2 December 2007

Canadian Pari Mutuel Agency's Proposed Changes & NFL Picks

Comprehensive Regulatory Framework Review
Fall 2007 Information Sessions

Last year, the Canadian Pari-Mutuel Agency (CPMA) initiated a comprehensive review of the regulatory framework by which betting on horseraces is conducted in Canada. The review is being conducted consistent with the Government of Canada's regulatory policy, such that the objective is to ensure a regulatory model that provides for the most modern, efficient, and effective approach to protecting the betting public.

Consultation on the review was initiated at a series of regionally-scheduled information sessions held across Canada during the spring of 2006. At this time, a Discussion Document, was made available, which explained the reasoning and objectives for undertaking a comprehensive review. The document presented a list of issues identified for consideration, and encouraged readers to share their views on these and other issues. The CPMA received written responses from a wide range of interested stakeholders.

The review has been further informed by examining the operation and rules of select international regulatory bodies. Their regulatory models were examined to ensure that this review benefitted from consideration of the widest range of regulatory approaches.

CPMA officials have also been consulting closely with their provincial counterparts, and have further benefited from input received from CPMA staff.

Having benefited from these broad-based consultations, the CPMA is presenting this package of changes that describe the Government of Canada's proposed approach to regulating pari-mutuel betting on horse races. While this package represents a significant change in many of the specific requirements attached to conducting pari-mutuel betting, the mandate of protecting the betting public remains constant.

The specific proposals for regulatory change contained in this package generally support four key themes:

Overly prescriptive requirements will be relaxed, and racetracks will be permitted to explore alternative means of fulfilling regulatory objectives, without threat of compromising the protection of the betting public.
Focussing on Core Mandate

Regulation of the Canadian horse racing industry is a shared responsibility, and the goal is to ensure complementary, rather than competing or overlapping, regulatory oversight of the horse-racing sector. Identifying and focussing on elements of the regulatory framework that advance the federal government's mandate will allow the CPMA to direct its efforts toward activities that best serve to advance the integrity of pari-mutuel betting.

A number of initiatives related to the policies and practices of the CPMA will be advanced, and will make the CPMA more accessible, understandable and responsive to the industry it regulates. Other changes proposed will promote a fully transparent and accountable pari-mutuel model.
Clarification and Standardization

Updates to the regulatory framework will ensure modern and clear requirements that provide for a well-understood and consistently enforced set of rules. In this regard, a number of regulations no longer relevant to the current regulatory landscape will be removed, while others will be updated accordingly.
Your Input

This package is being presented for the purpose of providing a final opportunity to comment on the intended directions identified for modernizing the regulatory framework.

The proposed changes have been grouped into sections specific to particular aspects of pari-mutuel regulation. Each section is prefaced with a descriptive paragraph summarizing the main goals being promoted, followed by a listing of the details of the more substantive changes. The CPMA is interested in receiving your comments respecting how the proposed changes are consistent with forwarding the expressed objectives of the regulatory review.
Proposed Changes
Betting Permit

A number of changes will affect the manner by which an application for a Betting Permit is processed. The goal of these proposed changes is to clarify the requirements and procedures for issuance of Permits to Conduct Pari-Mutuel Betting, especially with regards to the appropriate identification of “associations” (i.e., for the purposes of conducting pari-mutuel betting on horse races). The principal changes are as follows:

* All associations applying for a Permit to Conduct Pari-mutuel Betting for 10 or more days will be required to submit the following:
o Provincial Commission-issued licence;
o Provincial Commission-approved race dates; and,
o Evidence of an agreement addressing the sharing of revenue, with a horsemen's group approved by the relevant Provincial Commission.
* Applications will need to be complete at time of submission, and received no less than 30 days prior to the first planned day of betting.
* Betting Permit applicants will be required to submit for approval a description of:
o How betting and race information will be displayed throughout their betting venues;
o Policies regarding Ticket Cashing and Cancelling, as well as how and where claims may be made for winning bets;
o The process by which all money owed to the betting public (e.g., underpayments, overages) is returned; and
o A communications plan that ensures the ability of CPMA officers to remain in contact with Stewards/Judges, Mutuel Department (including tote-room), and test-barn.
* Requirement to provide proposed race dates for the two years subsequent to the year of the applicable Betting Permit will be removed.
* Provisions restricting the conduct of pari-mutuel betting at new racecourses located within 80 kilometres of existing racecourses will be removed.

