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SUMMARY
The Office of the Auditor General has conducted a
performance audit and Sunset review of the Arizona State Boxing Commission,
pursuant to Laws 2000, Chapter 25. This audit also included a review of the
Department of Racing’s boxing-related responsibilities. The audit was
conducted under the authority vested in the Auditor General by Arizona Revised
Statutes (A.R.S.) §41-2951 et seq.
The Arizona State Boxing Commission (Commission)
was created in 1982 to provide both physical and financial protection to
participants and persons interested in the sport of boxing. In addition, the
Commission has regulatory authority over some nontraditional and tough man
contests. The Commission shares boxing responsibilities with the Arizona
Department of Racing (Department). The Commission licenses boxers, promoters,
referees, judges, and others associated with boxing, oversees boxing events,
and is responsible for enforcing rules
and statutes and resolving complaints. The Department of Racing is responsible
for collecting boxing license fees and other revenues owed to the State.
The
Commission Needs to Better
Ensure That Participants Are
Physically and Financially Protected
(See pages 9 through 18)
The Commission needs to do more to fulfill its
mission to provide for both the physical and financial protection of all boxing
participants. First, the Commission must better ensure that boxers meet
licensure requirements. Prior to granting a boxing license, the Commission must
determine that a boxer has a current medical examination, and grant special
permission if the boxer exceeds age guidelines. In addition, the Commission
requires boxers to submit a negative HIV test prior to licensure. However, the
Commission’s files lack documentation of these steps for many licensed boxers.
The Commission must also better ensure that event
safety requirements are met. The
Commission did not have documentation of required examinations for all boxers at
pre-fight weigh-ins, immediately prior to events, and immediately following
fights for boxers who were knocked out or otherwise injured. The Commission has
also not required referees to undergo physical examinations prior to officiating
in boxing events, as required by law. In addition, the Commission conducted
random drug tests for only 5 of 13 events. Finally, some contests exceeded
safety standards, such as a boxer fighting too soon after his most recent fight
without receiving special permission from the Commission.
More can also be done to protect boxers’
financial interests. Statutes require promoters to provide at least $2,000 in
medical insurance coverage and $2,500 in life insurance to boxers or their
beneficiaries. These amounts have not been updated since 1980 and required
amounts in other states are from almost 4 to 40 times higher. Additionally,
although the Commission said it has never received a complaint that a boxer was
not paid, some promoter/boxer contracts are not provided by required deadlines
or provided at all.
Finally, two statutory changes should be made in
the licensing process. First, because the Commission must issue new licenses
each year, rather than renewals, statutes require the Commission to perform
background checks on promoters and some other licensees each year. Other states
issue license renewals and perform subsequent background checks only if they
suspect a licensee of criminal behavior. Second, the Commission’s Executive
Director has been approving and issuing licenses to boxers and other applicants
even though he does not have the authority to do so. Executive directors of
other states’ commissions approve and issue licenses and the Chairman of
Arizona’s commission said it would not be practical for the Commission to
approve all licenses.
Boxing
Revenue Collection
Has Improved But Some
Problems Continue
(See pages 19 through 24)
Additional improvements in revenue collection are
needed to help ensure that the State recovers as much of the cost of boxing
regulation as possible. Funding for boxing regulation comes from the General
Fund, with license fees and tax receipts from boxing events offsetting less than
one-fourth of the total. Some improvements have been made to the process since
the 1996 audit (see Auditor General Report No. 96-14). Promoters are now statutorily required to obtain a cash or surety bond
prior to licensure to serve as a guarantee should the promoter fail to pay event
participants or the required state event taxes. Additionally, the Department of
Racing developed a process to issue letters to promoters and the Commission when
promoters fail to comply with requirements.
Despite these improvements, several long-term
problems continue. Prior to events, promoters continually fail to provide the
Department with required documentation necessary to ensure that the State can
determine how many tickets were sold in each price category. Promoters also
often fail to meet with the Department within the required time frames to
calculate and pay the tax.
Both the Department and the Commission can do
more to ensure promoter compliance. The
Department needs to ensure that it issues noncompliance letters for all events
in which noncompliance is identified. Auditors identified 22 revenue-related
violations during fiscal year 2000, but the Department notified the Commission
of only 6 of those violations through noncompliance letters. The Commission did
not take disciplinary action in those instances. When the Commission is notified
of violations, it needs to discipline promoters to help ensure future compliance
with all requirements. The Commission has the authority to issue fines up to
$1,000 per violation or suspend or revoke licenses, but has never done so.
Commission
Should Have
Authority to Regulate All
Nontraditional and Tough
Man Contests
(See pages 25 through 28)
The Legislature should consider giving the
Commission authority to regulate all nontraditional and tough man contests,
including amateur contests. Currently, the Commission has authority to regulate
certain boxing and kick-boxing events and professional nontraditional and tough
man contests. However, some professional nontraditional contests claim to be
amateur and avoid regulation. None of the states auditors contacted make a
distinction between amateur and professional nontraditional events. Rather,
other states such as New Mexico and Texas, regulate all such events regardless
of their amateur or professional status. Providing the Commission with
regulatory authority over all nontraditional and tough man contests, including
amateur contests, would prevent promoters from avoiding regulation, better
enable the Commission to ensure the safety of all contestants, and could
increase state revenues.
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