, Fiscal Services Specialist III Karri Hernandez, Fiscal Services Specialist II Pearl Pistiner, Administrative Services Officer I FY 2003 Awards Employee of the Year Award. Norma Rivero, Accounting Technician III Supervisor of the Year Award. Gerry Howard, Chief Horse Racing Steward (posthumous) Team of the Year Award. Tucson Greyhound Park Stewards Mike Brimmer, Chief Steward Eddie Rosano, Assistant Steward Katherine Vasco, Assistant Steward ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 2 Department Of Racing The primary mission of the Department of Racing is to regulate and supervise pari-mutuel horse and greyhound racing and wagering conducted in Arizona in order to protect racing participants and the wagering public. In addition, the Department regulates and supervises boxing events conducted in Arizona to protect participants in these events. GOVERNOR BOXING COMMISSION RACING COMMISSION DIRECTOR BOXING REGULATION ADMINISTRATION ENFORCEMENT & COMPLIANCE ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 3 RACING SERVICES COMMERCIAL AND COUNTY FAIR RACING Commercial Horse, Greyhound and County Fair Racing RACING STATISTICS FY 2002 Race Days/Performances (including 12 Charity Days) Live Race Days Dark Day-Simulcast only Total Race Days FY 2003 FY 2004 FY 2005 FY 2006 1,001 588 1,589 981 611 1,592 988 605 1,593 897 697 1,594 933 662 1,595 1,005 1,010 988 897 933 13,534 212,803 226,337 13,534 230,028 243,562 12,871 265,248 278,119 11,778 263,586 275,364 12,851 262,275 275,126 Attendance On-Track Off-Track Total Attendance 810,454 855,374 1,665,828 843,474 838,310 1,681,784 852,987 848,157 1,701,144 768,582 905,002 1,673,584 819,425 1,022,623 1,842,048 Pari-Mutuel Handle Average Handle per Race Day $172,579 $166,823 $165,786 $165,974 $178,946 Breakdown by location On-Track Handle Off-Track Handle $102,322,446 $171,906,178 $98,925,176 $166,657,437 $96,023,226 $168,073,643 $88,766,221 $175,795,847 $90,944,292 $194,474,484 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $95,785,970 178,442,654 $274,228,624 $86,628,828 178,953,785 $265,582,613 $78,573,084 185,523,785 $264,096,869 $81,251,006 183,311,061 $264,562,067 $87,686,434 197,732,342 $285,418,776 $214,510,744 $204,188,047 $203,820,895 $204,344,382 $219,060,582 Total Live Performances (Matinee & Evening) Number of Races Live Races Simulcast Races Total Number of Races DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues $757,662 $628,564 $565,191 $483,901 $527,860 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Capital Improvement AGP Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit AGP-Hardship Tax (Transferred to PGP) Breakage Total Track Revenues $54,840,464 561,913 339,609 0 63,297 1,901,210 0 1,226,711 $58,933,204 $52,770,892 248,590 116,933 0 69,660 2,230,937 0 1,136,083 $56,573,095 $52,677,260 79,377 0 0 69,895 2,261,865 0 1,175,091 $56,263,488 $53,130,250 88,296 0 0 87,259 2,418,044 0 1,139,347 $56,863,196 $57,052,294 89,991 0 0 71,464 2,653,989 0 1,221,958 $61,089,696 Purses $24,187,316 $20,842,682 $20,497,445 $20,708,997 $22,314,331 Racetrack Trends at a Glance On-Track On-Track vs. Off-Track Handle Simulcast $250 $250 $200 $200 Million Million Source of Handle Live Off-Track $150 $100 $150 $100 $50 $50 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 4 FY 2004 FY 2005 FY 2006 Commercial Racing The Department of Racing regulates and supervises all commercial horse and greyhound racing meetings and pari-mutuel wagering conducted on- and off-track in Arizona to enforce laws and regulations and to protect racing participants and the wagering public. In FY 2006, the Arizona Racing Commission approved a three-year commercial racing permit for Rillito Park. Rillito’s dates for 2007 are pending. TP Racing, L.L.L.P. filed a new application for commercial racing at Turf Paradise during FYs 2007, 2008 and 2009. By statute, Turf Paradise may continue to operate under the permit issued TP Racing, L.L.L.P. until the Arizona Racing Commission, upon recommendation by the Department, has finally ruled on the application. Commercial Racing Permittees, Tracks and Permit Terms Permittee Track Permit Term American Greyhound Racing, Inc. Apache Greyhound Park 01/01/05 - 12/31/07 American Greyhound Racing, Inc. Phoenix Greyhound Park 01/01/05 - 12/31/07 Pima County Horsemen’s Association Rillito Park 02/05/05 - 2007 Tucson Greyhound Park, Inc. Tucson Greyhound Park 01/01/05 - 12/31/07 TP Racing, L.L.L.P. Turf Paradise Race Course 06/01/03 - 05/31/06 Western Racing, Inc. Phoenix Greyhound Park 01/01/05 - 06/08/05 Yavapai County Fair Association Yavapai Downs at Prescott Valley 05/29/04 - 09/01/06 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 5 COMMERCIAL TRACKS Commercial Horse and Greyhound Racing RACING STATISTICS FY 2002 Race Days/Performances (including 12 Charity Days) Live Race Days Dark Day-Simulcast only Total Race Days FY 2003 FY 2004 FY 2005 FY 2006 943 586 1,529 921 609 1,530 927 603 1,530 835 695 1,530 874 659 1,533 947 950 927 835 874 13,029 211,006 224,035 13,028 227,928 240,956 12,358 262,400 274,758 11,244 260,574 271,818 12,332 259,747 272,079 Attendance On-Track Off-Track Total Attendance 691,411 801,961 1,493,372 737,567 780,311 1,517,878 725,228 789,343 1,514,571 640,640 834,294 1,474,934 690,948 949,002 1,639,950 Pari-Mutuel Handle Average Handle per Race Day $167,509 $161,673 $160,457 $159,162 $172,643 Breakdown by location On-Track Handle Off-Track Handle $94,376,373 $161,744,757 $91,610,048 $155,749,842 $88,355,137 $157,143,398 $80,337,461 $163,180,209 $82,814,154 $181,847,949 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $89,292,335 166,828,795 $256,121,130 $80,765,076 166,594,814 $247,359,890 $72,812,408 172,686,127 $245,498,535 $74,986,000 168,531,669 $243,517,669 $81,471,551 183,190,552 $264,662,103 $200,150,196 $189,919,817 $189,272,455 $187,771,621 $203,192,511 $757,662 $628,564 $565,191 $483,901 $527,860 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Capital Improvement AGP Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit AGP-Hardship Tax (Transferred to PGP) Breakage Total Track Revenues $51,191,723 561,913 339,609 0 63,297 1,901,210 0 1,128,504 $55,186,256 $49,185,569 248,590 116,933 0 69,660 2,230,937 0 1,046,447 $52,898,136 $49,022,251 79,377 0 0 69,895 2,261,865 0 1,075,131 $52,508,519 $48,956,413 88,296 0 0 87,259 2,418,044 0 1,026,349 $52,576,361 $52,948,454 89,991 0 0 71,464 2,653,989 0 1,110,798 $56,874,696 Purses $20,538,575 $18,842,906 $18,435,371 $18,523,133 $20,107,799 Total Live Performances (Matinee & Evening) Number of Races Live Races Simulcast Races Total Number of Races DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track vs. Off-Track Handle Live Source of Handle Simulcast $200 $200 $180 $180 $160 $160 $140 $140 $120 $120 Million Million On-Track Off-Track $100 $80 $100 $80 $60 $60 $40 $40 $20 $20 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 6 FY 2003 FY 2004 FY 2005 FY 2006 Commercial Horse Racing The Department of Racing is responsible for regulating and supervising all commercial horse racing meetings, conducting investigations, issuing licenses, conducting equine and human drug testing, overseeing wagering, hearing appeals of decisions, conducting hearings on investigation referrals and race incidents, collecting revenues for the State, and distributing awards to program recipients. Investigations The Department investigates possible violations of racing laws and rules and imposes administrative sanctions on those determined to have committed violations. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures FY 2004 FY 2005 FY 2006 565 100% 410 100% 411 99% 261 276 195 72% 86% 99% Number of rulings issued Percent of original actions upheld on appeal Number of investigations conducted regarding compliance with rules Percent of investigations resulting in disciplinary action Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. Licenses are denied for those who are undesirable or statutorily prohibited from participating. Performance Measures FY 2004 FY 2005 FY 2006 3,157 6 337 15% 3,941 4 168 71% 2,229 9 572 85% 100% 100% 99% Number of licenses issued Number of licenses denied Number of investigations conducted regarding licensing Percentage of background investigations resulting in disciplinary action Percent of license denials upheld on appeal Breeders & Stallion Awards The Department encourages and promotes horse breeding in Arizona through the administration of and distribution to recipients of funds available through Breeders and Stallion Awards Programs. Performance Measures Number of registered breeders Percent of registered breeders winning awards Number of registered horses Percent of registered horses winning awards Quarter Horse Breeders’ Awards Thoroughbred Breeders’ Awards Stallion Awards FY 2004 FY 2005 FY 2006 3,184 14% 5,239 5% $39,369 $419,357 $40,000 2,491 5% 5,590 5% $38,691 $418,126 $39,991 3,279 8% 6,034 6.5% $34,585 $434,823 $37,374 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 7 COMMERCIAL HORSE TRACKS Rillito Park, Turf Paradise, Yavapai Downs RACING STATISTICS FY 2002 Race Days/Performances (including 3 charity days) Live Race Days Dark Day-Simulcast Only Total Race Days FY 2003 FY 2004 FY 2005 FY 2006 208 235 443 211 236 447 208 232 440 201 242 443 207 239 446 208 211 208 201 207 1,989 32,429 34,418 2,079 37,039 39,118 1,866 44,178 46,044 1,872 46,735 48,607 1,875 47,514 49,389 425,821 513,002 938,823 406,922 511,907 918,829 415,823 543,899 959,722 380,465 581,299 961,764 432,654 683,821 1,116,475 $353,324 $349,557 $364,636 $364,857 $402,987 $58,975,299 $97,547,150 $58,231,225 $98,020,838 $57,798,008 $102,641,830 $55,917,152 $105,714,653 $58,639,790 $121,092,552 $36,360,266 120,162,183 $156,522,449 $32,550,698 123,701,365 $156,252,063 $29,381,769 131,058,069 $160,439,838 $29,905,601 131,726,204 $161,631,805 $32,503,981 147,228,362 $179,732,342 $124,128,643 $120,365,579 $124,211,953 $125,373,998 $138,105,510 $595,011 $528,708 $480,282 $483,901 $527,860 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues $30,883,355 107,288 0 14,628 10,279 783,247 $31,798,797 $30,943,734 93,873 0 12,935 15,498 780,344 $31,846,384 $31,866,767 79,377 0 11,869 16,114 828,287 $32,802,413 $32,537,928 88,296 0 10,949 14,932 796,754 $33,448,859 $36,050,363 89,991 0 15,413 16,825 889,107 $37,061,698 Purses $14,974,184 $14,090,151 $13,954,044 $14,130,954 $15,515,306 Total Live Performances Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day Breakdown by location On-Track Handle Off-Track Handle Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Live Simulcast On-Track vs. Off-Track Handle $160 $120 $140 $100 $120 Million Million $140 $80 $60 Source of Handle $100 $80 $60 $40 $40 $20 $20 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 8 FY 2003 FY 2004 FY 2005 FY 2006 RILLITO PARK 4502 North First Avenue Tucson, Arizona 85728 Pima County Fair Horse Racing Commission RACING STATISTICS FY 2002 Race Days/Performances Live Race Days Dark Day-Simulcast Only Total Race Days FY 2003 FY 2004 FY 2006 Racing Dates: February 4, 2006 - March 5, 2006 FY 2005 FY 2006 6 0 6 10 0 10 9 0 9 9 0 9 9 0 9 6 10 9 9 9 55 0 55 91 0 91 84 0 84 86 0 86 83 0 83 16,446 0 16,446 23,453 0 23,453 24,569 0 24,569 36,238 0 36,238 40,705 0 40,705 $85,657 $77,492 $89,521 $82,955 $93,470 Breakdown by location On-Track Handle Off-Track Handle $513,941 $0 $774,915 $0 $805,693 $0 $746,592 $0 $841,230 $0 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $513,941 0 $513,941 $774,915 0 $774,915 $805,693 0 $805,693 $746,592 0 $746,592 $841,230 0 $841,230 $396,671 $597,804 $621,883 $575,682 $643,248 $0 $0 $0 $0 $0 $102,977 0 0 0 10,279 4,014 $117,270 $155,644 0 0 0 15,498 5,969 $177,111 $161,251 0 0 0 16,114 6,445 $183,810 $150,150 0 0 0 14,932 5,828 $170,910 $175,287 0 0 0 16,825 5,871 $197,982 $92,922 $173,139 $165,283 $205,624 $189,054 Total Live Performances Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues Purses Racetrack Trends at a Glance On-Track Off-Track On-Track vs. Off-Track Handle Source of Handle Live Simulcast $1 $4 Million Million $3 $2 $1 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 9 FY 2004 FY 2005 FY 2006 TURF PARADISE 1501 West Bell Road Phoenix, Arizona 85023 TP Racing, L.L.L.P. RACING STATISTICS FY 2002 Race Days/Performances (including 3 charity days) Live Race Days Dark Day-Simulcast Only Total Race Days FY 2006 Racing Dates: July 1, 2005-June 30, 2006 FY 2003 FY 2004 FY 2005 FY 2006 151 195 346 152 196 348 154 194 348 144 202 346 151 197 348 151 152 154 144 151 1,492 29,044 30,536 1,551 33,329 34,880 1,388 40,325 41,713 1,356 42,852 44,208 1,375 43,371 44,746 333,776 371,515 705,291 314,606 374,886 689,492 324,061 408,908 732,969 301,100 407,370 708,470 331,511 473,525 805,036 $366,969 $366,991 $382,892 $378,807 $419,562 $56,603,892 $70,367,367 $55,788,355 $71,924,499 $55,502,312 $77,744,086 $53,625,809 $77,441,273 $56,037,345 $89,970,068 $30,481,949 96,489,310 $126,971,259 $27,082,151 100,630,703 $127,712,854 $24,607,228 108,639,170 $133,246,398 $24,744,198 106,322,884 $131,067,082 $27,163,223 118,844,190 $146,007,413 $100,733,160 $98,413,195 $103,130,018 $101,896,223 $112,372,468 $595,011 $528,708 $480,282 $483,901 $527,860 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues $25,004,970 0 0 14,628 0 623,491 $25,643,089 $25,275,721 0 0 12,935 0 632,473 $25,921,129 $26,422,880 0 0 11,869 0 692,750 $27,127,499 $26,370,398 0 0 10,949 0 645,789 $27,027,136 $29,267,373 0 0 15,413 0 721,384 $30,004,169 Purses $12,934,104 $11,878,800 $11,834,760 $11,690,443 $12,841,141 Total Live Performances Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day Breakdown by location On-Track Handle Off-Track Handle Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Live On-Track vs. Off-Track Handle Source of Handle Simulcast $140 $100 $90 $120 $100 $70 $60 Million Million $80 $50 $40 $30 $80 $60 $40 $20 $20 $10 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 10 FY 2004 FY 2005 FY 2006 YAVAPAI DOWNS 10501 Hwy. 89A Prescott Valley, Arizona 86314 RACING STATISTICS Yavapai County Fair Association FY 2002 Race Days/Performances Live Race Days Dark Day-Simulcast Only Total Race Days FY 2003 FY 2006 Racing Dates: July 6, 2005 - September 2, 2005 May 27, 2006 - June 29, 2006 FY 2004 FY 2005 FY 2006 51 40 91 49 40 89 45 38 83 48 40 88 47 42 89 51 49 45 48 47 442 3,385 3,827 437 3,710 4,147 394 3,853 4,247 430 3,883 4,313 417 4,143 4,560 75,599 141,487 217,086 68,863 137,021 205,884 67,193 134,991 202,184 43,127 173,929 217,056 60,438 210,296 270,734 $319,091 $311,958 $317,925 $338,842 $369,480 Breakdown by location On-Track Handle Off-Track Handle $1,857,466 $27,179,783 $1,667,955 $26,096,339 $1,490,003 $24,897,744 $1,544,751 $28,273,380 $1,761,215 $31,122,484 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $5,364,376 23,672,873 $29,037,249 $4,693,632 23,070,662 $27,764,294 $3,968,848 22,418,899 $26,387,747 $4,414,811 25,403,320 $29,818,131 $4,499,528 28,384,172 $32,883,699 $22,998,812 $21,354,580 $20,460,052 $22,902,092 $25,089,795 Total Live Performances Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day DISTRIBUTION OF REVENUES Returned to Wagering Public $0 $0 $0 $0 $0 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues $5,775,408 107,288 0 0 0 155,742 $6,038,438 $5,512,369 93,873 0 0 0 141,902 $5,748,144 $5,282,636 79,377 0 0 0 129,092 $5,491,104 $6,017,380 88,296 0 0 0 145,136 $6,250,812 $6,607,704 89,991 0 0 0 161,852 $6,859,546 Purses $1,947,158 $2,038,212 $1,954,001 $2,234,887 $2,485,110 State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Live Simulcast On-Track vs. Off-Track Handle $35 Source of Handle $30 $30 Million Million $25 $25 $20 $20 $15 $15 $10 $10 $5 $5 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 * Prescott Downs through 2001 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 11 FY 2004 FY 2005 FY 2006 County Fair Racing The Department of Racing is responsible for regulating and supervising all county fair horse racing meetings, providing staff to operate race meetings, conducting investigations, issuing licenses, conducting equine and human drug testing, overseeing wagering, conducting hearings on investigation referrals, and collecting revenues for the State. The Department of Racing recognizes that county fair racing is an important component of the Arizona racing industry. The racing fans and general public who attend have an enjoyable time. The horse owners, grooms, jockeys, and others are able to experience a competitive environment. Local communities also benefit from the economic and entertainment value of the races. An economic impact report submitted to the Commission concluded that 36,700 fans attended county fair race events in FY 2002. In addition, this segment of the racing industry had a total economic impact of $22.7 million. In FY 2006, the Commission approved 9 applications for three-year county fair racing permits. In FY 2006, a total of $1.13 million was available for county fair racing activities. County fair racing is supported by the following two fund sources: County Fair Racing. This appropriated fund, used for the administration of county fair racing, is generated by 9% of all pari-mutuel receipts, license fees, and State unclaimed property up to $300,000 annually. In FY 2006, this fund received $300,000, and $299,875 was spent for the program administration. County Fair Racing Betterment. This non-appropriated fund provides purse subsidy and betterment grants to every eligible county fair association for conducting county fair racing meetings. The fund receives 22% of all pari-mutuel receipts, license fees, and State unclaimed property up to $800,000 annually. In FY 2006, this fund received $800,000, and $819,500 was distributed. Some counties benefited from a portion of prior years’ carryover. Four of the ten counties conducting a meet in FY 2006 received $51,400 each to subsidize purses; the remaining counties received $46,800, each. Five counties conducted their meets at commercial tracks and did not receive funding for this purpose. Ten counties received either $23,050, $24,250, $35,025, or $35,825 each in Betterment Grants last year. These funds were used for personnel, maintenance, security, emergency medical services, marketing, and other operating expenses. The five counties that conducted their racing at commercial sites were not entitled to the funds. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 12 County Fair Racing Betterment Payments to Counties Purses $51,400 46,800 46,800 51,400 46,800 46,800 0 0 46,800 0 51,400 0 46,800 51,400 0 Betterment $35,825 35,825 35,025 35,825 35,825 35,825 0 0 35,825 0 23,050 0 35,825 24,250 0 Total $87,225 82,625 82,625 87,225 82,625 82,625 0 0 82,625 0 74,450 0 82,625 75,650 0 $486,400 $333,100 $819,500 County Apache County Cochise County Coconino County Gila County Graham County Greenlee County La Paz County Maricopa County Mohave County Navajo County Pima County Pinal County Santa Cruz County Yavapai County Yuma County Investigations The Department investigates possible violations of racing laws and rules and imposes administrative sanctions on those determined to have committed violations. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures Number of rulings issued Percent of original actions upheld on appeal Number of investigations conducted regarding compliance with rules FY 2004 FY 2005 FY 2006 64 100% 41 100% 41 100% 19 23 58 62% 83% 93% Percentage of investigations resulting in disciplinary or enforcement action Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. Licenses are denied for those who are undesirable or statutorily prohibited from participating. Performance Measures FY 2004 FY 2005 FY 2006 420 1 43 715 1 23 325 0 52 20% 9% 75% 100% 100% 100% Number of licenses issued Number of licenses denied Number of investigations conducted regarding licensing Percent of background investigations resulting in disciplinary or enforcement action Percent of license denials upheld on appeal ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 13 COUNTY FAIR TRACKS County Fair Racing at Fairs and Commercial Tracks RACING STATISTICS FY 2002 Race Days/Performances Live Race Days Dark Day-Simulcast Only Total Race Days Total Live Performances Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day FY 2003 FY 2004 FY 2005 FY 2006 58 2 60 60 2 62 61 2 63 62 2 64 59 3 62 58 60 61 62 59 505 1,797 2,302 506 2,100 2,606 513 2,848 3,361 534 3,012 3,546 519 2,528 3,047 119,043 53,413 172,456 105,907 57,999 163,906 127,759 58,814 186,573 127,942 70,708 198,650 128,477 73,621 202,098 $301,792 $293,915 $295,212 $328,819 $334,785 Breakdown by location On-Track Handle Off-Track Handle $7,946,073 $10,161,421 $7,315,128 $10,907,595 $7,668,089 $10,930,245 $8,428,760 $12,615,638 $8,130,138 $12,626,535 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $6,493,635 11,613,859 $18,107,494 $5,863,752 12,358,971 $18,222,723 $5,760,676 12,837,658 $18,598,334 $6,265,006 14,779,392 $21,044,398 $6,214,883 14,541,789 $20,756,673 $14,360,548 $14,268,230 $14,548,440 $16,572,761 $15,868,071 DISTRIBUTION OF REVENUES Returned to Wagering Public $0 $0 $0 $0 $0 Track Mutuel Revenues Track Commission Breakage Total Track Revenues $3,648,741 98,207 $3,746,948 $3,585,323 89,636 $3,674,959 $3,655,009 99,960 $3,754,969 $4,173,837 112,998 $4,286,835 $4,103,839 111,160 $4,214,999 Purses $3,648,741 $1,999,776 $2,062,074 $2,185,863 $2,206,532 State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Source of Handle $16 $14 $14 $12 $12 Million $10 Million Live Simulcast On-Track vs. Off-Track Handle $10 $8 $6 $8 $6 $4 $4 $2 $2 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 14 FY 2004 FY 2005 FY 2006 County Fair Racing Schedule and Statistics FY 2006 Race Days ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 15 Fairs at Non-Commercial Tracks Coconino County Fair at Flagstaff June 30, July 1, 2, 3, 4, 5, 2005 Apache County Fair at St. Johns September 17, 18, 24, 25, 2005 Gila County Fair at Globe October 1, 2, 8, 9, 2005 Greenlee County Fair at Duncan March 11, 12, 18, 19, 2006 Graham County Fair at Safford March 25, 26, April 1, 2, 2006 Cochise County Fair at Douglas April 8, 9, 22, 23 2006 Santa Cruz County Fair at Sonoita April 29, 30, May 6, 7, 2006 Mohave County Fair at Kingman May 13, 14, 20, 21, 2006 Subtotal - Fairs at Non-Commercial Tracks Live Races Simulcast Races Total Handle Simulcast Handle Attendance Returned to Public Track Commission Breakage to Track Purses 6 36 257 $2,283,175 $1,707,423 23,232 $1,771,103 $454,926 $12,526 $173,227 4 32 0 53,823 0 1,430 41,989 10,304 454 57,188 4 33 0 78,997 0 3,000 61,111 15,574 732 62,245 4 32 0 78,412 0 1,385 60,983 15,159 702 60,815 4 36 0 125,429 0 5,200 97,611 24,258 1,051 63,911 4 38 0 130,939 0 11,000 101,800 25,136 1,384 99,097 4 36 0 185,762 0 8,800 144,751 35,555 1,741 107,761 4 30 0 105,709 0 2,550 82,380 20,143 1,073 62,132 34 273 257 $3,042,246 $1,707,423 56,597 $2,361,727 $601,054 $19,663 $686,376 4 38 154 $1,683,832 $1,248,232 19,183 $1,253,249 $331,768 $8,635 $123,646 4 36 496 3,183,139 2,376,160 19,521 2,427,973 628,691 16,280 260,225 4 36 470 3,569,011 2,580,389 29,185 2,725,971 704,388 17,302 308,301 4 36 0 322,989 0 17,900 247,069 66,936 2,525 70,572 4 37 435 3,794,915 2,663,561 24,000 2,948,458 749,995 19,991 345,426 4 27 569 3,536,430 2,793,597 20,634 2,652,061 699,482 18,677 282,600 Fairs at Commercial Tracks Yavapai County Fair at Prescott Valley (Yavapai Downs) September 3, 4, 5, 6, 2005 La Paz County Fair at Phoenix (Turf Paradise) January 14, 15, 21, 22, 2006 Maricopa County Fair at Phoenix (Turf Paradise) January 7, 8, 28, 29, 2006 Pima County Fair at Tucson (Rillito Park) January 21, 22, 28, 29, 2006 Pinal County Fair at Phoenix (Turf Paradise) February 11, 12, 18, 19, 2006 Navajo County Fair at Phoenix (Turf Paradise) March 11, 12, 18, 19, 2006 Yuma County Fair at Prescott Valley (Yavapai Downs) May 27, 28, 29, 30, 2006 Subtotal - Fairs at Commercial Tracks 4 36 147 1,624,111 1,172,427 15,078 1,251,563 321,526 8,088 129,385 28 246 2,271 $17,714,427 $12,834,366 145,501 $13,506,344 $3,502,786 $91,497 $1,520,156 Total - All County Fair Racing 62 519 2,528 $20,756,673 $14,541,789 202,098 $15,868,071 $4,103,839 $111,160 $2,206,532 Commercial Greyhound Racing The Department of Racing is responsible for regulating and supervising all commercial greyhound racing meetings, conducting investigations, issuing licenses, conducting greyhound drug testing, overseeing wagering, hearing appeals of decisions, conducting hearings on investigation referrals and race incidents, collecting revenues for the State, and distributing awards to program recipients. Investigations The Department investigates possible violations of racing laws and rules and imposes administrative sanctions on those determined to have committed violations. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures Number of rulings issued Percent of original actions upheld on appeal Number of investigations conducted regarding compliance with rules FY 2004 FY 2005 FY 2006 122 100% 81 106 100% 58 184 100% 128 69% 100% 99% Percent of investigations resulting in disciplinary action Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. Licenses are denied for those who are undesirable or statutorily prohibited from participating. Performance Measures Number of licenses issued Number of licenses denied Number of investigations conducted regarding licensing Percent of background investigations resulting in disciplinary action Percent of license denials upheld on appeal FY 2004 FY 2005 FY 2006 582 2 98 12% 1,420 2 58 35% 566 2 115 63% 100% 100% 100% Inspections The Department issues licenses to greyhound farms, kennels and other operations after the facilities have been inspected and satisfied requirements. Performance Measures FY 2004 FY 2005 FY 2006 5 37 14% 36 50 6% 8 58 4% 141 127 76 Number of facility licenses issued Number of inspections conducted at facilities Percent of inspections resulting in violations and disciplinary action Number of litter inspections ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 16 Commercial Greyhound Racing Breeders’ Awards The Department encourages and promotes greyhound breeding in Arizona through the administration of and distribution to recipients of funds available through the Breeders’ Awards Programs. Performance Measures Amount of awards Percent of breeders winning awards Number of greyhounds earning awards Number of registered greyhounds FY 2004 FY 2005 FY 2006 $309,339 14% 800 8,000 $379,768 8% 689 5,321 $298,026 8% 3,352 4,571 Greyhound Adoption The Department provides grants to non-profit organizations to promote the adoption of retired racing greyhounds as domestic pets. This fund receives 100% of all fees collected from licensing greyhound racing kennels, breeding farms and other operations where greyhounds are raised for racing purposes. In FY 2006, the fund received $300. Performance Measures FY 2004 FY 2005 FY 2006 0 $0 2 $3,143 2 $1,534 Number of grants awarded Amount of grants awarded ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 17 COMMERCIAL GREYHOUND TRACKS Apache Greyhound, Phoenix Greyhound, Tucson Greyhound FY 2002 RACING STATISTICS Race Days/Performances (including 9 charity days) Live Race Days Dark Day-Simulcast only Total Race Days Total Live Performances (Matinee & Evening) FY 2003 FY 2004 FY 2005 FY 2006 735 351 1,086 710 373 1,083 719 371 1,090 634 453 1,087 667 420 1,087 739 739 719 634 667 Number of Races Live Races Simulcast Races Total Number of Races 11,040 178,577 189,617 10,949 190,889 201,838 10,492 218,222 228,714 9,372 213,839 223,211 10,457 212,233 222,690 Attendance On-Track Off-Track Total Attendance 265,590 288,959 554,549 330,645 268,404 599,049 309,405 245,444 554,849 260,175 252,995 513,170 258,294 265,181 523,475 Pari-Mutuel Handle Average Handle per Race Day $91,711 $84,125 $78,036 $75,332 $78,132 Breakdown by location On-Track Handle Off-Track Handle $35,401,074 $64,197,607 $33,378,823 $57,729,004 $30,557,129 $54,501,568 $24,420,309 $57,465,556 $24,174,364 $60,755,397 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $52,932,069 46,666,612 $99,598,681 $48,214,378 42,893,449 $91,107,827 $43,430,639 41,628,058 $85,058,697 $45,080,399 36,805,465 $81,885,864 $48,967,570 35,962,191 $84,929,761 $76,021,553 $69,554,238 $65,060,502 $62,397,624 $65,087,000 $162,651 $99,856 $84,909 $0 $0 $20,308,368 454,625 339,609 0 48,669 1,890,931 0 345,257 $23,387,459 $18,241,835 154,717 116,933 0 56,725 2,215,439 0 266,103 $21,051,752 $17,155,485 0 0 0 58,026 2,245,751 0 246,844 $19,706,106 $16,418,485 0 0 0 76,310 2,403,112 0 229,595 $19,127,502 $16,898,092 0 0 0 56,052 2,637,164 0 221,691 $19,812,998 $5,564,391 $4,752,755 $4,481,327 $4,392,179 $4,592,493 DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Capital Improvement AGP Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit AGP-Hardship Tax (Transferred to PGP) Breakage Total Track Revenues Purses Racetrack Trends at a Glance On-Track vs. Off-Track Handle On-Track Off-Track Live Simulcast $70 $60 $60 $50 $40 Million Million $50 Source of Handle $40 $30 $30 $20 $20 $10 $10 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 18 FY 2004 FY 2005 FY 2006 APACHE GREYHOUND PARK 2551 West Apache Trail Apache Junction, Arizona 85220 American Greyhound Racing, Inc. RACING STATISTICS FY 2002 Race Days/Performances Live Race Days Dark Day-Simulcast only Total Race Days FY 2006 Racing Dates: July 1, 2005-June 30, 2006 FY 2003 FY 2004 FY 2005 FY 2006 69 293 362 52 310 362 56 308 364 0 362 362 0 362 362 69 52 56 0 0 Number of Races Live Races