Simulcasting Approvals

The requirements for commingling betting pools (i.e., simulcasting) on Canadian and foreign-hosted races will be revised to more clearly reflect the relevant considerations of the current environment. Regulations will be revised to reduce the regulatory burden for conducting simulcast betting.

Regulations requiring live video display of each simulcast race will be removed. They will no longer be necessary in order to conduct betting on a race. Other principal changes are as follows:

* Establishing the authority of the Executive Director (rather than an “officer”) to authorize the conduct of inter-track betting.
* Clarifying that approvals may be amended, suspended or cancelled by the Executive Director, in instances of non-compliance.

Foreign Race Inter-track and Foreign Race Separate Pool Betting

Regulatory requirements for associations conducting betting on foreign races will be revised to address where foreign host rules may conflict with the rules usually applicable to Canadian pool hosts.

Key areas include:

* identifying currency exchange rates,
* the treatment of entries and mutuel fields as betting interests;
* the refunding provisions for bets and pools;
* the operation of bet types, including the process by which a winning bet is determined;
* the calculation of and responsibility for addressing over- and under-payments of payout prices;
* minimum pay-out prices; and
* procedures for when the race host posts an incorrect pay-out price.

Regulations will be introduced that allow Canadian associations to harmonize breakage rules with the foreign organization operating the betting pool. Requirements for associations to inform the betting public of the applicable breakage rules will be introduced.
Information Displayed to the Public

The long-standing model describing how associations present betting information to the public will be redesigned to focus more on what information is required, rather than how it is provided. Consistent with the objective of providing greater regulatory flexibility, the regulations will no longer prescribe the use of specific mechanisms such as infield boards and notices. The CPMA will retain authority for approving how betting and racing information is displayed. The principal changes are as follows:

* Removing requirements for specific provision or use of “Racing Programs”, “Infield Boards”, “Noticeboards”, and “Public-Address Systems”.
* Information Display Requirements:
o As part of the annual Betting Permit application process, associations will be required to submit for approval a description of how they intend to inform the betting public of:
+ how each pool works, including an explanation of what constitutes a winning bet;
+ the terms and conditions of a bet, including information related to the duration for which a winning ticket is valid, explanation of refunding requirements and applicable ticket cancellation policy;
+ a description of amounts retained from pools, including take-out rates and breakage;
+ all refunded pools and bets, including an explanation for the refund;
+ how and where a ticket may be cashed or cancelled;
+ how the race results, including the Official Order of Finish, winning combinations and payout prices for each pool will be displayed; and,
+ the placement of CPMA contact information, including the 1-800 contact number and website.
o In addition, for each race on which pari-mutuel betting is being conducted, an association will have to make available:
+ information currently provided through Race Programs, including past performances (i.e., chart lines);
+ current WIN odds;
+ the official result, including the winning combinations and pay-out prices for every pool, the number, and the post-time of the race;
+ information regarding any entries and mutuel fields, late scratches, unfair starts, declarations of horses that are non-contestants, and dead-heats,
+ notification of any changes made to the information provided; and
+ any other information as identified by Directive.
o When operating as pool host, an association will continue to be required to make available, on request, pool information showing the total amount bet on each winning horse or combination of horses, and total amount bet on each pool. Further, an association will be required, upon request of an officer, to make available any information related to the conduct of the betting.
o The Executive Director will be able to approve an abbreviated list of required information for the purposes of conducting Advance Betting, Foreign Race Betting, Telephone Account Betting, Theatre Betting, and for associations that conduct fewer than 10 days of racing per year.

