State of Arizona Department of Racing Annual Report FY 2007 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 and Licensing Charts Breeders’ Awards, Stallion Awards and Racehorse Adoption Charts Commercial Horse Tracks Chart Rillito Park Chart Turf Paradise Chart Yavapai Downs Chart 7 7 8 9 10 11 12 COUNTY FAIR RACING Betterment Payments to Counties and Investigations Charts Licensing Chart County Fair Tracks Chart County Fair Racing Schedule and Statistics 13 14 15 16 17 COMMERCIAL GREYHOUND RACING Investigations and Licensing Charts Inspections, Breeders’ Awards and Greyhound Adoption Charts Commercial Greyhound Tracks Chart Apache Greyhound Park Chart Phoenix Greyhound Park Chart Tucson Greyhound Park Chart 18 18 19 20 21 22 23 TELETRACKING Teletrack Handle Chart Teletracking Activity – Commercial Horse Meets Chart Teletracking Activity – County Fair Meets Chart Teletracking Activity – Greyhounds Meets Chart 24 24 25 26 27 RACING REGULATION Licensing, Stewards’ Rulings by Track, and Civil Penalties/Fines Charts Investigations, Types of Investigations, and Director’s Rulings Charts Drug/Alcohol Abuse Investigations and Equine & Canine Drug Testing Charts License by Category Chart 28 28 29 30 31 BOXING REGULATION Sanctioned Events and Licensing Charts Investigations Chart 32 32 33 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 2007 ANNUAL REPORT 34 35 37 38 39 40 41 42 ARIZONA DEPARTMENT OF RACING GEOFFREY E. GONSHER JANET NAPOLITANO GOVERNOR DIRECTOR October 1, 2007 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 2007 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 $266.6 million, a decrease of $18.8 million or 6.6% from the prior year. The total pari-mutuel tax receipts amounted to $431,437, a decrease of 18.3% from the prior year. FY 2007 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 October 1, 2007 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 four years, the Department has proposed various options for the generation of revenue from the industry to support its statutory, administrative, and regulatory duties. The industry and legislature, however, have not supported this objective. This year, the Department will again work with the industry and the Racing Commission to propose various mechanisms in which the racing industry funds a portion of the Department operating costs related to racing regulation while reducing the need for General Fund monies. 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 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. James N. Chilcoat, Sr., Racing Commission 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. Paul Ulan, Racing Commission Vice-Chairman, 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. 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 was appointed to the Racing Commission in 2005 to serve as the representative of the Horse Racing Industry. Ms. Owens was raised in the thoroughbred racing industry in Arizona and her family actively participates in the Arizona Racing and Breeding Program. She spent several years in official positions at Canterbury Downs, San Juan Downs, Columbus Racetrack, and Turf Paradise. She currently serves as Secretary/Treasurer of the Association of Racing Commissioners International (ARCI) and owns her own business. Leslie A. Wootten was appointed to the Racing Commission to serve as the representative of the Greyhound Racing Industry. Ms. Wootten’s family experience with greyhound racing dates back to the 1800s. Ms. Wootten is a historian of the sport and a regular contributor to the monthly magazine of the National Greyhound Association, as well as in Arizona Player: Gaming and Entertainment Guide. Ms. Wootten has taught creative writing at Central Arizona College and coordinated its Visiting Writers Series, a program supported by the Arizona Commission on the Arts. ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 1 Awards HORSERACING INDUSTRY AWARDS The Racing Commission Horseracing Industry Awards Program recognizes individuals for service to the horseracing industry. The following awards were presented at the December 13, 2006 Commission meeting. Recognition of Excellence Award. Herman Mineer, Apache County Fair Racing Lifetime Achievement Award. Ralph and Gloria Andersen, owners, trainers GREYHOUND INDUSTRY AWARDS The Racing Commission Greyhound Racing Industry Recognition Program recognizes individuals for service to the greyhound racing industry. The following awards were presented at the December 13, 2006 Commission meeting. Lifetime Achievement Award. Gene Cowart, greyhound kennel owner, breeder Recognition of Excellence Award. Bryan Stoyer, retired Department of Racing Chief Greyhound Steward 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 conducts an annual Employee Recognition Program 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. The following are the FY 2007 recipients. Employee of the Year Award. John Parkey, Special Investigator Supervisor of the Year Award. Nan Mitchell, Administrative Services Coordinator Team of the Year Award. John Neely, DVM, Phoenix Greyhound Park Veterinarian Angela Schmitt, DVM, Phoenix Greyhound Park Veterinarian ARIZONA DEPARTMENT OF RACING FY 2007 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 2007 ANNUAL REPORT 3 RACING SERVICES COMMERCIAL AND COUNTY FAIR RACING Commercial Horse, Greyhound and County Fair Racing RACING STATISTICS FY 2003 Race Days/Performances (including 12 Charity Days) Live Race Days Dark Day-Simulcast only Total Race Days FY 2004 FY 2005 FY 2006 FY 2007 981 611 1,592 988 605 1,593 897 697 1,594 933 662 1,595 909 681 1,590 1,010 988 897 933 909 13,534 230,028 243,562 12,871 265,248 278,119 11,778 263,586 275,364 12,513 262,275 274,788 11,791 284,597 296,388 Attendance On-Track Off-Track Total Attendance 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 1,842,048 723,879 887,078 1,610,957 Pari-Mutuel Handle Average Handle per Race Day $166,823 $165,786 $165,974 $178,946 $167,667 Breakdown by location On-Track Handle Off-Track Handle $98,925,176 $166,657,437 $96,023,226 $168,073,643 $88,766,221 $175,795,847 $90,944,292 $194,474,484 $84,486,049 $182,104,065 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $77,780,820 $188,809,295 $266,590,114 $204,188,047 $203,820,895 $204,344,382 $219,060,582 $203,766,212 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 $628,564 $565,191 $483,901 $527,860 $431,437 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 $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 $53,620,670 100,917 0 0 55,863 2,353,026 0 1,085,469 $57,215,946 Purses $20,842,682 $20,497,445 $20,708,997 $22,314,331 $21,133,206 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 4 FY 2005 FY 2006 FY 2007 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 2007, the Arizona Racing Commission approved a three-year commercial racing permit for Turf Paradise. Yavapai County Fair Association filed a new application for commercial racing at Yavapai Downs for calendar years 2007, 2008 and 2009. By statute, Yavapai Downs may continue to operate under the permit issued Yavapai County Fair Association until the Arizona Racing Commission, upon recommendation by the Department, has finally ruled on the application. Rillito Park did not apply for commercial race dates for 2007. 