Simulcast Races Total Number of Races 932 56,843 57,775 774 59,484 60,258 834 60,250 61,084 0 60,270 60,270 0 64,529 64,529 Attendance On-Track Off-Track Total Attendance 42,600 0 42,600 127,819 0 127,819 126,750 0 126,750 81,353 0 81,353 82,160 0 82,160 Total Live Performances (Matinee & Evening) Pari-Mutuel Handle Average Handle per Race Day $14,684 $14,846 $14,511 $9,629 $11,329 Breakdown by location On-Track Handle Off-Track Handle $5,315,494 $0 $5,374,389 $0 $5,281,988 $0 $3,485,747 $0 $4,101,136 $0 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $1,619,524 3,695,970 $5,315,494 $1,461,493 3,912,896 $5,374,389 $1,544,305 3,737,683 $5,281,988 $0 3,485,747 $3,485,747 $0 4,101,136 $4,101,136 $4,071,255 $4,092,042 $4,103,541 $2,670,590 $3,223,463 $0 $0 $0 $0 $0 $1,103,296 0 0 0 4,418 80,519 0 18,363 $1,206,597 $813,942 0 0 0 0 0 0 8,938 $822,880 $942,979 0 0 0 0 0 0 8,810 $951,789 $255,152 $160,366 $187,587 DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Capital Improvement AGP Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit AGP-Hardship Tax (Transferred to PGP) Breakage Total Track Revenues $1,126,627 32,390 73,904 (106,310) 3,532 85,542 0 27,789 $1,243,474 $1,135,328 0 27,383 (27,383) 4,710 75,362 0 17,158 $1,232,558 $169,194 $278,658 Purses Racetrack Trends at a Glance Live Simulcast On-Track vs. Off-Track Handle $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $ Source of Handle $5 $4 $4 Million Million On-Track Off-Track $3 $3 $2 $2 $1 $1 $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 19 FY 2004 FY 2005 FY 2006 PHOENIX GREYHOUND PARK 3801 East Washington Street Phoenix, Arizona 85036 American Greyhound Racing, Inc. RACING STATISTICS FY 2002 FY 2006 Racing Dates: July 1, 2005-June 30, 2006 FY 2003 FY 2004 FY 2005 FY 2006 Race Days/Performances (including 9 charity day) Live Race Days Dark Day-Simulcast only Total Race Days 354 8 362 349 10 359 352 11 363 352 10 362 362 0 362 Total Live Performances (Matinee & Evening) 358 378 352 352 362 5,174 46,694 51,868 5,486 57,608 63,094 5,169 74,579 79,748 5,387 67,266 72,653 5,770 63,841 69,611 157,522 197,407 354,929 148,984 183,820 332,804 133,309 165,126 298,435 127,079 165,341 292,420 123,617 171,657 295,274 $190,044 $172,202 $160,503 $159,323 $166,511 Breakdown by location On-Track Handle Off-Track Handle $18,742,278 $50,053,671 $18,182,026 $43,638,503 $16,906,712 $41,355,918 $15,080,705 $42,594,136 $15,043,286 $45,233,757 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $42,224,319 26,571,630 $68,795,949 $38,568,181 23,252,348 $61,820,529 $35,263,900 22,998,730 $58,262,630 $37,464,322 20,210,518 $57,674,840 $40,908,294 19,368,749 $60,277,043 $52,487,648 $46,744,353 $44,174,254 $43,953,881 $45,922,489 $162,651 $99,856 $84,909 $0 $0 $13,737,588 422,235 265,705 106,310 45,137 1,305,647 0 246,051 $16,128,673 $11,967,747 154,717 89,550 27,383 52,015 1,689,918 0 187,772 $14,169,102 $11,362,412 0 0 0 53,609 1,800,998 0 175,420 $13,392,439 $11,130,623 0 0 0 76,310 1,984,228 0 170,544 $13,361,706 $11,577,368 0 0 0 56,052 2,193,905 0 163,624 $13,990,948 $3,570,784 $3,317,197 $3,188,597 $3,189,057 $3,352,976 Number of Races Live Races Simulcast Races Total Number of Races Attendance On-Track Off-Track Total Attendance Pari-Mutuel Handle Average Handle per Race Day DISTRIBUTION OF REVENUES Returned to Wagering Public State Pari-Mutuel Revenues Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Capital Improvement AGP Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit AGP-Hardship Tax (Transferred to PGP) Breakage Total Track Revenues Purses Racetrack Trends at a Glance On-Track Live Simulcast On-Track vs. Off-Track Handle Off-Track Source of Handle $45 $60 $40 $50 $35 $30 Million Million $40 $25 $30 $20 $15 $20 $10 $10 $5 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 20 FY 2004 FY 2005 FY 2006 TUCSON GREYHOUND PARK 2601 South Third Avenue Tucson, Arizona 85713 Tucson Greyhound Park, Inc. RACING STATISTICS FY 2002 Race Days/Performances Live Race Days Dark Day-Simulcast only Total Race Days FY 2003 FY 2006 Racing Dates: July 1, 2005-June 30, 2006 FY 2004 FY 2005 FY 2006 312 50 362 309 53 362 311 52 363 282 81 363 305 58 363 312 309 311 282 305 4,934 75,040 79,974 4,689 73,797 78,486 4,489 83,393 87,882 3,985 86,303 90,288 4,687 83,863 88,550 Attendance On-Track Off-Track Total Attendance 65,468 91,552 157,020 53,842 84,584 138,426 49,346 80,318 129,664 51,743 87,654 139,397 52,517 93,524 146,041 Pari-Mutuel Handle Average Handle per Race Day $70,407 $66,058 $59,267 $57,094 $56,616 Breakdown by location On-Track Handle Off-Track Handle $11,343,302 $14,143,936 $9,822,408 $14,090,501 $8,368,429 $13,145,650 $5,853,857 $14,871,420 $5,029,942 $15,521,640 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $9,088,226 16,399,012 $25,487,238 $8,184,704 15,728,205 $23,912,909 $6,622,434 14,891,645 $21,514,079 $7,616,077 13,109,200 $20,725,277 $8,059,276 12,492,307 $20,551,582 $19,462,650 $18,717,843 $16,782,707 $15,773,153 $15,941,049 $0 $0 $0 $0 $0 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement Non-Taxable Charity Days-Revenues Withheld Hardship Tax Credit Breakage Total Track Revenues $5,444,153 0 0 0 499,742 71,417 $6,015,312 $5,138,760 0 0 0 450,159 61,173 $5,650,092 $4,689,776 0 0 0 364,234 53,061 $5,107,071 $4,473,920 0 0 0 418,883 50,114 $4,942,917 $4,377,744 0 0 0 443,259 49,257 $4,870,261 Purses $1,824,413 $1,156,900 $1,037,578 $1,042,756 $1,051,930 Total Live Performances (Matinee & Evening) Number of Races Live Races Simulcast Races Total Number of Races Returned to Wagering Public State Pari-Mutuel Revenues Racetrack Trends at a Glance Live On-Track vs. Off-Track Handle $18 $18 $16 $16 $14 $14 $12 $12 $10 $8 Source of Handle Simulcast Million Million On-Track Off-Track $10 $8 $6 $6 $4 $4 $2 $2 $ $ FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 21 FY 2003 FY 2004 FY 2005 FY 2006 Teletracking The Department of Racing has the authority to approve applications for teletracking (off-track betting) permits, license teletracking sites and their personnel, and monitor compliance for both operational and technical requirements. Coconino County Racing (Fort Tuthill Downs), Turf Paradise, Yavapai County Fair Association (Yavapai Downs), Phoenix Greyhound Park, and Tucson Greyhound Park each held teletracking permits approved by the Arizona Racing Commission to operate off-track wagering sites in FY 2006. A total of 83 off-track-betting sites were authorized to support both greyhound and horse racing in Arizona. The total handle generated by commercial and county fair racing for teletracking was $194.8 million. This included $133.9 million for horse racing and $60.9 million for greyhound racing. The State of Arizona received $264,036 in revenue from the teletracking handle, all of which was generated from the Turf Paradise handle at off-track sites. The handle at teletracking facilities was up 12.6% during FY 2006 from the prior year. The Table below summarizes the teletrack handle generated by commercial and county fair meets. Teletrack Handle FY 2005 FY 2006 $74,473,836 $89,970,048 Phoenix Greyhound Park 42,593,968 45,152,079 Yavapai Downs 28,264,640 31,147,803 Tucson Greyhound Park 14,823,435 15,734,151 Turf Paradise (Fair Meets) 7,864,349 7,789,048 Yavapai Downs (Fair Meets) 2,708,144 2,942,721 Fort Tuthill Downs (Fair Meet) 2,329,318 2,074,058 0 0 $173,057,690 $194,809,908 Track Turf Paradise Rillito Park* TOTAL * No teletracking since FY 2000. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 22 TELETRACKING ACTIVITY - COMMERCIAL HORSE MEETS YAVAPAI DOWNS City AHWATUKEE APACHE JUNCTION APACHE JUNCTION BUCKEYE CASA GRANDE CAVE CREEK CHANDLER CHANDLER COTTONWOOD FLAGSTAFF FORT MOHAVE GLENDALE GOODYEAR KINGMAN LAKE HAVASU CITY MARANA NEW RIVER PARKER PARKER PAYSON PEORIA PEORIA PEORIA PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PRESCOTT PRESCOTT VALLEY PRESCOTT VALLEY QUARTZSITE ROCK SPRINGS SAFFORD SCOTTSDALE SHOW LOW SIERRA VISTA SURPRISE SURPRISE TEMPE TEMPE TEMPE TEMPE TEMPE TEMPE TONOPAH TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON WICKENBERG WINSLOW YUMA Site PAYTON'S PLACE APACHE GREYHOUND PARK ARIZONA JOE'S WADDEL'S LONGHORN MCMASHER'S SPORTS BAR HAROLD'S DIRTY DRUMMER STADIUM CLUB ZOOMER'S MUSEUM CLUB THUNDER LANES MAX'S SPORTS BAR ROMAN'S OASIS CERBAT HILLS GALLAGHER'S AGAIN OLD FATHER INN GAVILAN PEAK JULIO'S STROKES FAMOUS SAM'S GALLAGHER'S GRAND INN MCDUFFY'S SPORTS GRILL 1800'S SALOON AMERICAN LEGION #7 AMF CHRISTOWN LANES ARMADILLO GRILL BIG DADDY'S BRENNAN'S CROSSROADS DRAW 10 FINAL SCORE SPORTS GRILL GALLAGHER'S HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR RESTAURANT PADRE MURPHY'S ROMAN'S COUNTY LINE TURF PARADISE MATT'S SALOON ANTELOPE LANES YAVAPAI DOWNS QUARTZSITE YACHT CLUB ROCK SPRINGS CAFE CHALO'S LA CASA REYNOSO CASINO ARIZONA RT'S BLACK BULL P.C.'S LOUNGE COYOTE ALLEY RUNNER'S SPORTS BAR BOSTON'S GRILLE DERBY GRILL HORSE & HOUND-BROADWAY MCDUFFY'S SPORTS BAR SKIP & JAN'S STRAY CAT TIN TOP RESTAURANT AIRPORT INN ARIZONA ALE HOUSE FAMOUS SAM'S-CENTRAL FAMOUS SAM'S-EAST FAMOUS SAM'S-SOUTH GOLDEN PIN LANES JEFF'S PUB RILLITO PARK TOUCHDOWN'S TUCSON GREYHOUND PARK MECCA RESTAURANT PT'S COCKTAILS FAMOUS SAM'S Sub-Total County Fairs ST. JOHNS SONOITA Sub-Total TOTAL APACHE COUNTY FAIR SANTA CRUZ COUNTY FAIR Handle Revenue TURF PARADISE Performances Handle Revenue Performances $527,627 785,348 264,038 7,786 304,759 103,515 1,688,864 1,272,392 218,677 366,761 51,943 1,165,672 194,246 374,691 415,818 181,387 226,493 32,806 75,814 159,535 85,821 722,750 811,903 51,605 753,292 173,785 910,799 91,911 1,798,711 344,530 135,755 147,184 980,151 596,860 319,790 779,113 1,750,410 722,607 505,754 322,850 287,200 29,643 125,363 238,129 969,731 324,671 437,738 78,760 493,305 68,586 553,378 963,719 700,814 1,005,368 136,442 28,938 107,628 150,187 204,641 188,319 138,427 724,052 420,785 