Association's Percentage

* Provisions restricting the maximum take-out rate that associations can retain from a pari-mutuel pool will be removed.
* Requirements respecting notification of the CPMA of a change in take-out rates will be reduced from 15 to 5 days notice.

Account Betting Platforms

The principle goal in revising the regulations describing the operation of account betting platforms is to remove requirements that do not advance the federal government's mandate concerning the protection of the betting public. This includes removing reporting requirements that no longer fulfill their intended objectives, and reconsidering the model whereby intra-provincial zones that restrict the operation of telephone account betting are assigned. The principal changes are as follows:
Telephone Account Betting

* Requirements for “Home Market Areas” will be removed. Associations will be allowed to operate TAB systems in any province in which they operate a racetrack, or in provinces in which they have received the approval of the appropriate racing commission. The commission's authority to establish intra-provincial “zones” for the operation of TAB systems will be recognized in the proposed changes.
* Prescriptive requirements related to the displaying of account balance information after each transaction will be removed.
* Requirements for associations to provide daily summary reports of TAB activity will be repealed. Individual account reporting requirements will remain unchanged.
* Provisions describing the information that must be made available to an account holder before a bet has been made, including the description of the bet itself, will be clarified.

On-Track Account Betting (OTAB)

* Provisions describing the information that must be displayed to OTAB account holders by use of “visual displays” and “printouts” will be removed.
* Provisions allowing account holders discretion regarding the display of account balances after each transaction will be introduced.
* Requirements to provide daily summary reports of OTAB activity will be repealed. Individual account reporting requirements will remain unchanged.

Theatre Betting

Regulations that do not advance the federal government's mandate of protecting the betting public will be removed. This includes requiring the provision of ancillary services at betting theatres, such as food and beverage services and seating. Provincial licensing requirements will remain a precondition for all betting theatres. Further changes are as follows:

* Requirements for, and all reference to, “Home Market Areas” will be removed from the regulations.
* The requirement to conduct 50 days of racing in order to apply for theatre betting will be removed.
* Requirements for the provision of food and beverage service, washrooms, furniture, televisions, and fire and safety certification will be removed.
* Requirements to display live, by video, each race upon which pari-mutuel betting is being conducted will be repealed.
* The terms and conditions assigned to Theatre Licences will have the additional requirement of displaying CPMA contact information, including the CPMA 1-800 phone numbers and website address.

Pari-Mutuel Systems

Revisions contained in this section largely reflect the changing landscape in which pari-mutuel betting is currently conducted.
Pari-Mutuel Department

Regulations affecting labour-management relations which are not directly related to promoting the mandate of ensuring the integrity of pari-mutuel betting will be removed. The principal changes are as follows:

* Regulations addressing the manner in which associations must discipline any staff who do not comply with the regulations will be removed.
* Regulations restricting association staff and agents from betting when behind the mutuel lines, or from opening betting accounts, will be replaced. New regulations will be introduced that restrict all individuals with access to confidential betting information from placing bets and opening betting accounts. These regulations will not impede an Association's ability to further direct the betting conduct of their employees and contracted agents, should they consider additional restrictions appropriate.
* Federal provisions requiring employees of the pari-mutuel department to reimburse any money-box shortages will be removed.
* Procedures describing how additional money is to be returned to the betting public will be approved on a track by track basis, and will be a required element in the annual Betting Permit application process.

Non-Issuance of a Ticket

Provisions describing the status of bets made by way of self-serve terminals will confirm that non-issuance of a ticket does not necessarily nullify the status of a registered bet.