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 06/01/06 - 05/31/09 Yavapai County Fair Association Yavapai Downs at Prescott Valley 05/26/07 - 09/04/09 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 5 COMMERCIAL TRACKS Commercial Horse and Greyhound Racing RACING STATISTICS FY 2003 Race Days/Performances (including 12 Charity Days) Live Race Days Dark Day-Simulcast only Total Race Days FY 2004 FY 2005 FY 2006 FY 2007 921 609 1,530 927 603 1,530 835 695 1,530 874 659 1,533 845 679 1,524 950 927 835 874 845 13,028 227,928 240,956 12,358 262,400 274,758 11,244 260,574 271,818 11,994 259,747 271,741 11,219 281,048 292,267 Attendance On-Track Off-Track Total Attendance 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 1,639,950 570,571 818,825 1,389,396 Pari-Mutuel Handle Average Handle per Race Day $161,673 $160,457 $159,162 $172,643 $160,357 Breakdown by location On-Track Handle Off-Track Handle $91,610,048 $155,749,842 $88,355,137 $157,143,398 $80,337,461 $163,180,209 $82,814,154 $181,847,949 $75,031,996 $169,352,518 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $70,820,823 $173,563,691 $244,384,514 $189,919,817 $189,272,455 $187,771,621 $203,192,511 $186,927,263 $628,564 $565,191 $483,901 $527,860 $431,437 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 $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 $49,230,357 100,917 0 0 55,863 2,353,026 0 968,928 $52,709,092 Purses $18,842,906 $18,435,371 $18,523,133 $20,107,799 $18,520,580 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 Live On-Track vs. Off-Track Handle 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 6 FY 2004 FY 2005 FY 2006 FY 2007 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. Investigation numbers listed below reflect the total number of investigations conducted for every incident and background investigation, which includes processing of fingerprints and any resulting false applications. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures Number of Stewards’ rulings issued Number of incident investigations Total number of investigations conducted Percentage of incident investigations resulting in disciplinary action Percentage of Stewards’ rulings upheld on appeal to the Director Percentage of total investigations resulting in disciplinary action FY 2005 FY 2006 FY 2007 410 100 411 210 458 140 1,534 40% 1,307 44% 1,519 30% 100% 99% 96% 15% 36% 22% Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. A background investigation is conducted for each license applicant who submits fingerprints as required by Department policy. 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 background/license investigations conducted Percentage of background/license investigations resulting in disciplinary action Percentage of license denials upheld on appeal FY 2005 FY 2006 FY 2007 3,941 4 1,434 9% 2,229 9 1,097 24% 2,817 11 1,379 14% 100% 99% 99% ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 7 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 Percentage of registered breeders winning awards Number of registered horses Percentage of registered horses winning awards Quarter Horse Breeders’ Awards Thoroughbred Breeders’ Awards Stallion Awards FY 2005 FY 2006 FY 2007 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 3,380 3.5% 6,347 3.9% $82,260 $683,863 $35,388 Racehorse Adoption The Department provides grants to non-profit organizations to promote the adoption of retired racehorses in Arizona. The funds for this program are generated from a surcharge against all civil penalties assessed in connection with horseracing in Arizona. The program went into effect in 2005 and the first award was made in 2006. Performance Measures FY 2005 FY 2006 FY 2007 0 $0 1 $2,500 1 $1,890 Number of grants awarded Amount of grants awarded ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 8 COMMERCIAL HORSE TRACKS Rillito Park, Turf Paradise, Yavapai Downs RACING STATISTICS FY 2003 Race Days/Performances (including 3 charity days) Live Race Days Dark Day-Simulcast Only Total Race Days FY 2004 FY 2005 FY 2006 FY 2007 211 236 447 208 232 440 201 242 443 207 239 446 185 252 437 211 208 201 207 185 2,079 37,039 39,118 1,866 44,178 46,044 1,872 46,735 48,607 1,875 47,514 49,389 1,674 48,881 50,555 406,922 511,907 918,829 415,823 543,899 959,722 380,465 581,299 961,764 432,654 683,821 1,116,475 328,492 592,070 920,562 $349,557 $364,636 $364,857 $402,987 $372,843 $58,231,225 $98,020,838 $57,798,008 $102,641,830 $55,917,152 $105,714,653 $58,639,790 $121,092,552 $50,914,112 $112,018,399 $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 $27,254,506 $135,678,005 $162,932,511 $120,365,579 $124,211,953 $125,373,998 $138,105,510 $124,571,918 $528,708 $480,282 $483,901 $527,860 $431,437 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues $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 $32,688,941 100,917 0 12,743 0 768,659 $33,571,259 Purses $14,090,151 $13,954,044 $14,130,954 $15,515,306 $14,260,653 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 9 FY 2004 FY 2005 FY 2006 FY 2007 RILLITO PARK 4502 North First Avenue Tucson, Arizona 85728 Pima County Fair Horse Racing Commission RACING STATISTICS FY 2003 Race Days/Performances Live Race Days Dark Day-Simulcast Only Total Race Days FY 2004 FY 2005 FY 2007 Racing Dates: None (see county fairs) FY 2006 FY 2007 10 0 10 9 0 9 9 0 9 9 0 9 0 0 0 10 9 9 9 0 91 0 91 84 0 84 86 0 86 83 0 83 0 0 0 23,453 0 23,453 24,569 0 24,569 36,238 0 36,238 40,705 0 40,705 0 0 0 $77,492 $89,521 $82,955 $93,470 $0 Breakdown by location On-Track Handle Off-Track Handle $774,915 $0 $805,693 $0 $746,592 $0 $841,230 $0 $0 $0 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $774,915 0 $774,915 $805,693 0 $805,693 $746,592 0 $746,592 $841,230 0 $841,230 $0 0 $0 $597,804 $621,883 $575,682 $643,248 $0 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 $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 $0 0 0 0 0 0 $0 Purses $173,139 $165,283 $205,624 $189,054 $0 State Pari-Mutuel Revenues 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 10 FY 2005 FY 2006 FY 2007 TURF PARADISE 1501 West Bell Road Phoenix, Arizona 85023 TP Racing, L.L.L.P. RACING STATISTICS FY 2003 Race Days/Performances (including 3 charity days) Live Race Days Dark Day-Simulcast Only Total Race Days FY 2007 Racing Dates: July 1, 2006-June 30, 2007 FY 2004 FY 2005 FY 2006 FY 2007 152 196 348 154 194 348 144 202 346 151 197 348 133 211 344 152 154 144 151 133 1,551 33,329 34,880 1,388 40,325 41,713 1,356 42,852 44,208 1,375 43,371 44,746 1,205 44,605 45,810 314,606 374,886 689,492 324,061 408,908 732,969 301,100 407,370 708,470 331,511 473,525 805,036 282,764 420,788 703,552 $366,991 $382,892 $378,807 $419,562 $373,056 $55,788,355 $71,924,499 $55,502,312 $77,744,086 $53,625,809 $77,441,273 $56,037,345 $89,970,068 $48,856,296 $79,475,014 $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 $22,208,647 106,122,663 $128,331,310 $98,413,195 $103,130,018 $101,896,223 $112,372,468 $98,117,698 $528,708 $480,282 $483,901 $527,860 $431,437 Track Mutuel Revenues Track Commission Capital Improvement Rebate Capital Improvement-Non Taxable Charity Day Hardship Tax Credit Breakage Total Track Revenues $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 $25,747,068 0 0 12,743 0 600,244 $26,360,055 Purses $11,878,800 $11,834,760 $11,690,443 $12,841,141 $11,532,280 