DaytonDailyNews.com

Proving where a horse was born is no easy matter, especially for an agency like the Ohio State Racing Commission that has no subpoena powers.

Marble Cliff and Houston Heist, winners of a combined $137,000 in prize earnings restricted to Ohio-bred race horses, weren't born in Ohio even though they were registered that way by Kentucky breeders G. David and Diane Shashura.

The Shashuras told the commission they made a simple filing mistake, a claim some Ohio horsemen find difficult to believe.

"You don't get bills for thousands of dollars every month and not know where they're coming from," said Jim Morgan of Centerville, a former longtime adviser to the racing commission and the leading prize-winner among horse trainers in Ohio.

Joe Sugar, a part owner of Marble Cliff and Houston Heist, told the commission in September that the Shashuras paid all the bills and simply passed their costs on to him. Sugar testified that he had no reason not to believe the Shashuras, his longtime breeding partners, about the foaling location. At the same hearing, the Shashuras testified that they tried to find a suitable foaling farm in Ohio, but could not.

Tom Hill, the Columbus attorney representing Sugar, said Sugar's testimony before the commission "is pretty conclusive that he did not know" the two horses were foaled somewhere other than in Ohio. The Shashuras couldn't be reached for comment.

Under pressure from the commission, the Shashuras returned the $4,700 in state breeder awards for the two race horses while the owners returned the $137,000 in prize money. In addition, seven other horses the Shashuras admitted were mistakenly registered were disqualified from racing by the commission.

James Gabel, a former racing commission member and horse breeder who lives in Washington Twp., thinks the punishment is insufficient. "I'd give them a two-year suspension of any licenses and ban all of them from participating in the Ohio Thoroughbred Racing Fund for life," Gabel said.

Sugar and another part-owner of Marble Cliff, Charlie Ruma, are the largest owners of the Beulah Park Race Track near Columbus. Sugar contributed $20,000 to the campaign of Gov. Ted Strickland, whose office appoints the five members of the racing commission. The Shashuras, formerly of Bellbrook, have long bred horses for Ruma and Sugar.

Sam Zonak, executive director of the racing commission, denies any favoritism. Commission officials said the investigation is not closed and a special hearing on the case will be held Friday, Nov. 14, at the commission offices in Columbus. But they say there may not be much more disciplinary action they can take.

"We have to work within our rules and regulations," Zonak said.

As overseers of an industry that draws nearly $375 million in wagers annually, the commission has no subpoena power and no authority to prosecute criminally, only administrative powers that allow the agency to retract licenses to breed or race horses in Ohio. The Shashuras, however, have no Ohio licenses to pull. Their horse farm, Wynnmere, is located in Paris, Ky.

Tim Capps, a national expert on the horse racing industry at the University of Louisville, said the commission has the option of filing a lawsuit if they feel they have enough evidence against the Shashuras and the owners. The lawsuit would then give the attorneys for the commission subpoena powers as part of the discovery process.

But John Izzo, legal counsel for the commission, said the agency doesn't have enough proof to take the case to court.

Some Ohio horsemen are calling for a complete overhaul of the racing commission. The majority of commissioners ought to be required to be part of the racing industry, as they are in Kentucky and many other states, Gabel and Morgan said. Instead, they say, commissioners are mostly political appointees with little knowledge of the business.

Adding to the tensions between Ohio racetrack owners and breeders is the decline in the state's racing industry, Capps said.

Wagering in Ohio has dropped more than 30 percent since 2001 — lowering revenues for racetrack owners, race purses for horsemen and funding for the commission's investigative staff. The cause is not just the sputtering economy, but competition from adjacent states — Indiana, Pennsylvania and West Virginia — where racetracks are permitted to have slot machines and other forms of gambling. Ohio voters turned down a constitutional amendment in 2006 to allow more gambling at racetracks.

"Everyone is arguing over their slice of a shrinking pie," Capps said.

More recently, horsemen and track owners have been wrangling over how to share the growing pot of money wagered on the Internet. Ohio horsemen want a 6 percent share to go equally to racetrack owners, horsemen and wagering firms, but some racetrack owners object.

Last week, as contract negotiations with horsemen bogged down, Sugar and Ruma shut down Beulah Park for three days of racing — a direct hit on horsemen whose only livelihood is winning purses. Horsemen want the racing commission to fine Beulah Park for unwarranted cancellation of those race days, but the commission points out that Beulah Park will still meet its required minimum number of race days despite the cancellations.

The commission says it has new rules on the way that will help prevent registration "mistakes" like those for Marble Cliff and Houston Heist. Among the proposals is a $10,000 fine for falsely registering a horse and a requirement that breeders be licensed in Ohio to be eligible for state breeder awards. An ad hoc committee also is looking at stricter registration procedures for listing foaling locations. The commission could approve the changes as early as Jan. 1, Zonak said.

The deeper antagonisms between track owners and horsemen may be harder to assuage.

Since 1987, Ohio's seven racetracks have been given $75 million in tax abatements for improving their facilities, both on the front side for spectators and the back side for horse trainers and owners. Ohio horsemen have long complained that little of the tax money has gone toward improving stables, running surfaces and other facilities they use to care for and race their horses.

The commission has recently allowed track owners to use the tax abatements to pay the interest on racetrack debt, said Dave Basler, executive director of the Ohio Horsemen's Benevolent Association, the negotiating body for horsemen around the state. "That's not what the intent of the (tax abatement) program was," he said.

Izzo said it's perfectly legal as long as the interest is on capital improvements at the tracks.

Capps said he can understand why horsemen would be angry about false registrations when racing purses are dwindling. "They're out there trying to play the game straight and fair, and someone else isn't," he said. But disciplining the offenders is another matter, he said. "Again, the devil is in the proof."

Ohio State Racing Commission

Composition: Five members appointed for four-year terms by the governor. Can't be part of Ohio's horse racing industry.

Duties: Sets rules for conducting horse racing and pari-mutuel betting, licenses participants and monitors races at seven commercial tracks and most of Ohio's county fairs. Also promotes horse racing by providing race purses and supplements that encourage breeding and racing in Ohio.

Employees: 21, including administrators and investigators. Also contracts with 11 track stewards, judges and veterinarians.

Annual budget: $26.4 million.

Source: Ohio Legislative Service Commission