12/19/2006 12:00AM

Kentucky fixes bonus fund

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The Kentucky Horse Racing Authority late on Monday approved an agreement that will require the four major racetracks in the state to make up for a half-million-dollar shortfall in the state's fund for owners' awards.

The agreement will require the owners of each of the four tracks - Churchill Downs, Keeneland, Turfway Park, and Ellis Park - to pay approximately $130,000 into the Kentucky Thoroughbred Breeding Development Fund, which awards bonuses to owners of Kentucky-bred horses who win in open company. An audit conducted earlier this year revealed that tracks had been paying out more in bonus money than the program was collecting.

Money from the bonus program is generated from 0.75 percent of all money wagered on live races at the state's Thoroughbred tracks and 2 percent of all money wagered on out-of-state simulcasts. Tracks would distribute the bonuses based on estimates of how much money would be generated by handle during their meets, and then bill the state for the bonuses awarded.

The audit revealed that the tracks were billing the state for more than the program was producing from handle receipts. According to racing authority officials, the overbilling - which was not intentional, the officials said - stretched back to 1999. Authority officials said that revisions have been made that will prevent the problem from happening again.