421,444 929,534 135,644 46,725 814,879 - 89 89 89 10 89 30 89 89 83 89 58 89 89 89 89 30 75 22 59 89 30 89 89 30 89 30 89 62 89 89 89 47 89 89 89 89 89 89 45 89 89 22 83 89 89 89 89 30 89 30 89 89 83 89 30 59 87 75 89 89 89 89 89 89 89 75 58 86 1,477,887 2,676,755 945,196 960,676 1,123,042 4,405,409 3,154,790 698,877 752,464 4,528 3,560,601 565,638 1,142,403 1,098,773 678,983 801,813 190,538 12,032 424,642 103,903 2,227,393 2,244,004 74,398 1,918,754 896,136 2,950,270 456,992 6,785,259 1,060,285 501,552 835,669 2,744,796 1,565,186 801,751 2,233,739 5,415,032 1,802,985 906,536 817,558 605,812 338,335 374,879 584,428 407,724 1,097,257 519,233 1,652,252 111,569 1,500,501 3,035,125 2,189,178 3,363,139 497,916 7,581 270,240 549,969 650,683 483,263 444,223 2,077,183 1,217,603 71,301 1,214,862 2,518,548 389,509 16,319 2,737,867 4,338 7,858 2,775 2,820 3,297 12,932 9,261 2,052 2,209 13 10,452 1,660 3,354 3,226 1,993 2,354 559 35 1,247 305 6,539 6,587 218 5,633 2,631 8,661 1,342 19,919 3,113 1,472 2,453 8,058 4,595 2,354 6,557 15,896 5,293 2,661 2,400 1,778 993 1,100 1,716 1,197 3,221 1,524 4,850 328 4,405 8,910 6,426 9,873 1,462 22 793 1,614 1,910 1,419 1,304 6,098 3,574 209 3,566 7,393 1,143 48 8,037 245 243 245 242 236 244 244 241 245 12 243 243 244 244 195 242 139 14 239 49 245 244 37 242 200 244 242 243 245 242 244 244 242 244 245 245 244 243 244 233 174 211 241 237 244 145 245 43 244 244 244 244 95 12 243 201 244 243 243 244 244 5 243 244 197 23 244 $31,147,803 - 5,067 $89,943,744 $264,036 13,902 - - - 14,030 12,274 - 4 4 - - - 26,304 - 8 $31,147,803 - 5,067 $89,970,048 $264,036 13,910 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 23 TELETRACKING ACTIVITY - COUNTY FAIR MEETS FORT TUTHILL DOWNS YAVAPAI DOWNS (Coconino) (Yavapai & Yuma) TURF PARADISE (La Paz, Maricopa, Navajo, & Pinal ) City AHWATUKEE APACHE JUNCTION APACHE JUNCTION BUCKEYE CASA GRANDE CAVE CREEK CHANDLER CHANDLER COTTONWOOD FLAGSTAFF FORT MOHAVE GLENDALE GOODYEAR KINGMAN LAKE HAVASU CITY MARANA NEW RIVER PARKER PARKER PAYSON PEORIA PEORIA PEORIA PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PRESCOTT PRESCOTT VALLEY PRESCOTT VALLEY QUARTZSITE ROCK SPRINGS SAFFORD SCOTTSDALE SHOW LOW SIERRA VISTA SURPRISE SURPRISE TEMPE TEMPE TEMPE TEMPE TEMPE TEMPE TONOPAH TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON WICKENBERG WINSLOW YUMA TOTAL Site Handle PAYTON'S PLACE APACHE GREYHOUND PARK ARIZONA JOE'S WADDEL'S CORRAL MCMASHER'S SPORTS BAR HAROLD'S RESTAURANT DIRTY DRUMMER STADIUM CLUB ZOOMER'S SPORTS BAR MUSEUM CLUB THUNDER LANES MAX'S SPORTS BAR ROMAN'S OASIS CERBAT HILLS GALLAGHER'S AGAIN OLD FATHER INN GAVILAN PEAK JULIO'S STROKES FAMOUS SAM'S GALLAGHER'S GRAND INN MCDUFFY'S SPORTS BAR 1800'S SALOON AMERICAN LEGION #7 AMF CHRISTOWN LANES ARMADILLO GRILL BIG DADDY'S BRENNAN'S CROSSROADS DRAW 10 FINAL SCORE SPORTS GALLAGHER'S HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR RESTAURANT PADRE MURPHY'S ROMAN'S COUNTY LINE TURF PARADISE MATT'S SALOON ANTELOPE LANES YAVAPAI DOWNS QUARTZSITE YACHT CLUB ROCK SPRINGS CAFE CHALO'S LA CASA REYNOSO CASINO ARIZONA RT'S BLACK BULL P.C.'S LOUNGE COYOTE ALLEY RUNNER'S SPORTS BAR BOSTON'S DERBY GRILL HORSE & HOUND-BROADWAY MCDUFFY'S SPORTS BAR SKIP & JAN'S STRAY CAT TIN TOP RESTAURANT AIRPORT INN ARIZONA ALE HOUSE FAMOUS SAM'S-EAST FAMOUS SAM'S-CENTRAL FAMOUS SAM'S-SOUTH GOLDEN PIN LANES JEFF'S PUB RILLITO PARK TOUCHDOWNS TUCSON GREYHOUND PARK MECCA RESTAURANT PT'S COCKTAILS FAMOUS SAM'S Performances $47,985 49,772 17,607 1,525 25,697 5,794 113,732 84,549 11,257 18,618 2,812 74,346 11,685 17,013 39,446 8,011 5,937 576 7,783 14,135 4,070 56,426 47,179 7,295 58,468 7,777 56,028 2,541 76,659 27,579 6,140 4,459 75,945 32,341 19,114 58,128 141,038 48,292 31,602 24,071 22,844 3,039 751 7,695 20,032 67,832 21,152 41,742 6,241 32,761 2,130 32,411 72,151 29,705 42,848 4,359 1,630 10,357 5,060 13,521 17,135 17,457 52,883 37,259 24,310 70,470 10,222 4,384 59,045 $2,074,858 6 6 6 1 6 1 6 6 4 6 5 6 6 6 6 1 1 1 5 6 1 6 6 1 6 1 5 1 5 6 4 1 6 4 6 6 6 6 4 6 6 1 1 6 5 6 6 6 1 6 1 6 6 5 6 1 5 6 1 6 6 6 6 6 6 6 6 5 6 318 Handle Performances $58,838 70,979 23,812 33,846 15,899 150,575 128,211 14,964 26,701 1,967 124,526 23,533 22,677 26,058 35,528 22,661 3,861 4,811 12,898 5,500 64,873 76,985 7,103 62,566 25,080 90,012 11,229 230,429 35,091 13,117 19,431 71,014 41,437 13,203 60,660 164,463 53,414 96,110 35,313 22,835 5,867 10,998 21,582 98,555 33,732 32,085 11,237 41,405 10,209 39,454 85,428 63,838 86,762 17,648 4,400 11,178 19,450 16,755 18,451 12,423 53,951 37,695 33,753 95,496 9,686 2,883 65,590 $2,942,721 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 24 8 8 8 8 4 8 8 6 8 4 8 8 8 8 4 8 2 4 8 4 8 8 4 8 4 8 8 8 7 6 8 8 7 8 8 8 8 8 8 8 3 6 8 8 8 8 4 8 4 8 8 8 8 4 4 8 8 8 8 8 8 8 8 8 6 4 8 467 Handle Performances $222,303 286,410 91,937 83,563 111,324 322,662 318,556 47,356 63,628 322,460 46,290 75,856 113,502 74,283 67,774 28,931 27,423 186,467 173,595 171,114 86,098 295,687 42,685 600,987 77,402 27,871 99,552 231,125 117,735 57,573 185,252 389,812 135,843 78,436 71,355 69,800 47,073 27,655 41,399 23,356 103,475 66,996 108,873 138,390 217,585 137,074 212,123 34,925 22,964 135,185 22,392 46,741 49,256 113,162 132,396 87,119 108,292 214,025 28,914 267,391 $7,789,408 16 16 16 16 15 16 16 15 15 16 16 16 16 16 16 16 14 16 16 16 16 16 16 16 16 15 16 16 16 16 16 16 16 16 16 16 16 16 16 14 16 16 16 16 16 16 16 6 16 16 16 16 16 16 16 8 16 16 16 16 934 TELETRACKING ACTIVITY - GREYHOUND MEETS PHOENIX GREYHOUND PARK City APACHE JUNCTION CASA GRANDE CAVE CREEK CHANDLER CHANDLER CHANDLER FLAGSTAFF GLENDALE KINGMAN LITCHFIELD PARK MARANA PEORIA PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PRESCOTT PRESCOTT VALLEY SCOTTSDALE SIERRA VISTA SIERRA VISTA SURPRISE TEMPE TEMPE TEMPE TEMPE TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON WICKENBERG YUMA TOTAL Site Handle TUCSON GREYHOUND PARK Revenue Performances Handle Revenue Performances APACHE GREYHOUND PARK $ MCMASHER'S SPORTS BAR CREEKERS GALLAGHER'S DIRTY DRUMMER STADIUM CLUB JOE'S PLACE MAX'S SPORTS BAR DAMBAR & STEAKHOUSE LIGHTHOUSE RESTAURANT OLD FATHER INN GALLAGHER'S BIG DADDY'S BRENNAN'S GALLAGHER'S HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR PADRE MURPHY'S PHOENIX GREYHOUND PARK PURPLE TURTLE PLAZA BOWL ANTELOPE LANES CASINO ARIZONA COCHISE HEALTH & RACQUET PC'S LOUNGE RUNNER'S SPORTS BAR BOSTON'S BAR & GRILLE HORSE & HOUND-OFF BROADWAY MCDUFFY'S SPORTS BAR SKIP & JAN'S AIRPORT INN ARIZONA ALE HOUSE FAMOUS SAM'S - CENTRAL FAMOUS SAM'S - EAST FAMOUS SAM'S - SOUTH GOLDEN PIN LANES JEFF'S PUB TOUCHDOWNS TUCSON GREYHOUND PARK MECCA RESTAURANT YUMA GREYHOUND PARK 1,447,321 522,038 312,621 513,545 2,481,408 2,050,864 104,603 5,410,503 334,610 2,052,115 129,744 1,939,687 1,061,869 1,992,322 2,256,699 1,834,177 1,436,222 1,047,294 4,957,774 471,763 266,045 115,678 3,291,119 158,649 477,358 737,788 588,570 1,251,467 772,463 872,107 93,688 199,882 182,840 217,331 154,414 688,172 461,957 661,761 803,282 18,571 781,758 - 362 309 193 361 362 362 104 362 202 359 245 362 362 356 362 318 362 361 362 362 304 192 362 81 216 362 362 362 354 362 360 299 362 362 359 362 362 362 362 37 257 270,667 211,526 699,436 233,199 459,134 224,902 348,026 345,626 264,706 466,918 959,384 687,052 475,562 1,119,077 1,390,890 710,527 2,791,230 1,980,701 2,095,588 - - 304 302 304 299 246 304 301 304 302 304 304 362 302 363 363 362 363 363 362 - $ 45,152,079 - 12,869 $ 15,734,151 - 6,114 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 25 Racing Regulation The Department of Racing’s regulatory responsibilities ensure that all participants and permittees involved in commercial horse racing, greyhound racing, and county fair horse racing operate and perform in compliance with applicable Arizona statutes, rules and regulations. This is accomplished through the investigation and licensing activities of the Department. Licensing The Department processes and investigates all license applications in a timely manner while ensuring only those eligible receive licenses. Performance Measures FY 2004 FY 2005 FY 2006 4,164 9 6,112 7 3,120 11 Number of licenses issued Number of licenses denied Civil Penalties/Fines The Boards of Stewards have the authority to impose penalties and fines up to a maximum of a 60-day suspension and/or $1,000. The Director has the authority to affirm, reverse or modify the Stewards’ Rulings, including license revocation. Performance Measures FY 2004 FY 2005 FY 2006 Number of disciplinary actions Percent total licensees with disciplinary action Amount of fines imposed Amount of fines collected 743 11% $60,255 $42,930 557 9% $54,661 $41,921 636 20% $54,018 $47,438 FY 2004 FY 2005 FY 2006 372 167 26 56 11 45 66 266 114 30 41 0 29 77 320 74 17 41 0 84 100 743 557 636 Stewards Rulings by Track Track Turf Paradise Yavapai Downs Rillito Park All County Fairs Apache Greyhound Park Phoenix Greyhound Park Tucson Greyhound Park Total ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 26 Racing Regulation Director’s Rulings The Director may conduct hearings of appeals or Stewards’ referrals or may assign a case that has been appealed or referred to the Arizona Office of Administrative Hearings. The Administrative Law Judge provides the Director findings of fact, conclusions of law and a proposed order. The Director may accept or modify any decision proposed by the Judge. The table below summarizes hearings and cases by the Director, the Office of Administrative Hearings, and the Racing Commission. Summary of Hearings and Orders FY 2004 FY 2005 FY 2006 Director’s Hearings Referrals Appeals Sua Sponte Director Review Case Backlog Hearings Administrative Law Judge Hearings Racing Commission Hearings Cases Withdrawn/Dismissed Total Number of Hearings Total Number of Director’s Orders* 191 168 15 17 217 56 10 35 4 4 8 199 244 1 2 2 220 293 916 156 39 130 591 10 7 2 933 1,093 * (Includes