State Racing Commission

This is a transition audit of the former State Racing Commission as its duties moved to the Massachusetts Gaming Commission.

“In accordance with Chapter 11, Section 12, of the General Laws, and at the request of the MGC, the Office of the State Auditor (OSA) conducted a transition audit of the status of financial activities, accounts and functions and the related systems and control environment of the SRC for fiscal year 2012 through the transition date of May 20, 2012.”

The audit was done to help the new agency understand the old agency’s finances and operations, and to flag any control problems needing correction.

“The purpose of our audit was to inform the MGC of the status of fiscal and administrative operations as of May 20, 2012 to enhance the transition from the prior administration to the new administration and to identify systems and internal accounting and administrative controls needing corrective action and improvement.”

The State Racing Commission oversaw gambling-related racing activities, so its finances and controls affected public money and the integrity of racing regulation.

“Under the current ISA, DPL is charged with the supervision of all conduct relating to the business of racing in Massachusetts and ensuring the integrity of the racing industry.”

For residents, the report says the former racing regulator’s tested operations did not show major control or compliance problems, but there was a legal question about payments to host cities and towns.

“However, an issue requiring further legal review and resolution was identified.”

The auditor did not report audit findings against the commission’s tested operations, but did identify a payment issue that needed legal clarification.

“As previously noted, the results of our audit testing disclosed no issues of noncompliance.”

The Massachusetts Gaming Commission may need legal advice about whether certain city and town payments were proper and what should happen with future payments.

“Consequently, the MGC may want to obtain a legal opinion on this matter from the State Attorney General.”

The main significance is that racing oversight was moved to a new agency, and the audit found the old agency’s tested operations were in good order at the point of transition.

“On May 20, 2012, pursuant to Chapter 194 of the Acts of 2011, the Massachusetts Gaming Commission (MGC) assumed all duties and responsibilities formerly carried out by the State Racing Commission (SRC).”

Pari-mutuel wagering means betting where winnings come from the total pool of bets, and the report uses the term while describing the racing activities transferred to the Gaming Commission.

“Pursuant to Chapter 194 of the Acts of 2011, the State Racing Commission (SRC) ceased operations on May 20, 2012 and the Massachusetts Gaming Commission (MGC) assumed oversight responsibility for horse racing, pari-mutuel wagering, and simulcasting in the Commonwealth.”