Like the undead, Gov. Tom Wolf is back at the door of the horse racing industry’s Race Horse Development Fund in his new budget proposal for the coming year.
There are just some minor tweaks to his proposal this time around.
While that news is grabbing the most headlines in racing at the moment, also included in this report is news on Parx looking to move its Philly area OTBs, and two workers from Penn National Race Course in hot water.
Déjà vu all over again for PA horse racing industry
With no legislative support even from his own party last year coupled with disturbances and distractions from the virus, Wolf’s proposal – first announced a year ago – quietly faded away by last September.
But as Yogi Berra famously said, it is “déjà vu all over again” with a few window dressing changes.
This time around, the proposed amount to take from the horse fund is $199 million, down from $204 million.
It is now the Nellie Bly Tuition Program, not the Nellie Bly Scholarship. Maybe because there already was an unrelated Nellie Bly Scholarship in place at the Indiana University of Pennsylvania. That is where the trailblazing female journalist attended school but had to drop out for lack of funds.
Educating teachers is a new priority, though not an exclusive hurdle.
Other than those small things, the proposal remains essentially the same as a year ago, with money earmarked for students at 14 state universities with the collective name Pennsylvania’s State System of Higher Education, or PASSHE.
The racing fund’s money comes to the PA horse industry via a set-aside of about 10% from land-based casino slots.
Wolf’s budget comments, including his Bly proposal, are available online from his office.
Political reality remains
Before we dive deeper, I asked harness trainer Sam Beegle, a director of the US Trotting Association and a trainer, about the proposal’s political reality finding legislative supporters this time around the track.
“I don’t think anything has changed,” said Beegle.
The simple fact is, Wolf could not find legislative support a year ago among fellow Democrats.
And Republican opposition to all things Wolf has stiffened amid extensive COVID-19 restrictions and unfounded scuffling over the November election results.
Redding says “time for the industry to rely on their racing skills instead of a state subsidy”
PA Secretary of Agriculture Russell Redding defended the proposal’s goals in an extensive statement to PlayPennsylvania.
He began by defending the proposal’s goals of boosting education and increasing workforce development.
“This proposal will help reach the state’s credential attainment goal, make higher education more affordable, support on-time graduation and student retention, promote social mobility into the middle class for low-income students, and get students into the workforce with less student loan debt.”
Time for racing industry to be “self-sustaining”?
And then Redding, who also serves as chairman of the racing commission, came straight at the horse industry:
“While the racing industry is important to Pennsylvania, it is time for the industry to support itself and continue to build upon the unprecedented generous economic investment made by the commonwealth to this single industry. The gaming revenue in the Race Horse Development Fund is a supplement to the purses, so it continues to be on the horseman to increase interest and wagering on their product to increase their purses. And, horse racing will continue to enjoy the equine sales tax exemption, Clean and Green preferential tax treatment, investments we make at the University of Pennsylvania School of Veterinary Medicine to address a veterinarian shortage, and support for the Standardbred Sale at the Farm Show Complex. All marketing funds continue as well.
“It’s important to note that this tuition program is not coming at the expense of dollars generated by racing, but rather revenue from slot machines that was directed to the Race Horse Development Fund. Slot machine revenue is not produced by horse racing. It belongs to the state, not the industry.
“The industry survived long before the subsidy began and it has had 16 years and $3 billion to develop what, by now, should be a self-sustaining industry.”
He concluded:
“It’s time for the industry to rely on their racing skills instead of a state subsidy.”
What Redding sidestepped: Encumbered trust fund
However, one statement Redding made was not exactly so because it failed to provide full historical context and subsequent legislative action – legislation signed into law by Wolf – about the race fund.
His point about the slot revenue for the fund belonging to the state and not the racing industry, in particular, is simply not true.
What Redding’s statement overlooks or misstates:
- The slot set aside to support horse racing is a quid pro quo agreed to in a 2004 political/legislative deal. The deal was struck between urban lawmakers – as in pro-casino – and rural lawmakers – as in pro-horse and pro-horse racing.
- The language making the slot money into an encumbered trust specifies that the money is not the Commonwealth’s.
- While the trust can be broken with legislative support, a lawsuit would surely result, stalling any implementation.
- There is a clawback provision if the money is repurposed.
- Wolf himself signed a revision of the law into place in 2017.
Industry reaction
Pete Peterson, leader of the Pennsylvania Equine Coalition, reacted to the Wolf proposal:
“Given the proposal’s far-reaching negative impacts on Pennsylvania’s agricultural industry and the significant legal issues it faces, we are optimistic that the legislature will again reject this proposal. But by merely floating this idea, the Administration is hurting working families that are already reeling from the effects of COVID-19.
“These next few months are an extremely important time for horse breeders, as customers are deciding right now whether they want to breed their horses here in Pennsylvania or in other states such as New York, Virginia, Maryland, or Kentucky. Putting this idea out there – even though it has little chance of success – will result in real financial harm to our breeding farms here in Pennsylvania.”
The trend of breeders in PA looking to greener pastures is only gaining ground.
Policing racing: 1
On to some recent infractions making PA racing news.
Trainer Murray Rojas, who was found guilty in a jury trial on 14 counts of misbranding prescription drugs over a 13-year period from 2002-14 at Penn National racetrack, failed to have charges against her overturned, according to the Paulick Report.
A US Court of Appeals let her 2017 conviction stand in a recent decision.
She was found not guilty of wire fraud. But Rojas was sentenced to 27 months of imprisonment and two years of supervised release. She also had to pay $6,400 in fines and fees.
The trainer and several veterinarians illegally administered drugs to her horses during a 24-hour exclusion period. The veterinarians admitted covering up.
Policing racing: 2
The license of assistant starter Douglas A. Dietrich was suspended by stewards at Penn National in late January after he refused to be searched.
The search request came after the racing commission heard a starter might have been illicitly providing electrical devices to jockeys.
Parx wants to move OTB sites to restaurants
Potentially on the Feb. 23 race commission meeting agenda are petitions to move Parx wagering sites into Chickie’s and Pete’s restaurants.
According to a spokeswoman, a decision about allowing public comment or holding a hearing should come just before the meeting.
The off-track betting sites are located in:
- South Philly (Turf Club)
- Upper Darby in Delaware County
- Montgomery County (The Oaks)
PlayPennsylvania broke the news at the end of January.
Sports betting would be a part of each of the OTB sites.
The Turf Club site across the street from Live! Casino Philadelphia is already listed for sale. Sources have said Cordish, the developer of Live!, and a Philly sports team are potential buyers.
Lead image credit: AP Photo/Julio Cortez