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 11 FY 2005 FY 2006 FY 2007 YAVAPAI DOWNS 10501 Hwy. 89A Prescott Valley, Arizona 86314 RACING STATISTICS Yavapai County Fair Association FY 2003 Race Days/Performances Live Race Days Dark Day-Simulcast Only Total Race Days FY 2004 FY 2007 Racing Dates: July 6, 2006 - September 1, 2006 May 26, 2007 - June 29, 2007 FY 2005 FY 2006 FY 2007 49 40 89 45 38 83 48 40 88 47 42 89 52 41 93 49 45 48 47 52 437 3,710 4,147 394 3,853 4,247 430 3,883 4,313 417 4,143 4,560 469 4,276 4,745 68,863 137,021 205,884 67,193 134,991 202,184 43,127 173,929 217,056 60,438 210,296 270,734 45,728 171,282 217,010 $311,958 $317,925 $338,842 $369,480 $372,056 Breakdown by location On-Track Handle Off-Track Handle $1,667,955 $26,096,339 $1,490,003 $24,897,744 1,544,751 28,273,380 1,761,215 31,122,484 2,057,817 32,543,385 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 5,045,859 29,555,342 $34,601,201 $21,354,580 $20,460,052 $22,902,092 $25,089,795 $26,454,220 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 $5,512,369 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 $6,941,873 100,917 0 0 0 168,414 $7,211,204 Purses $2,038,212 $1,954,001 $2,234,887 $2,485,110 $2,728,373 State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Live Simulcast On-Track vs. Off-Track Handle $35 $35 $30 $30 $25 Million Million Source of Handle $20 $15 $25 $20 $15 $10 $10 $5 $5 $ $ FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 * Prescott Downs through 2001 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 12 FY 2005 FY 2006 FY 2007 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. County fairs are currently in the midst of three-year county fair racing permits issued for fiscal years 2006, 2007 and 2008. In FY 2007, a total of $1.41 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, authorized for the administration of county fair racing, is generated by 9% of all pari-mutuel receipts, license fees, and State unclaimed property up to $450,000 annually. In FY 2007, this fund received $450,000, but only $300,000 was appropriated for operating and regulatory expenses. In FY 2007, the Department spent $299,700 for this program. 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 $1.2 million annually. In FY 2007, this fund received $1.2 million, and $1.11 million was distributed. Seven of the ten counties conducting a meet in FY 2007 received $55,000 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, $35,825, $69,300, or $70,100 each in Betterment Grants last year. These funds were used for personnel, maintenance, security, emergency medical services, capital improvements to racing facilities, and other operating expenses. Counties that began their meet after January 1, 2007 received a significant increase in betterment monies because of legislative changes to the revenue caps that became effective on January 1, 2007. The five counties that conducted their racing at commercial sites were not entitled to the funds. ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 13 County Fair Racing Betterment Payments to Counties 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 Purses $46,800 55,000 55,000 46,800 55,000 55,000 0 0 55,000 0 55,000 0 55,000 46,800 0 Betterment $35,825 70,100 69,300 35,825 70,100 70,100 0 0 70,100 0 69,300 0 70,100 23,050 0 Total $82,625 125,100 124,300 82,625 125,100 125,100 0 0 125,100 0 124,300 0 125,100 69,850 0 $525,400 $583,800 $1,109,200 Investigations The Department investigates possible violations of racing laws and rules and imposes administrative sanctions on those determined to have committed violations. Investigation numbers listed below reflect the total number of investigations conducted for every incident and background investigation, which includes processing of fingerprints and any resulting false applications. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures Number of Stewards’ rulings issued Number of incident investigations Total number of investigations conducted Percentage of incident investigations resulting in disciplinary action Percentage of total investigations resulting in disciplinary action Percentage of Stewards’ rulings upheld on appeal to the Director FY 2005 FY 2006 FY 2007 41 25 498 16% 41 76 372 11% 33 22 355 32% 11% 31% 21% 100% 100% 100% ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 14 County Fair Racing Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. A background investigation is conducted for each license applicant who submits fingerprints as required by Department policy. 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 background/license investigations conducted Percentage of background/license investigations resulting in disciplinary action Percentage of license denials upheld on appeal FY 2005 FY 2006 FY 2007 715 1 473 6% 325 0 296 13% 660 2 333 15% 100% 100% 100% ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 15 COUNTY FAIR TRACKS County Fair Racing at Fairs and Commercial Tracks RACING STATISTICS FY 2003 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 2004 FY 2005 FY 2006 FY 2007 60 2 62 61 2 63 62 2 64 59 3 62 64 2 66 60 61 62 59 64 506 2,100 2,606 513 2,848 3,361 534 3,012 3,546 519 2,528 3,047 572 3,549 4,121 105,907 57,999 163,906 127,759 58,814 186,573 127,942 70,708 198,650 128,477 73,621 202,098 153,308 68,253 221,561 $293,915 $295,212 $328,819 $334,785 $336,448 Breakdown by location On-Track Handle Off-Track Handle $7,315,128 $10,907,595 $7,668,089 $10,930,245 $8,428,760 $12,615,638 $8,130,138 $12,626,535 $9,454,053 $12,751,547 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $6,959,997 15,245,603 $22,205,600 $14,268,230 $14,548,440 $16,572,761 $15,868,071 $16,838,949 DISTRIBUTION OF REVENUES Returned to Wagering Public $0 $0 $0 $0 $0 Track Mutuel Revenues Track Commission Breakage Total Track Revenues $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 $4,390,313 116,542 $4,506,854 Purses $1,999,776 $2,062,074 $2,185,863 $2,206,532 $2,612,626 State Pari-Mutuel Revenues Racetrack Trends at a Glance On-Track Off-Track Source of Handle $18 $16 $14 $12 $10 $8 $6 $4 $2 $ $14 $12 Million $10 Million Live Simulcast On-Track vs. Off-Track Handle $8 $6 $4 $2 $ FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 16 FY 2005 FY 2006 FY 2007 County Fair Racing Schedule and Statistics FY 2007 Race Days ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 17 Fairs at Non-Commercial Tracks Coconino County Fair at Flagstaff June 30, July 1, 2, 3, 4, 5, 2006 Apache County Fair at St. Johns September 16, 17, 23, 24, 2006 Gila County Fair at Globe September 30, October 1, 7, 8, 2006 Pima County Fair at Tucson February 10, 11, 17, 18, 24, 25, March 3, 4, 2007 Greenlee County Fair at Duncan March 10, 11, 17, 18, 2007 Graham County Fair at Safford March 24, 25, 31, April 1, 2007 Cochise County Fair at Douglas April 14, 15, 21, 22, 2007 Santa Cruz County Fair at Sonoita April 28, 29, May 5, 6, 2007 Mohave County Fair at Kingman May 12, 13, 19, 20, 2007 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 36 280 $2,787,581 $2,176,292 22,095 $2,144,024 $550,729 $14,560 $191,626 4 30 0 $44,445 $0 1,372 $34,625 $8,504 $427 $53,841 4 32 0 $76,695 $0 1,950 $59,542 $14,938 $681 $60,787 8 78 0 $915,587 $0 39,491 $699,970 $190,569 $6,736 $225,892 4 36 0 $104,710 $0 2,048 $81,572 $19,973 $1,071 $82,090 4 36 0 $141,509 $0 5,900 $109,839 $27,516 $1,324 $69,868 4 38 0 $119,878 $0 8,250 $93,506 $23,079 $896 $234,276 4 36 0 $190,421 $0 11,200 $148,284 $36,780 $1,548 $111,219 4 32 0 $125,293 $0 3,100 $97,856 $23,748 $1,184 $82,158 42 354 280 $4,506,119 $2,176,292 95,406 $3,469,218 $895,835 $28,427 $1,111,757 4 38 157 $1,741,887 $1,254,819 12,546 $1,282,943 $347,333 $8,686 $143,014 4 36 553 $3,185,293 $2,289,545 25,043 $2,499,120 $625,544 $15,895 $279,645 4 36 515 $2,749,971 $2,175,488 16,561 $2,104,313 $543,291 $13,306 $226,458 4 36 634 $3,487,452 $2,509,078 24,080 $2,598,333 $683,793 $18,178 $303,793 4 36 729 $3,372,890 $2,524,005 27,860 $2,552,465 $666,766 $17,093 $279,563 Fairs at Commercial Tracks Yavapai County Fair at Prescott Valley (Yavapai Downs) September 2, 3, 4, 5, 2006 Maricopa County Fair at Phoenix (Turf Paradise) January 6, 7, 27, 28, 2007 La Paz County Fair at Phoenix (Turf Paradise) January 13, 14, 20, 21, 2007 Pinal County Fair at Phoenix (Turf Paradise) February 10, 11, 17, 18, 2007 Yuma County Fair at Phoenix (Turf Paradise) March 3, 4, 24, 25, 2007 Navajo County Fair at Phoenix (Turf Paradise) March 10, 11, 17, 18, 2007 Subtotal - Fairs at Commercial Tracks 4 36 681 $3,161,989 $2,316,376 20,065 $2,332,557 $627,751 $14,956 $268,396 24 218 3,269 $17,699,481 $13,069,311 126,155 $13,369,731 $3,494,478 $88,115 $1,500,869 Total - All County Fair Racing 66 572 3,549 $22,205,600 $15,245,603 221,561 $16,838,949 $4,390,313 $116,542 $2,612,626 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. Investigation numbers listed below reflect the total number of investigations conducted for every incident, inspection, and background investigation, which includes processing of fingerprints and any resulting false applications. All races are observed and supervised to ensure that all participants comply with the rules of racing. Performance Measures Number of Stewards’ rulings issued Number of incident investigations Total number of investigations conducted Percentage of incident investigations resulting in disciplinary action Percentage of total investigations resulting in disciplinary action Percentage of Stewards’ rulings upheld on appeal to the Director FY 2005 FY 2006 FY 2007 106 61 711 5% 184 93 458 12% 195 201 575 19% 15% 40% 47% 100% 100% 100% Licensing The Department issues licenses to participate in racing to those who are qualified and eligible. A background investigation is conducted for each license applicant who submits fingerprints as required by Department policy. 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 background/license investigations conducted Percentage of background/license investigations resulting in disciplinary action Percentage of license denials upheld on appeal FY 2005 FY 2006 FY 2007 1,420 2 650 7% 566 2 365 25% 522 1 374 18% 100% 100% 100% ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 18 Commercial Greyhound Racing Inspections The Department inspects greyhound farms, kennels, vehicles that haul greyhounds and other operations after the facilities have satisfied requirements. Performance Measures FY 2005 FY 2006 FY 2007 36 50 6% 8 58 4% 8 87 1.2% 127 N/A 76 N/A 104 45 Number of facility licenses issued Number of inspections conducted at facilities Percentage of inspections resulting in violations and disciplinary action Number of litter inspections Number of vehicle inspections 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 Percentage of breeders winning awards Number of greyhounds earning awards Number of registered greyhounds FY 2005 FY 2006 FY 2007 $379,768 8% 689 8,707 $298,026 8% 664 9,439 $455,259 49% 639 9,909 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 2007, the fund received $200. Performance Measures Number of grants awarded Amount of grants awarded FY 2005 FY 2006 FY 2007 2 $3,143 2 $1,534 0 $0 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 19 COMMERCIAL GREYHOUND TRACKS Apache Greyhound, Phoenix Greyhound, Tucson Greyhound FY 2003 RACING STATISTICS Race Days/Performances (including 9 charity days) Live Race Days Dark Day-Simulcast only Total Race Days FY 2004 FY 2005 FY 2006 FY 2007 710 373 1,083 719 371 1,090 634 453 1,087 667 420 1,087 660 427 1,087 739 719 634 667 660 Number of Races Live Races Simulcast Races Total Number of Races 10,949 190,889 201,838 10,492 218,222 228,714 9,372 213,839 223,211 10,119 212,233 222,352 9,545 232,167 241,712 Attendance On-Track Off-Track Total Attendance 330,645 268,404 599,049 309,405 245,444 554,849 260,175 252,995 513,170 258,294 265,181 523,475 242,079 226,755 468,834 Pari-Mutuel Handle Average Handle per Race Day $84,125 $78,036 $75,332 $78,132 $74,933 Breakdown by location On-Track Handle Off-Track Handle $33,378,823 $57,729,004 $30,557,129 $54,501,568 $24,420,309 $57,465,556 $24,174,364 $60,755,397 $24,117,884 $57,334,119 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $43,566,317 $37,885,687 $81,452,003 $69,554,238 $65,060,502 $62,397,624 $65,087,000 $62,355,345 $99,856 $84,909 $0 $0 $0 $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 $16,541,416 0 0 0 43,121 2,353,026 0 200,269 $19,137,832 $4,752,755 $4,481,327 $4,392,179 $4,592,493 $4,259,927 Total Live Performances (Matinee & Evening) 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 20 FY 2004 FY 2005 FY 2006 FY 2007 APACHE GREYHOUND PARK 2551 West Apache Trail Apache Junction, Arizona 85220 American Greyhound Racing, Inc. RACING STATISTICS FY 2003 Race Days/Performances Live Race Days Dark Day-Simulcast only Total Race Days FY 2007 Racing Dates: July 1, 2006-June 30, 2007 FY 2004 FY 2005 FY 2006 FY 2007 52 310 362 56 308 364 0 362 362 0 362 362 0 362 362 52 56 0 0 0 774 59,484 60,258 834 60,250 61,084 0 60,270 60,270 0 64,529 64,529 0 72,968 72,968 Attendance On-Track Off-Track Total Attendance 127,819 0 127,819 126,750 0 126,750 81,353 0 81,353 82,160 0 82,160 79,200 0 79,200 Pari-Mutuel Handle Average Handle per Race Day Total Live Performances (Matinee & Evening) Number of Races Live Races Simulcast Races Total Number of Races $14,846 $14,511 $9,629 $11,329 $12,191 Breakdown by location On-Track Handle Off-Track Handle $5,374,389 $0 $5,281,988 $0 $3,485,747 $0 $4,101,136 $0 $4,413,071 $0 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $0 $4,413,071 $4,413,071 $4,092,042 $4,103,541 $2,670,590 $3,223,463 $3,441,643 $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 $1,032,928 0 0 0 0 0 0 9,110 $1,042,037 $255,152 $160,366 $187,587 $201,092 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 $1,135,328 0 27,383 (27,383) 4,710 75,362 0 17,158 $1,232,558 Purses $278,658 Racetrack Trends at a Glance Live Simulcast On-Track vs. Off-Track Handle $10 $5 $9 $5 $8 $4 $7 $4 Million Million On-Track Off-Track $6 $5 $4 $3 $3 $2 $3 $2 $2 $1 $1 $1 $ Source of Handle $ FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 21 FY 2005 FY 2006 FY 2007 PHOENIX GREYHOUND PARK 3801 East Washington Street Phoenix, Arizona 85036 American Greyhound Racing, Inc. RACING STATISTICS FY 2003 FY 2004 FY 2007 Racing Dates: July 1, 2006-June 30, 2007 FY 2005 FY 2006 FY 2007 Race Days/Performances (including 9 charity day) Live Race Days Dark Day-Simulcast only Total Race Days 349 10 359 352 11 363 352 10 362 362 0 362 362 0 362 Total Live Performances (Matinee & Evening) 378 352 352 362 362 5,486 57,608 63,094 5,169 74,579 79,748 5,387 67,266 72,653 5,770 63,841 69,611 5,733 