Audit: Idaho Racing Commission Broke Law Distributing Funds

New legislation will be proposed during the 2017 session to correct the situation.

Associated Press

A state audit says that the Idaho Racing Commission broke the law when it distributed historical racing funds to state breed associations.

The Idaho Racing Commission broke the law when it distributed funds collected from now-defunct historical horse racing betting terminals, state auditors said.

Legislative auditors said in a report released Tuesday that the commission gave two horse breeder associations about $286,000 in late 2015. However, the commission was supposed to give nearly $72,000 of that money to public schools.

Furthermore, the commission did not have authority at the time to distribute the money, the auditors wrote in the report. That's because the law legalizing historical horse racing had been repealed earlier that year, which stripped the commission of its authority to distribute the funds, they said.

Commission officials say they have reached out to the attorney general's office for guidance and plan on asking the breeder associations for their money back. In their statement to auditors, the commissioners did not address why the public school distribution was placed into the breeders' accounts.

Known as historical horse racing, the machines allowed bettors to place wages on prior horse races with no identifiable information. The betting terminals resembled slot machines, which are illegal in Idaho, because of their flashing lights and animations. Roughly 250 terminals were installed when the law passed three years ago in three out of Idaho's eight racetracks.

Before the repeal, state law directed the commission to distribute historical horse racing receipts into five different accounts, including the breed associations, public school funds and the Idaho Horse Council Youth Programs Account.

In 2014, the commission was supposed to direct $72,339 to public schools, but held off because it was still waiting for information from the historical horse racing manufacturer on how to divide money into the breeder associations.

By the time the commission received the information in 2015, the fight over the legality of historical horse racing was in full force. The commission eventually distributed $286,628 between the quarter horse and thoroughbred breeders associations after the repeal.

Now, the commission is currently sitting on $143,314 that is slotted for the Idaho Horse Council Youth Programs Account, but can't distribute the funds because it has no spending authority.

Idaho lawmakers were given the opportunity to return spending authority to the racing commission during this year's legislative session, but the original language was changed and it inadvertently removed the appropriation language.

According to the commissioners' statement, new legislation will be proposed during the 2017 session to correct the situation.

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