These are primarily “housekeeping” changes, designed to modernize the language of the regulations and eliminate unnecessarily repetitive language. The principal changes are as follows:

* Replacing references to “seller” and “cashier”, with “teller” in all instances. The definition of “teller” will be clarified to confirm that tellers need not necessarily be “employees” of the association, and that their role can be filled by persons acting as “agents” of the association.
* Removing reference to “computerized”, “electro-mechanical” and “manual” pari-mutuel systems, and consolidation of the general requirements for all pari-mutuel betting systems.
* Removing provisions that allow Agency Officers to couple two or more horses to form an entry for betting purposes.
* Approval for the conduct of “advance betting” will be issued by the Executive Director, rather than a CPMA officer.

Approval of Betting Pools

The means by which pari-mutuel pools are defined will be revised to facilitate more efficient responses to requests to operate new bet types. This approach will support the interests of both industry and the betting public. The principal changes are as follows:

* A core set of requirements for all pari-mutuel pools will be established in the regulations, and rules specific to the operation of each bet type will be set by “Directive” as issued by the Executive Director of the CPMA.
* Current requirements addressing the use of Gross and Net Pool Pricing will remain, as will general refunding provisions that are not pool specific (e.g., situations where races are cancelled, declared “no contest”, or cannot be properly judged, etc.).
* Regulations will stipulate how additional money is added to a pari-mutuel betting pool.
* Regulations will outline the requirements for the possible application of the “favourite substitution rule”, betting on “also eligibles”, and patron-selected alternate runners.

Specific Bet Type Directives


Rules describing the transfer of “carry-over” amounts between associations will be introduced.


The regulations describing the operation of the Daily Double pool will be amended such that the Consolation Double will be invoked if a horse entered in the second race of the pool is scratched after betting on the first race has closed, rather than after the first race has been declared official.
Federal Roles and Responsibilities

In support of promoting clearer separation between the different levels of regulatory oversight, activities that are consistent with provincial racing responsibilities will be removed. However, those activities for which the federal regulator is uniquely positioned to address, including the provision of the Equine Drug Control Program, will be retained. The principle changes are as follows:
Regulations in Support of Race Adjudication

* CPMA provision of Photo Finish and Video Race Patrol Surveillance Programs will be withdrawn.
* The CPMA requirement for the provision of a communication system between racing officials and various racetrack sites will be removed.
* CPMA requirements regarding the provision of “Finish Lines”, and “artificial lighting” will be removed.

Drug Control Surveillance Program

The federal government's objective is to maintain a responsive and modern approach to issues related to the administration of drugs and medicaments to race horses. The CPMA will continue to work closely with Provincial Racing Commissions, and other involved organizations, on all drug control-related issues through a greater emphasis on consultation and co-ordination of activities. Some specific changes to the regulations respecting the Drug Control Surveillance Program are as follows:

* New requirements will address the responsibility of an association to control what is brought into the Retention Area.
* The requirement for an association to retain an “official veterinarian” will be repealed.
* The name of the program will be changed from, “Drug Control Surveillance Program”, to “Equine Drug Control Program”, which better reflects the objectives and scope of the CPMA approach to controlling the administration of drugs to racehorses.


The CPMA will be promoting the ongoing engagement of industry stakeholders through planned consultative activities. This will include institutionalizing the framework for regularly meeting with provincial regulatory partners, and consulting on shared concerns such as approaches to issues surrounding equine drug control. The CPMA will also be promoting interaction with the betting public through consultations with identified horseplayer groups, and through regulatory requirements that support comprehensive distribution of CPMA contact information.

The regulatory changes also propose a more transparent foundation upon which pari-mutuel betting is conducted. This includes a revised approach to uncashed winning tickets, and new requirements for informing the betting public of all amounts of money retained by racing associations.
Outstanding Tickets and Money Returned to the Public

New regulations will limit the duration for which winning tickets remain valid. Racetracks will submit for approval an annual plan describing how money collected from outstanding tickets will be returned to the betting public through pool augmentation. Other changes are as follows:

* Introducing the requirement to print the date of the race on all tickets whenever this date differs from the issue date of the ticket.
* Introducing the requirement to notify the public of the period for which a winning ticket remains valid.