70,123 75,856 148,984 183,820 332,804 133,309 165,126 298,435 127,079 165,341 292,420 123,617 171,657 295,274 122,821 150,734 273,555 $172,202 $160,503 $159,323 $166,511 $153,588 Breakdown by location On-Track Handle Off-Track Handle $18,182,026 $43,638,503 $16,906,712 $41,355,918 $15,080,705 $42,594,136 $15,043,286 $45,233,757 $14,071,955 $41,526,811 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $37,733,613 17,865,152 $55,598,765 $46,744,353 $44,174,254 $43,953,881 $45,922,489 $42,367,781 $99,856 $84,909 $0 $0 $0 $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 $10,757,869 0 0 0 43,121 2,032,228 0 143,872 $12,977,090 $3,317,197 $3,188,597 $3,189,057 $3,352,976 $3,095,274 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 Source of Handle $45 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $ $40 $35 $30 Million Million Live Simulcast On-Track vs. Off-Track Handle Off-Track $25 $20 $15 $10 $5 $ FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 FY 2004 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 22 FY 2005 FY 2006 FY 2007 TUCSON GREYHOUND PARK 2601 South Third Avenue Tucson, Arizona 85713 Tucson Greyhound Park, Inc. RACING STATISTICS FY 2003 Race Days/Performances Live Race Days Dark Day-Simulcast only Total Race Days FY 2004 FY 2007 Racing Dates: July 1, 2006-June 30, 2007 FY 2005 FY 2006 FY 2007 309 53 362 311 52 363 282 81 363 305 58 363 298 65 363 309 311 282 305 298 4,689 73,797 78,486 4,489 83,393 87,882 3,985 86,303 90,288 4,349 83,863 88,212 3,812 89,076 92,888 Attendance On-Track Off-Track Total Attendance 53,842 84,584 138,426 49,346 80,318 129,664 51,743 87,654 139,397 52,517 93,524 146,041 40,058 76,021 116,079 Pari-Mutuel Handle Average Handle per Race Day $66,058 $59,267 $57,094 $56,616 $59,064 Breakdown by location On-Track Handle Off-Track Handle $9,822,408 $14,090,501 $8,368,429 $13,145,650 $5,853,857 $14,871,420 $5,029,942 $15,521,640 $5,632,858 $15,807,308 Breakdown by source Live Races Simulcast Races Total Pari-Mutuel Handle $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 $5,832,704 15,607,463 $21,440,167 $18,717,843 $16,782,707 $15,773,153 $15,941,049 $16,545,921 $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 $5,138,760 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 $4,750,619 0 0 0 320,798 47,288 $5,118,705 Purses $1,156,900 $1,037,578 $1,042,756 $1,051,930 $963,561 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 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 23 FY 2004 FY 2005 FY 2006 FY 2007 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 2007. 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 $182.1 million. This included $124.9 million for horse racing and $57.3 million for greyhound racing. The State of Arizona received $203,221 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 declined 6.5% during FY 2007 from the prior year. The Table below summarizes the teletrack handle generated by commercial and county fair meets. Teletrack Handle FY 2006 FY 2007 $89,970,048 $79,467,200 Phoenix Greyhound Park 45,152,079 41,525,858 Yavapai Downs 31,147,803 32,543,425 Tucson Greyhound Park 15,734,151 15,793,792 Turf Paradise (Fair Meets) 7,789,048 8,866,302 Yavapai Downs (Fair Meets) 2,942,721 1,542,698 Fort Tuthill Downs (Fair Meet) 2,074,058 2,440,143 0 0 $194,809,908 $182,179,418 Track Turf Paradise Rillito Park* TOTAL * No teletracking since FY 2000. ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 24 TELETRACKING ACTIVITY - COMMERCIAL HORSE MEETS YAVAPAI DOWNS City Site AHWATUKEE APACHE JUNCTION APACHE JUNCTION BENSON BUCKEYE CASA GRANDE CAVE CREEK CHANDLER CHANDLER COTTONWOOD FLAGSTAFF GLENDALE GOODYEAR GREEN VALLEY KINGMAN LAKE HAVASU CITY MARANA NEW RIVER PARKER PAYSON PEORIA PEORIA PEORIA PHOENIX PHOENIX 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 SCOTTSDALE SEDONA SHOW LOW SIERRA VISTA SURPRISE SURPRISE TEMPE TEMPE TEMPE TEMPE TEMPE TEMPE TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON WICKENBERG YUMA YUMA PAYTON'S PLACE / BLEACHER'S APACHE GREYHOUND PARK ARIZONA JOE'S BIG BOY'S ARENA GRILL WADDEL'S CORRAL MCMASHER'S SPORTS BAR HAROLD'S RESTAURANT DIRTY DRUMMER STADIUM CLUB ZOOMER'S SPORTS BAR MUSEUM CLUB MAX'S SPORTS BAR ROMAN'S OASIS GREEN VALLEY LANES CERBAT HILLS GALLAGHER'S AGAIN OLD FATHER INN GAVILAN PEAK JULIO'S FAMOUS SAM'S GALLAGHER'S GRAND INN / RAMADA 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 GRILL GALLAGHER'S / CHEERLEADER'S GALLAGHER'S - 16TH STREET HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR RESTAURANT PADRE MURPHY'S ROMAN'S COUNTY LINE UNO MAS BAR & GRILL TURF PARADISE MATT'S SALOON ANTELOPE LANES YAVAPAI DOWNS QUARTZSITE YACHT CLUB ROCK SPRINGS CAFE CHALO'S LA CASA REYNOSO CASINO ARIZONA UPPER DECK SPORTS GRILL LOS ABRIGADOS RESORT RT'S BLACK BULL P.C.'S LOUNGE COYOTE ALLEY RUNNER'S SPORTS BAR BOSTON'S GRILLE DERBY GRILL HORSE & HOUND-OFF BROADWAY SIX SHOOTER'S SKIP & JAN'S STRAY CAT AIRPORT INN ARIZONA ALE HOUSE FAMOUS SAM'S-EAST FAMOUS SAM'S-CENTRAL FAMOUS SAM'S-SOUTH GOLDEN PIN LANES JEFF'S PUB PUTNEY'S SPORTS BAR RILLITO PARK TOUCHDOWN'S TUCSON GREYHOUND PARK MECCA RESTAURANT FAMOUS SAM'S RON'S PLACE Sub-Total Handle Revenue $550,795 890,483 301,563 54,548 82,050 379,991 344,782 1,671,083 1,194,700 188,389 413,964 1,186,031 245,161 24,196 274,222 358,011 335,100 302,452 89,068 120,148 354,313 732,599 671,215 173,718 751,162 590,494 1,118,280 167,029 1,671,320 415,586 158,177 346,146 176,116 713,870 611,308 248,478 715,250 1,854,724 603,145 495,794 391,034 312,890 72,322 120,867 228,039 771,556 346,603 38,877 419,187 432,545 249,112 486,384 441,712 326,147 1,103,142 190,429 603,225 433,230 101,667 137,843 155,197 208,899 92,960 593,378 440,417 67,171 581,724 807,171 103,915 466,335 243,986 $32,543,425 TURF PARADISE Performances - Handle 93 93 93 35 92 93 93 93 93 93 93 93 91 33 93 93 93 81 62 93 93 93 92 93 92 93 93 93 93 93 92 93 88 93 90 93 93 93 93 54 93 93 62 85 90 58 35 35 92 93 93 93 93 58 93 35 58 93 93 58 93 93 92 93 93 35 93 93 67 58 35 5,854 $1,346,829 2,582,012 970,447 394,051 252,457 1,179,748 1,094,732 4,350,780 3,256,442 601,804 813,519 3,264,494 622,502 662,187 964,189 928,593 218,926 296,399 855,585 1,919,125 2,082,965 410,604 2,053,063 1,482,664 2,993,285 438,836 6,493,779 911,376 553,280 694,311 897,990 2,027,532 1,874,792 760,244 1,872,234 5,162,840 1,846,051 200,325 1,117,107 1,078,519 574,147 370,804 287,692 598,420 206,686 106,831 446,561 1,220,945 758,004 1,349,398 1,816,110 90,459 3,070,835 789,369 2,409,492 944,193 297,075 1,008,863 1,574,962 $79,447,464 Revenue Performances $3,445 6,605 2,482 1,008 646 3,018 2,800 11,129 8,330 1,539 2,081 8,350 1,592 1,694 2,466 2,375 560 758 2,189 4,909 5,328 1,050 5,252 3,793 7,657 1,123 16,611 2,331 1,415 1,776 2,297 5,186 4,796 1,945 4,789 13,206 4,722 512 2,857 2,759 1,469 948 736 1,531 529 273 1,142 3,123 1,939 3,452 4,645 231 7,855 2,019 6,163 2,415 760 2,581 4,029 $203,221 241 239 240 88 238 238 239 240 240 233 237 239 240 239 241 234 149 241 241 240 240 237 239 239 239 240 239 241 239 241 240 239 238 241 241 241 240 184 239 240 226 217 202 238 20 89 238 241 240 241 241 17 240 155 212 239 164 104 133 12,731 County Fairs ST. JOHNS SONOITA APACHE COUNTY FAIR SANTA CRUZ COUNTY FAIR - Sub-Total TOTAL $32,543,425 - 5,854 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 25 6,434 13,302 - 19,736 $79,467,200 $203,221 4 2 6 12,737 TELETRACKING ACTIVITY - COUNTY FAIR MEETS FORT TUTHILL DOWNS YAVAPAI DOWNS (Coconino) (Yavapai) TURF PARADISE (La Paz, Maricopa, Navajo, Pinal, and Yuma) City AHWATUKEE APACHE JUNCTION APACHE JUNCTION BENSON BUCKEYE CASA GRANDE CAVE CREEK CHANDLER CHANDLER COTTONWOOD FLAGSTAFF GLENDALE GOODYEAR GREEN VALLEY KINGMAN LAKE HAVASU CITY MARANA NEW RIVER PARKER PAYSON PEORIA PEORIA PEORIA PHOENIX PHOENIX 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 SCOTTSDALE SEDONA SHOW LOW SIERRA VISTA SURPRISE SURPRISE TEMPE TEMPE TEMPE TEMPE TEMPE TEMPE TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON WICKENBERG YUMA YUMA TOTAL Site Handle PAYTON'S PLACE / BLEACHER'S APACHE GREYHOUND PARK ARIZONA JOE'S BIG BOY'S ARENA GRILL WADDEL'S CORRAL MCMASHER'S SPORTS BAR HAROLD'S RESTAURANT DIRTY DRUMMER STADIUM CLUB ZOOMER'S SPORTS BAR MUSEUM CLUB MAX'S SPORTS BAR ROMAN'S OASIS GREEN VALLEY LANES CERBAT HILLS GALLAGHER'S AGAIN OLD FATHER INN GAVILAN PEAK JULIO'S FAMOUS SAM'S GALLAGHER'S GRAND INN / RAMADA 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 GRILL GALLAGHER'S / CHEERLEADER'S GALLAGHER'S - 16TH STREET HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR RESTAURANT PADRE MURPHY'S ROMAN'S COUNTY LINE UNO MAS BAR & GRILL TURF PARADISE MATT'S SALOON ANTELOPE LANES YAVAPAI DOWNS QUARTZSITE YACHT CLUB ROCK SPRINGS CAFE CHALO'S LA CASA REYNOSO CASINO ARIZONA UPPER DECK SPORTS GRILL LOS ABRIGADOS RESRT RT'S BLACK BULL P.C.'S LOUNGE COYOTE ALLEY RUNNER'S SPORTS BAR BOSTON'S DERBY GRILL HORSE & HOUND-OFF BROADWAY SIX SHOOTER'S SKIP & JAN'S STRAY CAT AIRPORT INN ARIZONA ALE HOUSE FAMOUS SAM'S-EAST FAMOUS SAM'S-CENTRAL FAMOUS SAM'S-SOUTH GOLDEN PIN LANES JEFF'S PUB PUTNEY'S SPORTS BAR RILLITO PARK TOUCHDOWN'S TUCSON GREYHOUND PARK MECCA RESTAURANT FAMOUS SAM'S RON'S PLACE $44,107 60,728 16,406 2,328 6,602 27,025 29,262 138,424 90,064 13,599 26,487 82,953 18,907 825 23,213 37,749 67,724 25,294 9,719 12,753 22,721 49,658 45,644 15,086 71,637 38,727 86,685 7,808 83,258 25,176 5,790 24,750 4,345 54,010 32,561 11,020 52,060 124,580 62,411 34,497 30,538 29,920 34,404 4,472 11,599 19,365 83,060 11,100 2,489 36,054 33,181 20,296 25,195 29,089 26,132 73,120 7,028 37,772 40,308 8,602 16,209 11,530 14,567 5,545 43,749 36,780 1,320 37,763 56,028 9,799 49,720 6,816 $2,440,143 Performances Handle Performances 6 6 6 1 6 6 6 6 6 6 6 6 6 1 6 6 6 6 4 6 6 6 6 6 6 6 6 5 5 6 5 6 1 6 6 6 6 6 6 5 6 6 6 3 6 5 5 1 1 6 6 6 6 6 5 6 1 5 6 6 5 6 6 5 6 6 1 6 6 4 5 1 $19,102 52,675 14,648 5,072 9,598 12,108 79,122 50,272 6,912 17,552 71,298 14,218 12,469 13,327 18,745 15,076 5,361 12,094 13,242 28,890 35,591 3,337 34,758 37,854 68,136 4,127 75,922 11,921 5,612 7,731 3,867 36,712 16,074 13,735 31,673 89,415 23,956 44,432 17,472 13,262 4,499 8,936 10,708 68,551 16,349 19,757 7,421 18,583 9,578 39,517 64,480 35,424 14,836 6,876 7,379 4,764 9,895 6,720 21,734 22,170 23,550 47,855 3,167 22,581 - 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 3 4 4 4 4 4 4 4 4 4 4 4 3 4 4 4 3 4 4 4 4 4 4 4 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 2 4 - 374 $1,542,698 250 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 26 Handle Performances $151,772 324,929 97,045 49,874 31,227 127,552 167,384 575,358 360,188 83,095 98,121 393,155 91,787 67,908 127,698 98,474 45,249 35,269 116,615 183,830 211,663 32,073 247,272 159,305 321,031 45,648 699,479 87,258 42,509 93,799 80,059 200,767 149,836 52,866 188,827 528,670 189,006 18,903 115,069 103,050 92,923 72,353 26,329 72,277 24,729 118,542 99,163 127,517 182,177 316,327 122,429 241,797 78,168 15,812 44,239 437,900 $8,866,302 20 20 20 10 20 20 20 20 20 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 1 20 20 1,090 TELETRACKING ACTIVITY - GREYHOUND MEETS PHOENIX GREYHOUND PARK City APACHE JUNCTION CASA GRANDE CAVE CREEK CHANDLER CHANDLER CHANDLER GLENDALE GREEN VALLEY KINGMAN LITCHFIELD PARK MARANA PEORIA PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PHOENIX PRESCOTT SCOTTSDALE SIERRA VISTA SURPRISE TEMPE TEMPE TEMPE TEMPE TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON TUCSON YUMA YUMA TOTAL Site Handle TUCSON GREYHOUND PARK Revenue Performances APACHE GREYHOUND PARK $ MCMASHER'S SPORTS BAR CREEKERS GALLAGHER'S DIRTY DRUMMER STADIUM CLUB MAX'S SPORTS BAR GREEN VALLEY LANES DAMBAR & STEAKHOUSE LIGHTHOUSE RESTAURANT OLD FATHER INN GALLAGHER'S BIG DADDY'S BRENNAN'S GALLAGHER'S / CHEERLEADERS HAM'S RESTAURANT METRO SPORTS BAR NORTH STAR PADRE MURPHY'S PHOENIX GREYHOUND PARK PURPLE TURTLE PLAZA BOWL CASINO ARIZONA PC'S LOUNGE RUNNER'S SPORTS BAR BOSTON'S BAR & GRILLE HORSE & HOUND-OFF BROADWAY SIX SHOOTER'S 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 PUTNEY'S SPORTS BAR TOUCHDOWNS TUCSON GREYHOUND PARK RON'S PLACE YUMA GREYHOUND PARK 3,146,488 555,159 38,237 482,505 2,456,608 1,597,698 5,697,492 321 209,516 1,607,841 115,793 1,882,829 960,883 2,020,829 2,599,736 1,344,967 1,357,772 1,058,881 5,252,007 514,446 185,953 1,012,448 608,657 800,301 720,495 1,505,194 544,868 907,844 42,264 102,681 58,999 90,431 37,410 419,110 214,032 348,738 415,845 80,643 529,937 - 362 313 30 361 362 360 362 4 205 359 181 362 361 359 362 312 362 359 362 362 204 123 312 362 362 362 209 296 177 127 180 181 175 181 181 181 182 47 225 $ 41,525,858 - 10,167 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 27 Handle $ Revenue Performances 180,711 45,582 348,818 266,458 103,565 1,446,610 98,642 139,138 170,346 104,915 267,016 532,489 748,466 253,192 1,066,888 1,196,732 529,786 4,042,874 2,223,587 72,991 1,954,986 - - 153 79 153 201 153 363 153 152 153 152 153 153 362 127 363 363 360 362 363 42 362 - $ 15,793,792 - 4,722 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 2005 FY 2006 FY 2007 6,112 7 3,120 11 4,007 14 FY 2005 FY 2006 FY 2007 266 114 30 41 0 29 77 320 74 17 41 0 84 100 324 134 0 33 0 91 104 557 636 686 Number of licenses issued Number of licenses denied Stewards’ Rulings by Track Track Turf Paradise Yavapai Downs Rillito Park (no commercial racing in FY 2007) All County Fairs Apache Greyhound Park Phoenix Greyhound Park Tucson Greyhound Park Total 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 2005 FY 2006 FY 2007 Number of Stewards’ Rulings Amount of fines imposed Amount of fines collected 557 $54,661 $41,921 636 $54,018 $47,438 686 $58,542 $44,098 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 28 Racing Regulation Investigations The Department investigates all possible violations of racing laws and rules. Investigation numbers listed below reflect the total number of investigations conducted for every incident, inspection, and background investigation, which includes processing of fingerprints and any resulting false applications. A background investigation is conducted for each license applicant who submits fingerprints as required by Department policy. Performance Measures FY 2005 FY 2006 186 2,557 2,743 26% 379 1,758 2,137 29% 363 2,086 2,449 24% 21% 43% 16% 8% 25% 15% Number of incident investigations Number of background/license investigations conducted Total number of investigations Percentage of incident investigations resulting in disciplinary action Percentage of total investigations resulting in disciplinary action Percentage of background/license investigations resulting in disciplinary action FY 2007 Types of Investigations Offenses False application Disorderly conduct/assault Human drug -testing Animal drug testing Kennel inspection Whelping inspection Vehicle inspection License denial/ineligible Information only Total Total Referred No Violation 306 15 68 33 87 104 45 4 7 301 15 33 33 1 0 0 4 0 5 0 35 0 86 104 45 0 7 669 387 282 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 2005 Director’s hearings Administrative Law Judge hearings Racing Commission hearings Cases withdrawn/dismissed Total number of hearings Total number of Director’s orders** 217 1 2 2 220 293 FY 2006 916 * 10 7 2 933 1,093 * Includes 591 backlog hearings. ** Includes orders for action taken not requiring a hearing, i.e. stays, reinstatements, cases dismissed, etc. ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 29 FY 2007 315 19 11 2 345 416 Racing Regulation Drug/Alcohol Testing 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 2005 FY 2006 FY 2007 41 11 4 27% 0 0 0% 50 13 7 26% 8 8 100% 68 31 2 51% 2 2 100% 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 2005 FY 2006 FY 2007 37 1.3% 48 1.8% 33 1.3% 5 .10% 0 .00% 0 .00% 42 0.53% 48 0.63% 33 0.44% ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 30 LICENSE BY CATEGORY HORSES ARIZONA DEPARTMENT OF RACING FY 2007 AN NNUAL 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 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 0 115 0 3 1 8 2 121 0 0 2 57 0 222 8 36 7 0 0 269 0 10 31 2 623 70 0 0 10 31 0 26 48 14 21 10 4 63 5 11 2 0 1,832 966 $28,514 $27,937 $56,451 YAVAPAI DOWNS 0 0 0 0 42 0 3 9 0 1 31 0 0 0 39 0 58 3 12 1 0 0 155 0 12 2 4 390 90 0 6 10 32 0 9 8 22 1 0 0 43 3 6 4 0 996 413 $29,530 $11,977 $41,507 COUNTY FAIR 0 5 0 0 59 2 0 1 0 0 2 0 0 0 12 0 59 2 9 1 0 0 72 0 4 0 1 161 57 0 5 5 23 0 22 2 2 2 0 0 24 3 8 1 0 544 254 $12,710 $7,366 $20,076 GREYHOUNDS RILLITO PARK 0 0 0 0 3 0 0 2 0 0 0 0 0 0 3 0 26 0 1 0 0 0 24 0 3 0 0 36 3 0 0 0 4 0 8 1 0 0 0 0 3 0 1 0 0 118 79 $947 $2,286 $3,233 TOTAL 0 5 0 0 219 2 6 13 8 3 154 0 0 2 111 0 365 13 58 9 0 0 520 0 29 33 7 1,210 220 0 11 25 90 0 65 59 38 24 10 4 133 11 26 7 0 3,490 1,712 $71,701 $49,566 $121,267 PHOENIX 0 0 0 15 48 0 0 0 4 0 3 0 0 0 0 0 0 1 0 0 4 1 81 0 5 25 0 35 0 36 1 0 0 0 14 0 0 0 0 0 3 0 11 0 0 287 235 $3,265 $6,467 $9,732 TUCSON 0 0 0 17 55 0 0 0 8 0 5 0 0 0 0 0 0 0 0 0 1 0 26 0 8 9 0 24 0 67 0 0 0 0 6 0 0 0 0 0 10 0 0 0 0 236 139 $2,365 $4,031 $6,396 RBO TOTAL 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7 0 0 0 0 0 0 0 0 0 0 0 8 0 $300 $0 $300 0 0 0 32 103 0 0 0 12 0 8 1 0 0 0 0 0 1 0 0 5 1 107 0 13 34 0 59 0 103 1 0 0 7 20 0 0 0 0 0 13 0 11 0 0 531 374 $5,930 $10,498 $16,428 GRAND TOTAL 0 5 0 32 322 2 6 13 20 3 162 1 0 2 111 0 365 14 58 9 5 1 627 0 42 67 7 1,269 220 103 12 25 90 7 85 59 38 24 10 4 146 11 37 7 0 4,021 2,086 $77,631 $60,064 $137,695 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 2007, the Department collected $24,731 in taxes generated from 19 boxing events in the State. The State Boxing Commission issued 791 licenses, and the Department collected a total of $11,595 in license fees from these applicants. Additionally, the State Boxing Commission entered into intergovernmental agreements with two 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 2007, the Boxing Commission regulated 11 of these events and collected $33,000 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. The Commission was authorized to approve up to 30 events in FY 2007. Performance Measures FY 2005 FY 2006 FY 2007 100% 40 200 100% 35 280 100% 30 240 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 2005 FY 2006 FY 2007 651 98% 792 99% 791 99% Revenue Summary Taxes License Fees Fines Other (Tribal Agreements) $62,822 10,080 1,700 21,000 $39,948 10,980 1,400 24,000 $24,731 11,595 1,200 33,000 Total Revenue Collected $95,602 $76,328 $67,526 Performance Measures Number of licenses issued Percent of licenses issued for all applications ARIZONA DEPARTMENT OF RACING FY 2007 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 2005 FY 2006 FY 2007 6 33% 13 98% 8 99% Number of investigations conducted Percent of investigations resulting in disciplinary action ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 33 Financial Issues ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT Department Of Racing Budget The Department of Racing’s expenditures for the last three fiscal years, the appropriated funds for FY 2008 and FY 2009, 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 2007 was $3,095,700. This represents an increase of $143,900, or 4.9%, from the prior budget period, mainly because of 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 88.9% of the Department’s FY 2007 budget was appropriated from the State General Fund. OPERATING BUDGET Full Time Equivalent Positions (FTE) Actual Exp Actual Exp Actual Exp Appropriation Appropriation FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 46.5 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 $1,686,092 $1,768,713 $1,829,900 $1,949,700 $1,899,800 Employee Related Expenses (ERE) 498,555 471,583 580,700 596,600 563,700 Professional & Outside Services 330,557 239,900 231,200 271,700 271,700 Travel - In State 165,147 156,863 185,400 115,500 115,500 Travel - Out of State Other Operating Equipment AGENCY TOTAL 3,851 5,424 8,300 4,100 4,100 246,096 292,896 297,300 414,500 394,100 92,606 16,421 9,400 16,000 16,000 $2,942,900 $2,951,800 $3,093,600 $3,368,100 $3,264,900 $2,504,796 $2,606,800 $2,749,100 $2,851,100 $2,750,700 360,969 300,000 299,700 450,000 450,000 77,135 45,000 44,800 67,000 67,000 438,104 $2,942,900 345,000 $2,951,800 344,500 $3,093,600 517,000 $3,368,100 517,000 $3,264,900 FUND SOURCES General Fund Other Appropriated Funds County Fair Racing Fund Administration of Betterment & Breeders' Awards Fund SUBTOTAL AGENCY TOTAL ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 34 Department Budget 3,368,100 3,400,000 3,264,900 3,300,000 3,200,000 3,095,700 3,100,000 2,951,800 3,000,000 2,942,900 2,900,000 2,800,000 2,700,000 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 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 Annual Maximum 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% $1,800,000 1,200,000 1,200,000 400,000 450,000 60,000 67,000 N/A Total Maximum Funding Allowed 100% $5,177,000 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 35 Revenues from pari-mutuel taxes decreased in FY 2007. They decreased 18.3% or $96,359 when compared to FY 2006. Several tax breaks have been provided to the racing industry since 1995. The tax breaks listed below contribute, in part, to the reduction in pari-mutuel 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 derived from the Arizona Department of Revenue transfer of unclaimed property funds to the Department of Racing. During FY 2007, the transfer was for $14.9 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 $9.9 million in FY 2007, from the Department of Racing’s portion of unclaimed property dollars. 