orders for action taken not requiring a hearing, i.e. stays, reinstatements, cases dismissed, etc.) Investigations The Department investigates all possible violations of racing laws and rules. investigations are conducted in connection with license applications. Performance Measures In addition, FY 2004 FY 2005 FY 2006 380 51% 478 23% 293 65% 335 59% 933 85% 687 85% Number of Investigations Regarding Violations Percentage of Investigations Resulting in Disciplinary Action Number of Investigations Regarding Licensing Percentage of Investigations Resulting in Disciplinary Action Types of Investigations Offenses Total Denied Referred Pending Warning No Violation Criminal Records Received Inspection-Kennels Interviews False Application Human Drug Testing Animal Drug Testing Horse Rule Violation Miscellaneous Undesirables Greyhound Rule Violation Possession of Contraband Criminal Violation Illegal Gambling Total 552 58 138 441 50 47 195 11 10 128 4 38 0 1672 0 0 7 0 0 0 0 0 2 0 0 0 0 9 441 2 0 441 40 47 190 11 8 120 4 38 0 1342 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 111 56 131 0 10 0 5 0 0 8 0 0 0 321 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 27 Racing Regulation Drug/Alcohol Abuse Investigations The Department of Racing is authorized to require persons licensed to submit to testing when there is reason to believe they may be under the influence of or unlawfully in possession of any prohibited substance regulated by Title 13, Chapter 34, or has consumed alcohol in violation of A.A.C. R19-2-112(8) or (10) or R19-2-311(9). Testing Summary FY 2004 FY 2005 FY 2006 41 9 11 21% 1 1 100% 41 11 4 27% 0 0 0% 50 13 7 26% 8 8 100% Human Drug Tests Positive Drug Tests Licensee Refused to Test Percent Positive Breath/Alcohol Tests Positive Breath/Alcohol Tests Percent Positive Equine & Canine Drug Testing The Department contracts with independent laboratories for the analysis of equine urine and blood samples and canine urine samples. This analysis is required to enforce the rules of racing that prohibit animals from racing while under the influence of foreign substances. Testing Summary Equine Drug Testing Number positive equine drug tests Percent positive equine drug tests Canine Drug Testing Number positive canine tests Percent positive canine tests Totals Total Positive tests Percent Total positive tests FY 2004 FY 2005 FY 2006 44 1.4% 37 1.3% 48 1.8% 1 .02% 5 .10% 0 .00% 45 0.55% 42 0.53% 48 0.63% ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 28 Investigation File Backlog In mid-2005, the Department found several investigation files that were not properly processed from the prior licensing cycle. Since that time the Department has reviewed each file, obtained FBI fingerprint reports, contacted the licensee to request an explanation, and prepared the cases for hearing. The following is a status of the cases: File Status Number of Cases Cleared by FBI Report 155 No longer licensees 120 License Revoked after Hearing 112 Resolved with submission of legal documentation 75 License Suspended/Suspension Stayed/Probation Imposed 48 Case Dismissed after Hearing 21 Total 531 Hearings were conducted on October 19, 2005 and January 26, 2006 exclusively for these matters. Several matters were continued to allow the Special Investigators to gather additional information and were interspersed with scheduled hearings as the additional information was received. The criminal histories included drug offenses, assaults, theft/burglary, and other serious offenses. All of the respondents were properly noticed of their situation and requested to provide information to the Department. In addition, the list of licensees was sent to industry organizations and permittees so they could contact any of the individuals who were their employees or members to encourage them to comply with the Department’s Notice of Hearing. The project required about 3,186 hours at a personnel value of over $70,000 to the Department. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 29 Fingerprint Backlog In May 2006, the Department identified 58 licensees who failed to submit fingerprints in order to complete the required background investigation. Most of these licensees submitted fingerprints that were reported to be “unclassifiable,” which means the prints were unclear and could not be read by the F.B.I. In addition, some of these individuals claimed an invalid “reciprocity.” The Department participates in fingerprint reciprocity with racing jurisdictions that process through the F.B.I. Reciprocity is acceptable for owners only, and the prints must have been taken in the past three years. The Department had been unable to complete the required background investigation for these individuals. A letter was sent to all of these licensees to inform them of their responsibility to submit fingerprint cards that would allow the Department to complete the license application background investigation. They were provided 20 days to do so. Licensees who failed to respond were scheduled for hearing regarding the fingerprint submission and non-compliance which constitutes grounds for imposition of a civil penalty, and suspension or revocation of a racing license. The following chart shows the results of this effort to rectify the situation: Licensee Response Department Action Licensees Failed to Appear at Hearing License Suspended 39 Submitted New Fingerprints Conducting New Review 13 Relinquished License File Closed 6 Total 58 The Department has also incorporated new steps in the licensing process that provide for referral for fingerprint non-compliance and possible disciplinary action that may include fine, suspension, or license revocation. The problem occurred as a result of the prior practice to require one fingerprint card per applicant. The Department introduced a new procedure which requires two per applicant, and this should eliminate the problem. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 30 LICENSE BY CATEGORY ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 31 CATEGORY 1 YR CONCESSION 1 YR MUTUEL 1 YR PEACE OFFICER 3 YR COOLOUT 3 YR MUTUEL 3 YR PEACE OFFICER APPRENTICE JOCKEY ASSISTANT STARTER ASSISTANT TRAINER AUTH. AGENT-FULL AUTH. AGENT-PARTIAL BREED FARM/OTHER OP COMBINATION OPER DUPLICATE/NO FEE EXERCISE RIDER FACILITY MGR/AGENT GROOM INELIGIBLE JOCKEY JOCKEY AGENT KENNEL-NEW KENNEL-RENEWAL OCCUPATIONAL OCCUPATIONAL-BRDR OFFICIAL OTB OUTRIDER OWNER OWNER-TRAINER PADDOCK EMPLOYEE PERMITTEE DIR/BD MBR PLATER PONY RIDER RACING KENNEL SECURITY STABLE-NEW STABLE-RENEWAL TEMP. CLAIM TEMP. OWNER TEMP. STABLE TRAINER VENDOR-BUSINESS VENDOR-EMPLOYEE VETERINARIAN VOIDS LICENSES ISSUED FINGERPRINTS TAKEN LICENSING FEES FINGERPRINT FEES TOTAL FEES TURF PARADISE 0 0 0 0 51 0 11 5 9 1 103 0 0 0 70 0 186 7 24 4 0 0 247 0 8 34 108 593 39 0 0 4 32 0 23 50 14 22 13 5 58 12 27 1 0 1,761 911 35,418 26,414 $61,832 YAVAPAI DOWNS 0 0 0 0 27 0 2 5 1 1 4 0 0 0 8 0 26 1 10 3 0 0 67 0 7 8 2 82 5 0 1 1 9 0 11 3 0 2 0 0 8 1 3 0 0 298 186 4,873 5,394 $10,267 HORSE COUNTY FAIR 0 0 3 0 48 0 1 1 1 1 0 0 0 0 3 0 38 0 7 1 0 0 61 0 2 4 0 83 7 0 3 2 10 0 16 0 0 0 0 0 9 10 13 1 0 325 186 4,295 5,463 $9,758 GREYHOUNDS RILLITO PARK 0 0 0 0 8 1 0 0 0 0 1 0 0 0 1 0 17 1 5 1 0 0 49 0 2 0 1 53 8 0 0 2 8 0 6 0 0 0 0 0 8 2 5 0 0 179 110 2,906 3,190 $6,096 TOTAL 0 0 3 0 134 1 14 11 11 3 108 0 0 0 82 0 267 9 46 9 0 0 424 0 19 46 111 811 59 0 4 9 59 0 56 53 14 24 13 5 83 25 48 2 0 2,563 1,393 47,492 40,461 $87,953 PHOENIX 0 0 0 13 58 0 0 0 8 0 5 0 0 0 0 0 0 2 0 0 4 1 69 0 5 18 0 65 0 34 0 0 0 0 7 0 0 0 0 0 8 0 3 0 0 300 215 5,898 6,293 $12,191 APACHE 0 0 0 23 39 0 0 0 5 0 4 0 0 0 0 0 0 0 0 0 4 0 44 0 7 18 0 37 0 59 0 0 0 0 8 0 0 0 0 0 12 0 0 0 0 260 150 4,810 4,350 $9,160 TUCSON RBO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 0 0 0 0 0 0 0 0 0 0 0 8 0 550 0 $550 TOTAL 0 0 0 36 97 0 0 0 13 0 9 2 0 0 0 0 0 2 0 0 8 1 113 0 12 36 0 102 0 93 0 0 0 6 15 0 0 0 0 0 20 0 3 0 0 568 365 11,258 10,643 $21,901 GRAND TOTAL 0 0 3 36 231 1 14 11 24 3 117 2 0 0 82 0 267 11 46 9 8 1 537 0 31 82 111 913 59 93 4 9 59 6 71 53 14 24 13 5 103 25 51 2 0 3,131 1,758 58,750 51,104 $109,854 Boxing Regulation The Boxing Commission regulates and supervises all boxing events conducted in Arizona to protect the participants in these events and to ensure compliance with the Boxing laws and regulations. The events include traditional boxing, kickboxing, tough man contests, and mixed martial arts. In 1992, the Arizona Department of Racing assumed responsibility for the financial administration of the Arizona State Boxing Commission. In this capacity, the Department collects and deposits State receipts associated with boxing. The Department collects a fee of four percent of the gross receipts after deduction of any federal, state, and local taxes generated from boxing matches. In FY 2006, the Department collected $39,948 in taxes generated from 35 boxing events in the State. The State Boxing Commission issued 792 licenses, and the Department collected a total of $10,980 in license fees from these applicants. Additionally, the State Boxing Commission entered into intergovernmental agreements with Tribal organizations to supervise Boxing events conducted on Tribal land. The Arizona State Boxing Commission receives an average of $3,000 per event subject to these agreements. During FY 2006, the Boxing Commission regulated eight of these events and collected $24,000 for their regulation. All Boxing Commission revenues are deposited into the General Fund. Sanctioned Events The Boxing Commission ensures that all events under Commission jurisdiction held in the State are sanctioned by the Arizona State Boxing Commission and that all participants are duly licensed. Performance Measures FY 2004 FY 2005 FY 2006 100% 40 200 100% 40 200 100% 35 280 Percent of bouts without serious injury to contestants Number of events