State Racing Commission Fails to Remit $15 Million in Required Distributions to the Board of Regents

The Louisiana State Racing Commission (LSRC) has not made more than $15 million in required distributions to the Board of Regents, according to a report released Monday by Legislative Auditor Daryl Purpera.

State law authorizes LSRC to collect a license fee of one and one-half percent of amounts wagered at off-track wagering facilities (OTB fees), and requires that 14 percent of those fees be distributed to horse breeders associations, 33 percent to the Board of Regents, and 53 percent retained by LSRC for administrative costs.

Although the commission has made required distributions to horse breeders associations, it has not made the required distributions to the higher education board. “As a result, the Board of Regents has not received more than $15 million for distribution to public and private institutions of higher education for the period of July 1996 through April 2015.” the auditor said.
In addition, the report disclosed that in three of the last six fiscal years, the commission spent more than the 53 percent of OTB fees it is allowed by law to retain for administrative costs.

LSRC management told auditors that the distributions were not made “…because management did not have a mechanism in place to send funds to the Board of Regents, and there was no appropriation for the Board of Regents to receive those funds.”

In its response, LSRC maintained that this statute has never been funded or appropriated by the legislature and stated, “Not once in twenty eight years has the Board of Regents sought to collect funds from the statute.”

In addition, auditors reported that LSRC had controls in place over self-generated revenue collections, payroll expenditures, and certain statutory distributions, other than OTB fees.