FQHRA Files Suit Against Hialeah

FQHRA has field a counterclaim against Hialeah management company.

FQHRA Press Release

The Florida Quarter Horse Racing Association (FQHRA) has once again stepped up to protect interests of horsemen racing at Hialeah Park in South Florida. FQHRA filed a counterclaim on Friday (Jan 9) against Hialeah Park's management company South Florida Racing Association, LLC (SFRA) for breach of contract.

On December 24 Hialeah Park unilaterally established it's own "Horsemen's Purse" voiding a $560,000 deposit into the FQHRA's Horsemen's account, violating the current contract between the track and the FQHRA. As well it has refused to pay a portion of the purse funds to the association for administration of the account.

According to documents filed in the suit, as late as May 7, 2014 Hialeah Park's General Manager Randy Soth sent a purse analysis spreadsheet to the FQHRA that included the contractual allotment to the FQHRA under the terms of the purse contract. SFRA leaders John Brunetti, Sr. and John Brunetti, Jr. had approved the document.

"Despite John Brunetti (owner of Hialeah Park) and the lawyers that tried to loophole illegitimate horse racing in the state in 2011 and 2012, I believe Florida is on the brink of stepping up to the next level in Quarter Horse racing," Dr. Stephen Fisch, FQHRA President said this week. "Sometimes a major confrontation is a good thing and is needed for growth. I think that is where we are today."

The only reason these track owners and groups' keep attacking legitimate horsemen's groups is because they want to control the horsemen's group and therefore control purses and conditions of the races. Allowing that to happen would set a bad precedent for both American Quarter Horse racing and Thoroughbred racing. The main economic driver of both industries is the breeding industry. Without legitimate racing opportunities the racing states lose billions of dollars of economic impact that are the result of legitimate horse racing and breeding.

According to Fisch horsemen should not be scared of racing at Hialeah or in Florida because of this confrontation.

"That would only feed into what SFRA wants. Short fields will give them fodder to say that AQHA and FQHRA can not provide a product to do their part of a Racino deal, despite the fact that SFRA would be the cause of the short fields," Fisch said.

In 2012/2014 the association successfully defended a lawsuit where Quarter Horse permit holders in the state tried to use illegitimate pari-mutuel events as a form of pari-mutuel racing to gain permits for casinostyle
poker and slot machines.

"To some this may seem like another dark hour for Quarter Horse racing and horse racing in general. I do not believe so. I believe we were due for a good house cleaning here in Florida and that is exactly what is about to happen," Fisch says.

Florida bred accreditations continue to rise which means AQHA registration numbers and everything associated with them go up. Demand created by any state’s racing, including Florida's American Quarter Horse racing, also creates more demand at the sale ring.

History
Hialeah Park has long struggled to return to its former glory as a premier racetrack. After experiencing financial difficulties for nearly half-a-century the South Florida landmark was forced to close it doors after ending Thoroughbred racing in 2001 while on the brink of economic collapse.

In 2009 Hialeah Park obtained a Quarter Horse racing permit with the intent of opening a profitable casino and lucrative poker rooms and slot machines. A pari-mutuel permit is a condition under Florida law to permit casino-style poker and slot machines. The FQHRA was a key player in the Hialeah Park's approval for the new casino. The association lobbied the Florida Legislature in 2009 and 2010 to promote the casino at Hialeah Park when members of the Florida Senate have voiced opposition to the proposal. If it had not been for the FQHRA, AQHA and Quarter Horse men and women working to secure the approval there would not be a Hialeah Park Casino.

Background
Horsemen (thus the FQHRA) have important bargaining and consent rights under Federal and Florida law, including the Interstate Horseracing Act of 1978 and Florida's Pari-mutuel Statutes. This statue requires the FQHRA's consent to intra-state simulcasting, poker and slot-machine gambling. Failure to comply with the those laws results in illegal gambling, which is a criminal offense in the state. The FQHRA serves as the labor union with which SFRA must bargain, under an agreement that was signed by he horsemen group and track officials prior to the inaugural Hialeah Park Quarter Horse meet in 2009.

