Key Senators See False Start In Governor’s Plan To Divert Money From Horse Fund

Written By Kevin Shelly on February 21, 2020 - Last Updated on February 24, 2020
Many oppose diverting horse funds in the state budget

Two key Republican Pennsylvania state senators from the Philadelphia suburbs have come out vehemently opposed to the governor’s recent proposal for a $200 million college scholarship program funded by casino slot tax money earmarked to shore up the state’s horse-racing industry.

Gov. Tom Wolf, a Democrat, proposed the move during his Feb. 4 budget address to the Legislature.

He contended the diversion would create a scholarship program allowing 25,000 children to go to state colleges.

Horse racing proposal appears stuck in the gate

Unless his plan gains bipartisan support, the proposal is unlikely to move ahead as written. Republicans have strong majorities in both the Senate and the House.

The money in question is in an encumbered trust fund. The trust protection was put in place in 2017 as part of the gambling expansion law that passed in PA.

The fund supports breeders, owners, horses, farms, jockeys, and other racing-related expenses.

Wolf’s plan requires diverting millions from slot-machine revenue tax, which has subsidized the Race Horse Development Fund since 2006.

The slot tax support measure for the racing industry was part of a compromise deal brokered between urban Democrats and more rural Republicans, which paved the way for the legalization of casinos in PA in 2004.

Given early opposition to the proposal, approval of Wolf’s plan seems far-fetched unless a similar kind of compromise deal can be brokered.

Key Republicans oppose the diversion

The district served by State Sen. Tom Killion (R-Chester and Delaware) includes the 700-acre New Bolton Center, an internationally known facility for the care and treatment of horses operated by the University of Pennsylvania. His district also includes Harrah’s Casino and Racetrack.

He explained his opposition in a release posted recently on his legislative page:

“Agriculture and tourism are the two biggest industries in Pennsylvania. Horse racing is at the nexus of the two. It’s counterproductive to target this important segment of our state’s economy, and I will oppose the inclusion of this proposal in the upcoming budget.

“The horse racing industry, which includes breeders, stables, veterinarians, provides thousands of good, family-sustaining jobs and pumps almost $70 million into state tax coffers every year. Diverting $204 million from the Horse Racing Development Fund, no matter the purpose, effective kills this sector of our economy.”

Senator Tomlinson sees proposal as ill-advised

The district served by State Sen. Robert “Tommy” Tomlinson (R-Bucks) includes Parx Casino in Bensalem. Like Harrah’s, it is both a track and a casino.

Tomlinson made his view against the fund’s diversion during the Parx “Let’s go Racing” show, streamed on YouTube.

Chances for approval “are slim,” he said. Tomlinson argued the trust fund provides “stability” for an industry that provides 20,000 jobs and requires significant investments.

In a related appearance on another “Let’s go Racing” segment, Tomlinson called the governor’s line about betting on students rather than horses “glib.”

Tomlinson believes Wolf’s advisors failed to understand the horse racing money is in a trust, and is protected.

Other parties chime in, Inquirer admits approval unlikely

Pete Peterson, the executive director of the Pennsylvania Equine Coalition, which lobbies on behalf of racing in the state, previously told the Daily Racing Form: “If approved by the legislature, this raid would result in the end of horse racing in Pennsylvania by eviscerating the primary funding source for the purses and breeder incentives that serve as the lifeblood of the industry.”

He did not respond to PlayPennsylvania’s request for comment.

The Philadelphia Inquirer editorialized in favor of Wolf’s plan, but without ever addressing the trust fund issue.

The news outlet concluded its editorial by noting the move is unlikely.

“The horse race industry is not likely to take this quietly. They are sure to galvanize, as they have in the past when questioned about the money they get. Since the Wolf plan depends on legislation in order to move forward, we’re afraid to say that our confidence is not high. The racehorse industry contributes to campaigns. And even if they didn’t, it’s clear from the lack of interest in how they’ve spent $3 billion with little to show for it that our elected officials are happy to keep making this bad bet.”

There are potential areas for a compromise

Last September, PlayPennsyslvania documented the challenges to the Keystone State’s horse racing industry as its fans age and online wagering attracts more and more gambling dollars without adding new patrons to the state’s six tracks.

Roughly 10% of annual slot revenue from the state’s 12 casinos props up the track industry. That came to about $242 million in 2018. 

PA casino slots have funneled more than $2.5 billion to the racing industry. Roughly 20 states prop up horse racing via infusions of cash, often but not always, from casinos.

One possible starting point for a negotiation about the trust fund could be the need to integrate the horse racing industry better with the online direction gambling has taken in recent years. Also, better-unified oversight of racing and other forms of wagering could factor in.

Last year, several members of the often outdated horse industry said change is needed. What those changes might be are open for discussion.

Sacrificing the majority of their funding is not likely a concession the industry will allow without putting up a fight.

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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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