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Wednesday, June 22, 2016

New England HBPA Files Lawsuit to Protect Horsemen’s Rights

(from New England HBPA press release)

The New England Horsemen’s Benevolent and Protective Association Inc. (“NEHBPA”) has commenced litigation in the United States District Court in Massachusetts against Middleborough Agricultural Society (“MAS”) and the Massachusetts Thoroughbred Horsemen’s Association Inc. (“MTHA”) seeking to protect the rights of owners and trainers of Thoroughbred horses in the Commonwealth of Massachusetts and to advance the possibility that live racing will actually be conducted at the Brockton Fairgrounds.

The NEHBPA filed the litigation at this time because it believes the MTHA entered into an illegal Purse Agreement with MAS in order to position itself to receive a portion of the Race Horse Development Fund (RHDF) benefit funding. In the litigation, the NEHBPA seeks orders of court recognizing the NEHBPA as the representative of local horsemen, voiding the purse agreement between the MTHA and MAS, and requiring MAS to negotiate with the NEHBPA as to the protection and advancement of the interest of horsemen. These interests include addressing safety issues, voiding the blanket release granted MAS by the MTHA of all liability it otherwise might have under applicable laws, and negotiation of payment to the purse account of a fair share of the revenue that will be generated.

Efforts of the NEHBPA to advance racing at the Brockton Fairgrounds
When George Carney first announced the intent to conduct Thoroughbred racing at the Brockton Fairgrounds, the NEHBPA proceeded to contact him and seek to work with him to advance the possibility of a safe and successful meet. The NEHBPA continued its efforts to work with Mr. Carney during the months the concept of a meet was discussed but little (if anything) was being done, creating the appearance that the announcements may have been made for the purpose of advancing the application for a gaming license for the Brockton site.

The litigation was filed after MAS refused to deal with the NEHBPA, declining the NEHBPA offer to help address safety and other issues of interest to local horsemen and refusing the NEHBPA offer to recruit horsemen to race at the proposed meet. MAS, instead of negotiating with the NEHBPA (who for decades has been the acknowledged representative of horsemen in New England), entered into a Purse Contract with the MTHA relative to Thoroughbred racing at the Brockton Fairgrounds and possible other locations during the calendar years 2016 and 2017.

Purse Agreement signed by the MTHA
The litigation filed by the NEHPBA alleges that in the Purse Agreement between the MTHA and MAS, MTHA contracted against the best interests of local horsemen by giving away all simulcasting rights and horse racing revenue to MAS without requiring that a fair and reasonable portion of such revenue be paid to the purse account and by otherwise failing to advance the best interests of local horsemen. Under the purse agreement that was signed by the MTHA with MAS, all revenue is retained by MAS with no payments to purse account. As further alleged in the complaint, the purse contract signed by the MTHA provides a 10% kickback to MAS of the funding provided by the RHDF for purses and further gives a waiver of all liability and indemnification to MAS by all horsemen. The complaint basically alleges that the MTHA utterly failed to represent the interest of local horsemen and signed the contract to position the MTHA to receive benefit funding from the RHDF.

The litigation alleges that local horsemen receive no benefits from the Purse Agreement between the MTHA and MAS because under that agreement the MTHA gave away to MAS all revenue sources for purses (other than funding from the RHDF established by the Legislature). The complaint alleges that the contract signed by the MTHA provides a "kickback" to MAS of 10% of the RHDF purse funding in order to advance MTHA objectives at the expense of the horsemen it purported to represent. The RHDF was created by state law in the legislation authorizing casinos and a slot parlor and is intended by statute to supplement other statutory and non-statutory sources of purse funding.

The complaint alleges that a "reading of the entire contract suggests there was absolutely no bargaining or advocacy by MTHA on behalf of the horsemen. The MTHA, through the actions of an un-elected president, appears to have simply permitted the MAS to draft a contract as desired by the MAS and signed it".

The litigation further alleges that George Carney of MAS is also the principal owner and chief executive officer of the Raynham Park Facility in Raynham that failed to pay approximately $300,000 in statutorily required premiums for 2014 and 2015 to the purse account of local horsemen at Suffolk Downs. The complaint alleges Carney refused to negotiate with the NEHBPA because the unpaid premiums would be addressed in such negotiations.

Massachusetts Gaming Commission Conditional Approval
The Massachusetts Gaming Commission imposed certain conditions on its approval of the racing at the Brockton Fairgrounds including a safety inspection of the track and appropriate insurance. The NEHBPA does not believe either of these conditions will be met without the assistance of the NEHBPA. MAS continues to reject overtures from the NEHBPA to work together so that a safe meet can be conducted. The litigation seeks to require MAS to negotiate with the NEHBPA on these and other issues of interest to horsemen.

WHO IS THE MTHA?
The litigation asserts that the MTHA is a newly formed organization consisting of a few disgruntled members of the NEHBPA. It alleges that the MTHA has had no elections and adopted no rules governing the organization and that its officers are self-appointed. It alleges that few, if any, horsemen (as that term is defined by the Federal Interstate Horse Racing Act) have consented to be governed by the MTHA. The litigation alleges that the MTHA does not represent any significant number of horsemen and has no legal authority to negotiate for horsemen or enter into a purse agreement with MAS.

Brockton Stall Applications

The New England HBPA has also released a statement regarding stall applications for the proposed meet at the Brockton Fairgrounds. For more information, go to www.newenglandhbpa.com.

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