Partnership
During the first year of the partnership SFRA tried to use strong-arm tactics against the FQHRA, it's members and horsemen. The association was forced to threaten litigation to get the track's Management Company to pay $290,750 in overdue purses. As a result of the SFRA's breach of the 2009 Purse Contract they executed two new Memoranda of Agreements giving the FQHRA management of the purse account through June 30, 2016. As the racetrack built its new casino the partnership enjoyed relative peace and cooperation through early 2012. A dispute arose near the end of the 2012-2013 meet when SFRA took control over the Horsemen's purses, again in violation of the purse contract. According to documents filed Hialeah Park management insisted the horsemen be paid before post-race tests could be returned from the lab, thus creating circumstances where horsemen were paid and left the state before positive test results were returned on their horses, refusing FQHRA's demand to repay the purses. SFRA showed no concern over the unsavory circumstances and continued to insist the premature payments be paid to the detriment of legitimate horsemen. These Hialeah Park activities occurred after the Hialeah Park Casino opened in 2013. When SFRA seized management of the purse account, the final three weeks of the 2012-2013 meet, poor accounting methods by the track showed incorrect payments to horsemen and incorrect 1099 tax form filings.

"In my opinion if Hialeah management had proven trustworthy in the past we would not have a problem with them handling the account," Dr. Fisch said. "However our contract says FQHRA handles the horsemen’s bookkeeper account and I believe the current scheme is just one way for Hialeah management to manipulate the horsemen."

"If we had not handled the account last year, probably no one would know the races were written for $230,000 less than they should have been," he continued. "We have tried for years to operate peacefully and cooperatively and those methods have failed to work. Therefore I believe we have to go on the offensive," Fisch said.

Brunetti and Quarter Horse Racing
Throughout the partnership SFRA has been dismissive of Quarter Horse racing. In a 2014 article published in The New York Times, SFRA Chairman John Brunetti is quoted as describing Quarter Horse racing as a "minor league attraction".

He is disdainful of the product that has made Hialeah Park tens of millions of dollars in gambling revenue saying "I don't follow Quarter Horse racing. It lasts 21 seconds. What can you strategize? What can you describe? What can you learn?"

Public records from the State of Florida's Division of Pari-Mutuel Wagering show the financial boon that Quarter Horse racing has provided Hialeah Park. From July 2014 thru December 2014 the track enjoyed net slot revenues of at least $28 million dollars and $6.9 million in gross receipts from its poker rooms.

In July of 2014 Hialeah Park announced it would fund a $60 million expansion and enhancement of it's Poker Room, renovations of it's outdoor entertainment venue known as the "Fountain Terrace" and the addition of 235 state-of-the-art slot and gaming machines. The press release also quoted Brunetti, Sr. reiterating the tracks goal was to see Thoroughbred horse racing return to his historic venue. He made this statement despite the face that SFRA lost a September 2013 lawsuit and its appeal against the State of Florida DBPR in an attempt to get his old SFRA Thoroughbred permit reenacted. He was told that permit was no longer available and does not exist.

Florida law also states that a new Thoroughbred permit cannot be obtained within 100 air miles of an
existing Thoroughbred permit. Gulfstream and Calder are just a few miles from Hialeah Park. Gulfstream currently has year round Thoroughbred racing.

The press release made no mention of the Quarter Horse racing which had given Brunetti's company the means for such an expansion.

In coming arbitration meetings FQHRA is expected to demonstrate to DBPR that Hialeah has breached its contract with FQHRA and hence put their slots permit/license in jeopardy.

"FQHRA has done everything we agreed to do in the agreement. We expect SFRA and its owner John Brunetti, Sr. to do the same," Fisch says.

"Everyone needs to know that we play by the rules and we expect them to play by the rules. Our track partners need to be put on notice that the horsemen intend to be treated fairly. Just as the illegitimate parimutuel events lawsuit let it be known that AQHA racing is AQHA racing in Florida and elsewhere. This suit will let it be known that a partnership is a two way street in all states and will end up being good for legitimate American Quarter Horse and Thoroughbred racing," Fisch concluded.

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