sanctioned Number of bouts Licensing The Boxing Commission issues licenses to participate in Boxing to those who are qualified and eligible. Licenses are denied for those who are undesirable or statutorily prohibited from participating. FY 2004 FY 2005 FY 2006 784 99% 651 98% 792 99% Revenue Summary Taxes License Fees Fines Other (Tribal Agreements) $21,929 12,855 0 9,000 $62,822 10,080 1,700 21,000 $39,948 10,980 1,400 24,000 Total Revenue Collected $43,784 $95,602 $76,328 Performance Measures Number of licenses issued Percent of licenses issued for all applications ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 32 Boxing Regulation Investigations The Boxing Commission investigates all allegations of statutory and rule violations that may harm the athlete or the public. Performance Measures FY 2004 FY 2005 FY 2006 0 N/A 6 33% 13 98% Number of investigations conducted Percent of investigations resulting in disciplinary action ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 33 Financial Issues ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT Department Of Racing Budget The Department of Racing’s expenditures for the last three fiscal years, the appropriated funds for FY 2006 and FY 2007, including a summary of full-time and seasonal positions are included below. Additional funds are necessary to enable the Department to provide the services required to regulate and support the racing industry in Arizona. Several administrative changes and modernization of the Department’s rules, policies, and procedures have been implemented or are being developed to allow the Department to provide better services to its customers, but appropriate regulation to maintain the integrity of the racing industry requires additional resources. The total Department of Racing budget for FY 2006 was $2,951,800. This was a reduction of $1,600, or 0.06%, from the prior budget period, including general salary adjustments. It was necessary to reduce the County Fair Racing fund and the Administration fund appropriations to the respective revenue caps to reflect the correct amount of funds available. Nearly 88.3% of the Department’s FY 2006 budget was appropriated from the State General Fund. OPERATING BUDGET Full Time Equivalent Positions (FTE) Actual Exp Actual Exp Actual Exp Actual Exp Appropriation FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 46.5 46.5 46.5 46.5 Full Time 33.0 33.0 33.0 33.0 33.0 Seasonal 13.5 13.5 13.5 13.5 13.5 Personal Services 46.5 $1,611,000 $1,494,585 $1,686,092 $1,768,713 $1,899,800 Employee Related Expenses (ERE) 394,500 357,095 418,555 471,583 599,900 Professional & Outside Services 323,500 278,767 330,557 239,900 201,700 Travel - In State 150,700 153,743 165,147 156,863 115,500 Travel - Out of State Other Operating Equipment AGENCY TOTAL 3,200 4,983 3,851 5,424 4,100 214,300 246,668 246,096 292,896 274,700 2,700 109,043 92,602 16,421 $2,699,900 $2,644,884 $2,942,900 $2,951,800 $3,095,700 $2,294,645 $2,504,796 $2,606,800 $2,750,700 295,300 300,683 360,969 300,000 300,000 38,200 52,556 77,135 45,000 45,000 333,500 $2,699,900 353,239 $2,644,884 438,104 $2,942,900 345,000 $2,951,800 345,000 $3,095,700 - FUND SOURCES General Fund $2,366,400 Other Appropriated Funds County Fair Racing Fund Administration of Betterment & Breeders' Awards Fund SUBTOTAL AGENCY TOTAL ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 34 Department Budget 3,095,700 3,100,000 2,951,800 2,942,900 3,000,000 2,900,000 2,800,000 2,699,900 2,644,884 2,700,000 2,600,000 2,500,000 2,400,000 FY 2003 FY 2004 FY 2005 FY2006 FY 2007 Department Of Racing Revenues The Department of Racing collects pari-mutuel taxes, license fees and fines that are deposited into eight separate funds, the State General Fund and the Greyhound and Retired Race Horse Adoption Fund. Pari-mutuel taxes and license fees collected are deposited into eight separate funds as described below. Fines are deposited directly into the State General Fund, license fees collected from dog breeders and racing kennels are deposited into the Greyhound Adoption fund and revenues collected from the 5% Retired Race Horse surcharge added to each horse racing-related fine are deposited into the Retired Race Horse Adoption fund. See tables and charts on page 37. Distribution of Revenues to the Eight Separate Funds and Maximum Dollars Allowed Fund Distribution County Fairs Livestock & Agriculture Promotion County Fairs Racing Betterment Breeders' Award Exposition and State Fair County Fair Racing Stallion Award Administration of Betterment & Breeders Awards Agricultural Consulting and Training 33% 22% 22% 11% 9% 1% 1% 1% Total Maximum Funding Allowed 100% ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 35 Annual Maximum $1,200,000 800,000 800,000 400,000 300,000 40,000 45,000 N/A $3,585,000 Revenues from pari-mutuel taxes increased slightly in FY 2006. They increased 9.1% or $43,959 when compared to FY 2005. Several tax breaks have been provided to the racing industry since 1995. The tax breaks listed below contribute, in part, to the reduction in parimutuel tax revenues experienced from the racing industry when compared to revenues received a few years ago. • • • • Tax reductions for greyhound tracks. Exemption from State tax on dollars wagered on simulcast. Hardship tax credit for tracks, which have suffered a decline in business. Capital improvement program tax reduction. Additional funds are received from the Arizona Department of Revenue transfer of unclaimed property funds to the Department of Racing. During FY 2006, the transfer was for $9.45 million. These dollars are distributed among the eight separate funds and enables the Department of Racing to reach the statutorily authorized levels for each fund. The dollars remaining are deposited into the General Fund, which received $6.23 million, from the Department of Racing’s portion of unclaimed property dollars in FY 2006. As the pari-mutuel tax revenues decline, the contributions from the unclaimed property fund to each of the eight funds increase. This in turn, reduces the funds available for the State’s General Fund. Therefore, the unclaimed property funds become increasingly more important to the continuation of the programs supported by these eight funds and the State’s General Fund. See tables and charts on page 38. The seven funds summarized on page 39 are the funds administered by the Department of Racing for various programs. The County Fairs Livestock & Agriculture Promotion Fund, the Exposition and State Fair Fund, and the Agricultural Consulting and Training Fund are administered by other State programs, as described below. • County Fairs Livestock & Agriculture Promotion Fund …………………Governor’s Office • Exposition and State Fair Fund ………………………..Arizona Exposition and State Fair • Agricultural Consulting and Training Fund ……………Arizona Department of Agriculture ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 36 Distribution of Department of Racing Revenues General Fund Breeders' Award County Fairs Racing Betterment Agriculture Promotion Exposition and State Fair County Fair Racing Administration of Betterment and Breeders' Award Stallion Award Agricultural Consulting/Training Horse Adoption Greyhound Adoption Total Distribution FY 2002 $4,444,693 800,000 800,000 1,200,000 400,000 300,000 FY 2003 $3,657,354 800,000 800,000 1,200,000 400,000 300,000 FY 2004 $4,640,891 800,000 800,000 1,200,000 400,000 300,000 FY 2005 $5,807,008 800,000 800,000 1,200,000 400,000 300,000 FY 2006 $6,485,360 800,000 800,000 1,200,000 400,000 300,000 45,000 40,000 80,951 45,000 40,000 72,508 45,000 40,000 82,006 45,000 40,000 94,480 1,186 2,825 $9,490,499 45,000 40,000 100,800 1,800 300 $10,173,260 N/A N/A N/A 3,400 $8,114,044 75 $7,314,937 150 $8,308,047 Distribution of Department of Racing Revenues FY 2006 General Fund 63.7% Agricultural Consulting/Training Fund 1.0% Breeders' Award Fund 7.9% Greyhound Adoption Fund 0.0% County Fairs Racing Betterment Fund 7.9% Horse Adoption 0.0% Agriculture Promotion Fund 11.8% Stallion Award Fund 0.4% Administration of Betterment & Breeders' Awards Fund 0.4% Exposition and State Fair Fund 3.9% County Fair Racing Fund 2.9% Total Department Revenues by Fiscal Year General Fund Revenues by Fiscal Year $7,000,000 $12,000,000 $6,485,360 $10,173,260 $5,807,008 $9,490,499 $10,000,000 $8,114,044 $6,000,000 $8,308,047 $5,000,000 $7,314,937 $8,000,000 $4,640,891 $4,444,693 $3,657,354 $4,000,000 $6,000,000 $3,000,000 $4,000,000 $2,000,000 $2,000,000 $1,000,000 $0 $0 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2002 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 37 FY 2003 FY 2004 FY 2005 FY 2006 Department of Racing Revenues by Category FY 2002 State Unclaimed Property Pari-Mutuel Tax License Fees Fines Boxing Tax Other Total FY 2003 FY 2004 FY 2005 FY 2006 $7,186,030 750,354 158,988 53,315 13,929 (37,643) $6,527,513 628,564 111,750 50,748 21,531 (25,169) $7,530,279 565,191 130,900 50,748 21,929 9,000 $8,706,424 483,901 193,974 58,073 29,116 19,011 $9,453,500 527,860 74,500 49,000 39,900 28,500 $8,124,973 $7,314,937 $8,308,047 $9,490,499 $10,173,260 Department of Racing Revenues by Category FY 2006 State Unclaimed Property 92.9% Pari-Mutuel Tax 5.2% Other 0.3% Boxing Tax 0.4% State Unclaimed Property Transfers by Fiscal Year Pari-Mutuel Tax Revenue by Fiscal Year $800,000 $750,354 $9,453,500 $10,000,000 $628,564 $700,000 License Fees 0.7% Fines 0.5% $9,000,000 $8,000,000 $565,191 $600,000 $8,706,424 $7,186,030 $527,860 $7,000,000 $483,901 $500,000 $6,000,000 $400,000 $5,000,000 $7,530,279 $6,527,513 $4,000,000 $300,000 $3,000,000 $200,000 $2,000,000 $1,000,000 $100,000 $0 $0 2002 2003 2004 2005 2002 2006 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 38 2003 2004 2005 2006 FY 2006 Appropriated and Non-Appropriated Funds DESCRIPTION OF FUNDS FY 2005 County Fair Racing (RCA2170 / A.R.S. 