The taxable handle generated by Pennsylvania’s six race tracks dropped by more than 10.7% in 2019 to around $300 million.
That’s a decrease of more than $36.1 million from the previous year, according to an annual statistical analysis by the Pennsylvania Gaming Control Board (PGCB).
Long downward trend for horse racing
The decline is part of a long downward trend.
The taxable handle has dropped every year since the reporting began. In 2006, the taxable handle from all tracks was just under $976 million.
That means handle fell by more than two-thirds in 13 years. The taxable handle was cut in half by 2013 when it dropped to $480.6 million.
That’s not unique to PA, the report notes, and is due to decreasing demand for retail horse betting.
Closed off-track sites cut into simulcasting
Also, a portion of taxable handle is generated by wagers placed on races held outside of Pennsylvania via simulcast betting. But more than half of Pennsylvania’s off-track wagering facilities have closed over the past several years, including one in December 2018, due to a decrease in simulcast wagering.
That trend has continued in 2020 with the permanent closing of The Oaks. The off-track wagering locations had been a significant source of PA horse betting revenue.
The report noted that the horse industry hopes that adding sports wagering within off-track wagering facilities and at racinos will help attract a new fan base. But there were no quantifiable signs of that happening during 2019.
Live racing handle flat, but in some ways, that’s encouraging
The live racing handle in 2019 was flat when compared to the previous year, which is somewhat encouraging given decreases in previous years.
Pete Peterson, Pennsylvania Equine Coalition spokesman, found it a positive sign.
The total dollars wagered on live races within PA — known as the live racing handle — was $669 million in 2019, the same as it was the previous year.
But many elements of what makes up the handle were down in 2019.
The live on-track handle was down 7%. The live off-track handle was down 26%. Electronic wagering was down 5%. Handle on in-state export of racing feeds was off 11%. The out-of-state export of signals rose by 1%.
Number of days of horse racing flat, but number of races up
The number of race days year-over-year was flat at 905 days in 2019. But there were 10,025 races, a 2% increase.
Purses paid totaled $183 million. Revenue generated from slot machine gaming accounted for 89% of all race purses earned in 2019. The rest was generated from a portion of total dollars wagered on horse racing.
Support from casino slots experiences slight decline
On the other hand, $238 million in slot machine revenue was generated from casino slot machines for the Pennsylvania Race Horse Development Trust Fund. This represents a decrease of 1.4%, due to a decrease in GTR (gross terminal revenue) generated by the six racetrack casinos.
We can expect a much bigger drop in this figure for 2020, considering multimonth statewide casino shutdowns and subsequent reductions in operating capacity.
The horse trust fund was set up in 2004 as part of the compromise bill that ushered in casinos in return for supporting race tracks. Last year, the fund received roughly 10% of GTR from casino-based slots.
The racing fund channels money to purses, breeding programs, regulation, vet programs, the state farm show and county fairs.
The majority of the fund — approximately $159.9 million — went to purses.
Wolf had eyed the trust fund
Gov. Tom Wolf had targeted a the horse trust fund for a raid to support a proposed scholarship program for state universities.
The proposal did not gain political traction, and the virus derailed Wolf’s campaign. But racing advocates worry that the proposal will return during the budget season in November.
No breakdown by track
Peterson, the racing advocate, said he wishes that the PGCB reports broke down information by individual facility so better comparisons could be made.
He also said the report does not look at the positive effect on casino slot revenue that tracks bring in the days leading up to a big racing event.