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 2007 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 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 FY 2007 $10,177,419 1,200,000 1,200,000 1,800,000 400,000 450,000 45,000 40,000 72,508 N/A 75 $7,314,937 45,000 40,000 82,006 N/A 150 $8,308,047 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 67,000 60,000 154,034 3,200 200 $15,511,853 Distribution of Department of Racing Revenues FY 2007 General Fund 63.7% Agricultural Consulting/Training Fund 1.0% Breeders' Award Fund 7.9% Greyhound Adoption Fund 0.0% Horse Adoption 0.0% County Fairs Racing Betterment Fund 7.9% Stallion Award Fund 0.4% Agriculture Promotion Fund 11.8% Administration of Betterment & Breeders' Awards Fund 0.4% County Fair Racing Fund 2.9% Exposition and State Fair Fund 3.9% Total Department Revenues by Fiscal Year General Fund Revenues by Fiscal Year $15,511,853 $16,000,000 $12,000,000 $14,000,000 $10,000,000 $12,000,000 $10,173,260 $6,485,360 $8,000,000 $9,490,499 $8,308,047 $10,000,000 $8,000,000 $10,177,419 $5,807,008 $7,314,937 $6,000,000 $6,000,000 $4,640,891 $3,657,354 $4,000,000 $4,000,000 $2,000,000 $2,000,000 $0 $0 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2003 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 37 FY 2004 FY 2005 FY 2006 FY 2007 Department of Racing Revenues by Category FY 2003 State Unclaimed Property Pari-Mutuel Tax License Fees Fines Boxing Tax Other Total FY 2004 FY 2005 FY 2006 FY 2007 $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 $14,899,237 431,437 82,856 45,870 24,730 27,723 $7,314,937 $8,308,047 $9,490,499 $10,173,260 $15,511,853 Department of Racing Revenues by Category FY 2007 State Unclaimed Property 92.9% Pari-Mutuel Tax 5.2% Other 0.3% State Unclaimed Property Transfers by Fiscal Year Pari-Mutuel Tax Revenue by Fiscal Year $700,000 $14,899,237 $16,000,000 $628,564 $565,191 $600,000 License Fees 0.7% Fines 0.5% Boxing Tax 0.4% $14,000,000 $527,860 $483,901 $12,000,000 $500,000 $9,453,500 $431,437 $8,706,424 $10,000,000 $7,530,279 $400,000 $8,000,000 $300,000 $6,527,513 $6,000,000 $200,000 $4,000,000 $100,000 $2,000,000 $0 $0 2003 2004 2005 2006 2003 2007 ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 38 2004 2005 2006 2007 FY 2007 Appropriated and Non-Appropriated Funds DESCRIPTION OF FUNDS FY 2006 FY 2007 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 $450,000). Purpose of Fund: For the administration of county fair racing. FUNDS SPENT $299,875 $299,700 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 $67,000). Purpose of Fund: To administer the Arizona County Fairs Racing Betterment program, the Arizona Breeders' Award program, the Arizona Stallion Awards program, and the Retired Greyhound and Racehorse Adoption program. FUNDS SPENT $44,996 $44,800 Arizona Breeders Awards (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 $1.2 million). Purpose of Fund: To encourage the breeding industry in Arizona by awarding breeders of winning racehorses and greyhounds in this state. FUNDS SPENT $808,389 $983,700 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 $1.2 million). Purpose of Fund: To promote county fair racing by providing a grant to each eligible county fair association that conducts a racing meeting. FUNDS SPENT $826,561 $1,113,400 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 $1,534 $0 Retired Racehorse 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 racehorses. FUNDS SPENT $2,500 $1,890 $37,374 $43,100 Stallion Awards (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 $60,000). Purpose of Fund: To encourage the breeding industry in Arizona by awarding owners or lessees of stallion horses in this state. FUNDS SPENT ARIZONA DEPARTMENT OF RACING FY 2007 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 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 0 -100.00% 0 0 0 219,826 219,826 Turf Paradise FY 1994 101,467,993 Yavapai Downs FY 1994 131,539,593 29.64% 540,218 0 0 0 0 17,490,826 36,331,261 107.72% 116,191 0 0 0 0 FY 1990 $12,262,396 $4,523,398 -63.11% $0 $0 $0 $360,850 $360,850 52,818,827 -44.80% 1,971,582 883,260 2,649,781 2,391,189 5,040,970 21,976,171 -42.34% 328,818 139,206 417,619 2,111,648 2,529,267 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 0 -100.00% 0 0 0 219,826 219,826 Turf Paradise FY 1994 101,467,993 Yavapai Downs FY 1994 134,828,083 32.88% 553,724 0 0 0 0 17,490,826 38,147,824 118.10% 122,000 0 0 0 0 FY 1990 $12,262,396 $4,636,483 -62.19% $0 $0 $0 $360,850 $360,850 51,762,450 -45.90% 1,935,150 886,926 2,660,778 3,108,820 5,769,598 22,525,575 -40.89% 337,038 137,828 413,483 2,192,229 2,605,712 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 2011 Estimated Pari-Mutuel Tax and Hardship Tax Credit TRACK ESTIMATED ESTIMATED ESTIMATED TAX DUE ESTIMATED BASE BASE YEAR FY 2010 AMOUNT FY 2010 % PARI-MUTUEL BASED ON FY 2011 YEAR AMOUNT WAGERED DECREASE TAX DUE CARRYOVER FY 2011 FROM FY 2010 TAX CREDIT WITH % DECREASE HARDSHIP CREDIT HARDSHIP TAX FY 2010 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 0 -100.00% 0 0 0 219,826 219,826 Turf Paradise FY 1994 101,467,993 Yavapai Downs FY 1994 138,198,785 36.20% 567,567 0 0 0 0 17,490,826 40,055,215 129.01% 128,100 0 0 0 0 FY 1990 $12,262,396 $4,752,395 -61.24% $0 $0 $0 $360,850 $360,850 50,727,201 -46.99% 1,893,507 889,674 2,669,022 3,876,091 6,545,113 23,088,715 -39.42% 345,464 136,169 408,506 2,260,248 2,668,754 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 ________________________________________________________________ ARIZONA DEPARTMENT OF RACING FY 2007 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 2008 Hardship Tax Credit Based on the FY 2007 Dollars Wagered FY 2007 TRACK FY 2007 FY 2007 TAX DUE FY 2008 BASE BASE YEAR AMOUNT % PARI-MUTUEL BASED ON HARDSHIP YEAR AMOUNT WAGERED DECREASE TAX DUE % DECREASE TAX CREDIT CARRYOVER FY 2008 FROM FY 2007 TAX CREDIT WITH 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 0 -100.00% 0 0 0 165,088 219,826 Turf Paradise FY 1994 26.47% 527,042 0 0 0 0 Yavapai Downs FY 1994 17,490,826 97.82% 110,658 0 0 0 0 $0 101,467,993 128,331,310 34,601,201 GREYHOUND TRACKS: Apache Greyhound Park FY 1990 $12,262,396 $4,413,071 -64.01% $0 Phoenix Greyhound Park FY 1990 49,391,582 55,598,765 -41.89% 2,075,349 FY 1994 46,293,967 FY 1990 38,110,346 21,440,167 -43.74% 320,798 Tucson Greyhound Park $0 $360,850 $360,850 869,453 2,608,358 1,815,059 4,423,417 140,323 2,011,477 2,432,446 420,969 Department of Racing Pari-Mutuel Tax Revenue - FY 2007 TRACK ALLOWABLE FY 2007 FY 2007 HARDSHIP CREDITS HANDLE PARI-MUTUEL TAX DUE $0 $0 $0 $0 $0 431,437 IN FY 2007 FY 2007 CAPITAL FY 2007 FY2007 FY 2007 FY 2007 IMPROVEMENT HARDSHIP COUNTY FAIR CHARITY PARI-MUTUEL TAX WITHHOLDINGS TAX CREDIT CREDITS DAYS REVENUE HORSE TRACKS: Rillito Park $219,826 $0 $0 Turf Paradise 0 128,331,310 527,042 0 0 82,862 12,743 Yavapai Downs 0 34,601,201 110,658 100,917 0 9,741 0 0 $219,826 $162,932,511 $637,700 $100,917 $0 $92,603 $12,743 $431,437 Subtotal Horse Tracks GREYHOUND TRACKS: Apache Greyhound Park $360,850 $4,413,071 $0 $0 $0 $0 $0 $0 Phoenix Greyhound Park 3,847,287 55,598,765 2,075,349 0 2,032,228 0 43,121 0 Tucson Greyhound Park 2,332,275 21,440,167 320,798 0 320,798 0 0 0 Subtotal Greyhound Tracks $6,540,412 $81,452,003 $2,396,147 $0 $2,453,197 $0 $43,121 $0 GRAND TOTAL $6,760,238 $234,384,514 $3,033,847 $100,917 $2,453,197 $92,603 $55,864 $431,437 ARIZONA DEPARTMENT OF RACING FY 2007 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 2007. 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 2007 Deducted $52,196,636 $100,917 $0 $0 $576,317 $51,620,319 $0 $0 This table excludes permittees that have used all approved capital improvements dollars. ARIZONA DEPARTMENT OF RACING FY 2007 ANNUAL REPORT 42 Remaining Dollars Approved