5-113) APPROPRIATED Source of Revenue: Receives 9% of revenue derived from pari-mutuel receipts, license fees, and unclaimed property (maximum of $300,000). Purpose of Fund: For the administration of county fair racing. FUNDS SPENT FY 2006 $360,969 $299,875 Administration of County Fair Racing & Breeders Awards Fund (RCA2018 / A.R.S. 5-113) APPROPRIATED Source of Revenue: Receives 1% of revenue derived from pari-mutuel receipts, license fees, and unclaimed property (maximum of $45,000). Purpose of Fund: To administer the Arizona County Fairs Racing Betterment Fund, the Arizona Breeders' Award Fund, the Arizona Stallion Award Fund, and the Greyhound Adoption Fund. FUNDS SPENT $77,135 $44,996 Arizona Breeders Award (RCA2206 / A.R.S. 5-113) NON-APPROPRIATED Source of Revenue: Receives 22% of revenue derived from pari-mutuel receipts, license fees, and unclaimed property (maximum of $800,000). Purpose of Fund: To award the breeder of every winning horse or greyhound foaled or whelped in this state. FUNDS SPENT $797,403 $808,389 County Fair Racing Betterment (RCA2207 / A.R.S. 5-113) NON-APPROPRIATED Source of Revenue: Receives 22% of revenue derived from pari-mutuel receipts, license fees, and unclaimed property (maximum of $800,000). Purpose of Fund: To provide a grant to each eligible county fair association conducting a county fair racing meeting. FUNDS SPENT $861,025 $826,561 Greyhound Adoption (RCA2015 / A.R.S. 5-113) NON-APPROPRIATED Source of Revenue: License fees collected from dog breeders, racing kennels, and other operations where greyhounds are raised for dog racing. Purpose of Fund: To provide grants to non-profit organizations to promote the adoption of retired racing greyhounds as domestic pets. FUNDS SPENT $3,143 $1,534 Retired Horse Adoption (RCA2015 / A.R.S. 5-113) NON-APPROPRIATED Source of Revenue: A 5% Retired Race Horse Surcharge is levied against each horse racing-related fine Purpose of Fund: To provide grants to non-profit organizations to promote the adoption of retired racing horses. FUNDS SPENT $0 $0 $39,992 $37,374 Stallion Award (RCA2315 / A.R.S. 5-113) NON-APPROPRIATED Source of Revenue: Receives 1% of revenue derived from pari-mutuel receipts, license fees, and unclaimed property (maximum of $40,000). Purpose of Fund: To award owners or lessees of stallions that bred winning horses in this state. FUNDS SPENT ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 39 Department of Racing Pari-Mutuel Tax and Hardship Tax Credit Projections The revenue projections developed by the Department of Racing and included in the tables below are based on historical levels and industry trends and assume the continued operation of each of Arizona’s commercial race tracks. These tables indicate anticipated State pari-mutuel taxes from dollars wagered over the next three fiscal years. The tables also provide actual and estimated amounts for the Hardship Tax Credit during the next three fiscal years. FY 2008 Estimated Pari-Mutuel Tax and Hardship Tax Credit TRACK ESTIMATED ESTIMATED ESTIMATED TAX DUE ESTIMATED BASE BASE YEAR FY 2007 AMOUNT FY 2007 % PARI-MUTUEL BASED ON FY 2008 YEAR AMOUNT WAGERED DECREASE TAX DUE CARRYOVER FY 2008 FROM FY 2007 TAX CREDIT WITH % DECREASE HARDSHIP CREDIT HARDSHIP TAX FY 2007 CREDIT CARRYOVER HORSE TRACKS: Fort Tuthill Downs FY 1994 $798,671 $0 -100.00% $0 $0 $0 $7,320 $7,320 Rillito Park FY 1990 3,887,981 883,292 -77.28% 24,448 18,894 56,682 173,342 230,024 Turf Paradise FY 1994 101,467,993 153,307,784 51.09% 647,502 0 0 0 0 Yavapai Downs FY 1994 17,490,826 34,527,884 97.41% 113,123 0 0 0 0 FY 1990 $12,262,396 $4,306,193 -71.57% $0 $0 $0 $360,850 $360,850 63,290,895 -39.72% 2,362,454 799,853 2,399,560 1,416,969 3,816,529 20,140,550 -45.62% 434,394 204,812 614,437 1,805,580 2,420,017 GREYHOUND TRACKS: Apache Greyhound Park Phoenix Greyhound Park FY 1990 Tucson Greyhound Park 49,391,582 FY 1994 46,293,967 FY 1990 38,110,346 FY 2009 Estimated Pari-Mutuel Tax and Hardship Tax Credit TRACK ESTIMATED ESTIMATED ESTIMATED TAX DUE ESTIMATED BASE BASE YEAR FY 2008 AMOUNT FY 2008 % PARI-MUTUEL BASED ON FY 2009 YEAR AMOUNT WAGERED DECREASE TAX DUE CARRYOVER FY 2009 FROM FY 2008 TAX CREDIT WITH % DECREASE HARDSHIP CREDIT HARDSHIP TAX FY 2008 CREDIT CARRYOVER HORSE TRACKS: Fort Tuthill Downs FY 1994 $798,671 $0 -100.00% $0 $0 $0 $7,320 $7,320 Rillito Park FY 1990 3,887,981 927,456 -76.15% 25,671 19,547 58,641 204,354 262,995 Turf Paradise FY 1994 101,467,993 Yavapai Downs FY 1994 160,973,173 58.64% 679,878 0 0 0 0 17,490,826 36,254,278 107.28% 118,779 0 0 0 0 FY 1990 $12,262,396 $4,521,502 -63.13% $0 $0 $0 $360,850 $360,850 66,455,440 -30.55% 2,480,576 757,806 2,273,417 1,335,952 3,609,370 19,737,739 -48.21% 425,706 205,215 615,646 1,994,311 2,609,958 GREYHOUND TRACKS: Apache Greyhound Park Phoenix Greyhound Park FY 1990 Tucson Greyhound Park 49,391,582 FY 1994 46,293,967 FY 1990 38,110,346 FY 2010 Estimated Pari-Mutuel Tax and Hardship Tax Credit TRACK ESTIMATED ESTIMATED ESTIMATED TAX DUE ESTIMATED BASE BASE YEAR FY 2009 AMOUNT FY 2009 % PARI-MUTUEL BASED ON FY 2010 YEAR AMOUNT WAGERED DECREASE TAX DUE CARRYOVER FY 2010 FROM FY 2009 TAX CREDIT WITH % DECREASE HARDSHIP CREDIT HARDSHIP TAX FY 2009 CREDIT CARRYOVER HORSE TRACKS: Fort Tuthill Downs FY 1994 $798,671 $0 -100.00% $0 $0 $0 $7,320 $7,320 Rillito Park FY 1990 3,887,981 973,829 -74.95% 26,954 20,203 60,609 236,041 296,649 Turf Paradise FY 1994 101,467,993 Yavapai Downs FY 1994 169,021,831 66.58% 713,871 0 0 0 0 17,490,826 38,066,992 117.64% 124,718 0 0 0 0 FY 1990 $12,262,396 $4,747,578 -61.28% $0 $0 $0 $360,850 $360,850 69,778,212 -27.08% 2,604,605 705,247 2,115,740 1,004,764 3,120,505 19,342,985 -49.24% 417,192 205,432 616,297 2,192,766 2,809,063 GREYHOUND TRACKS: Apache Greyhound Park Phoenix Greyhound Park FY 1990 49,391,582 FY 1994 46,293,967 FY 1990 38,110,346 Tucson Greyhound Park ________________________________________________________________ ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 40 Hardship Tax Credit The Department of Racing determines the amount, if any, of a Hardship Tax Credit available to the commercial horse and greyhound permittees. This credit supports the pari-mutuel industry by responding to the reduction in wagering that has occurred and offsetting the tax due the State. Determination of the FY 2007 Hardship Tax Credit Based on the FY 2006 Dollars Wagered FY 2006 TRACK FY 2006 FY 2006 TAX DUE FY 2007 BASE BASE YEAR AMOUNT % PARI-MUTUEL BASED ON HARDSHIP YEAR AMOUNT WAGERED DECREASE TAX DUE % DECREASE TAX CREDIT CARRYOVER FY 2007 FROM FY 2006 TAX CREDIT WITH HARDSHIP TAX FY 2006 CREDIT CARRYOVER HORSE TRACKS: Fort Tuthill Downs FY 1994 $798,671 $0 -100.00% $0 $0 $0 $7,320 $7,320 Rillito Park FY 1990 3,887,981 841,230 -78.36% 23,284 18,246 54,738 165,088 219,826 Turf Paradise FY 1994 43.90% 616,669 0 0 0 0 Yavapai Downs FY 1994 17,490,826 88.01% 107,736 0 0 0 0 $0 101,467,993 146,007,413 32,883,699 GREYHOUND TRACKS: Apache Greyhound Park FY 1990 $12,262,396 $4,101,136 -66.56% $0 Phoenix Greyhound Park FY 1990 49,391,582 60,277,043 -37.01% 2,249,956 FY 1994 46,293,967 FY 1990 38,110,346 20,551,582 -46.07% 443,259 Tucson Greyhound Park $0 $360,850 $360,850 832,598 2,497,793 1,349,494 3,847,287 204,225 1,719,600 2,332,275 612,675 Department of Racing Pari-Mutuel Tax Revenue - FY 2006 TRACK ALLOWABLE FY 2006 FY 2006 HARDSHIP CREDITS HANDLE PARI-MUTUEL TAX DUE $0 IN FY 2006 FY 2006 CAPITAL FY 2006 FY2006 FY 2006 FY 2006 IMPROVEMENT HARDSHIP COUNTY FAIR CHARITY PARI-MUTUEL TAX WITHHOLDINGS TAX CREDIT tCREDITS DAYS REVENUE $16,825 $6,460 $0 $0 527,860 HORSE TRACKS: Rillito Park $142,107 $841,230 $23,284 Turf Paradise 0 146,007,413 616,669 0 0 73,397 15,413 Yavapai Downs 0 32,883,669 107,736 89,991 0 17,746 0 0 $142,107 $179,732,342 $747,689 $89,991 $16,825 $97,603 $15,413 $527,860 Subtotal Horse Tracks GREYHOUND TRACKS: Apache Greyhound Park $296,317 $4,101,136 $0 $0 $0 $0 $0 $0 Phoenix Greyhound Park 3,029,834 60,277,043 2,249,956 0 2,193,905 0 56,052 0 Tucson Greyhound Park 1,969,067 20,551,582 443,259 0 443,259 0 0 0 Subtotal Greyhound Tracks $5,359,751 $84,929,761 $2,693,215 $0 $2,637,164 $0 $56,052 $0 GRAND TOTAL $5,501,858 $264,662,103 $3,440,904 $89,991 $2,653,989 $97,603 $71,464 $527,860 ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 41 Track Capital Improvements The Department was authorized by statute to encourage the improvement of racing facilities by reducing the pari-mutuel tax due the State. The percentages paid the State by the permittee was reduced by 1% of the total amount wagered in counties with a population over 500,000 and 27% in all other counties. This program continues to benefit the racing industry and the public by supporting completed capital improvement projects, which should result in increased revenue from pari-mutuel wagering. Prior approval of the Racing Commission for the capital improvement proposed was required to qualify for the reduction. This provision expired on June 30, 1992 for counties with populations of 500,000 or more and on June 30, 1999 for counties with populations of less than 500,000 according to the previous United States decennial census. The capital improvement dollars for projects approved before the expiration date may continue to be deducted from the pari-mutuel tax due until exhausted. The following table show dollars deducted by all racetracks during FY 2006. The only racetrack which has not exhausted the dollars approved is Yavapai Downs. Permittee Prescott Downs (Yavapai Downs) Other Permittees Project Description Grandstand & Clubhouse Structure, etc. Improvement Dollars Cumulative Dollars Deducted Dollars Approved FY 2006 Deducted Remaining Dollars Approved $52,196,636 $89,991 $475,400 $51,721,236 $0 $0 $0 $0 This table excludes permittees that have used all approved capital improvements dollars. ARIZONA DEPARTMENT OF RACING FY 2006 ANNUAL REPORT 42