Notification of Take-out Rates and Breakage

Associations will be required to notify the betting public of all amounts retained from pari-mutuel betting pools. This will include the ongoing requirement to post all applicable take-out rates, as well as a new requirement to inform the public of the basis by which breakage is calculated.
Sharing Your Views

The CPMA remains committed to advancing this regulatory review in a timely manner. We would appreciate receiving your written comments on these proposed changes no later than November 15, 2007.

Please send comments to:

Regulatory Framework Review
c/o CPMA
1130 Morrison Drive, Suite 100
Ottawa, ON K2H 9N6

or e-mail to: CPMAreviewACPMrevue@agr.gc.ca
Contact Information

Please feel free to contact the CPMA directly by phone at any time: 613-949-0735

Should you have any questions:

David Liston
Associate Executive Director
phone: 613-949-0739

Rande Sawchuk
Director, Policy
phone: 613-949-0722

Darryl Kaplan's take on the rule changes
One of Kaplan's "Views":
Elimination of the maximum takeout rate of 23% - Allowing market forces to rule may not seem progressive but in order for a track to offer a $1 million guaranteed jackpot, it must be able to take more money from each incremental dollar bet.

Actually Darryl, allowing market forces to rule is very progressive. Because it works both ways. It is all about supply and demand. WEG, for example, doesn't want market forces to prevail as they will do everything to prevent competition. But how does an increased takeout help build up a jackpot? I just don't get that one. If the bet won't attract a $1 million pool, it will die a quick death. It is a bs way for WEG to rip people off even more than it does right now. The idea of a nation wide lottery that is related to Canadian horse races is a great idea. It may have the power to attract more interest in horse racing by the general public, but a higher takeout means a smaller payout last time I looked.

I still don't get the removal of the home market restrictions exactly:

* Requirements for “Home Market Areas” will be removed. Associations will be allowed to operate TAB systems in any province in which they operate a racetrack, or in provinces in which they have received the approval of the appropriate racing commission. The commission's authority to establish intra-provincial “zones” for the operation of TAB systems will be recognized in the proposed changes.


OK, so this means that WEG, for example, can operate in every province they own a track and any province that gives them the go ahead to operate in that province. But the intra-provincial "zones" sounds a lot like "home markets" to me. I just don't see how this change things, except it gives the power to define a home market to the Ontario Racing Commission and not the CPMA.

What consumers/bettors really need is to be unrestricted to which TAB they are can sign up with. I don't see this addressed.
Also, to curb WEG's criminal collusion efforts, any Canadian signal should be allowed to be purchased at a fixed price by any other TABs operating within Canada.
I can just see it. If Fort Erie, for example opened up their own TAB system and tried to compete with WEG, WEG would not allow their product to be part of what Fort Erie offered to their clients. WEG would also not allow their patrons to bet on Fort Erie, and they would try to collude with American tracks to get them not allow Fort Erie to have their product either.
Also, Canada should allow rebate shops to operate here as well. If the CPMA is really trying to protect the consumer that is. Competition is good for consumers inevitably.

Betfair is getting the big dough that WEG is losing out on, thanks to WEG's insistence on keeping takeouts ridiculously high. All WEG does is whine about it. They still think they should be a monopoly and that anyone who bets on horses is a sucker.


I went 1 and 2 last week. Back to 500 for the season at 17-17-2.

St. Louis will beat up Atlanta today. Give the 3 points.

Miami is winless and favoured by 1 and a half at home to the Jets. Miami might just romp today. Lay the points.

Cleveland is getting a point against Arizona (who had a real traumatic loss last week in overtime). Look Cleveland to win the game. Fantasy football enthusiasts should enjoy this game.

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