HRR

 

The Future of PARX and Penn National Could Be In Big Trouble

Horse Racing Radar
Rich Bieglmeier
Rich Bieglmeier is a Staff writer for Horse Racing Radar
Friday, February 5, 2021

Pennsylvania's horse racing industry is the crosshairs of Governor Tom Wolf (D). Wolf's latest budget seeks to cut $199 million from the state's Horse Racing Development Trust fund (HRDT). The Governor's office says the money should be used to develop the Nellie Bly Tuition Program instead, saying the switch will "will help thousands of young people graduate with less debt and start to build lives in our communities rather than struggling to pay student loan bills every month."

It's not the first time the Governor went after the HRDT, a set aside from casino taxes as a compromise to legalize casinos in 2017, coincidentally signed by Wolf. The Governor went after the funds in last year's budget too telling Pennsylvanians, "Let's bet on our kids instead of bankrolling racehorse owners."

If Wolf gets his way, the Pennsylvania Equine Coalition's spokesperson Pete Peterson believes it would be "the end of horseracing, which supports 20,000 jobs, delivers an annual $1.6 billion economic impact, and preserves hundreds of thousands of acres of open space" in the Keystone State.

Peterson points to a provision in ACT 42, which created the HRDT as one reason why Wolf could run into trouble raiding the horse racing cookie jar. The act specifically states, "the Commonwealth shall not be rightfully entitled" to the trust's money.

Being in the horseracing business, we do have a dog in this fight. However, we will stick to the facts as we examine whether repurposing the Horse Racing Development Fund to the Nellie Bly Tuition Program will "end horseracing" in Pennsylvania or if its hyperbolic rhetoric on Peterson's part.

The latest numbers we could find are for 2018 from the Pennsylvania Gaming Control Board's Racetrack Casino Benchmark Report. (1) In 2018, $242 million in slot machine tax revenue was generated for the Pennsylvania Race Horse Development Trust Fund, according to the report (page 3).


*source - Pennsylvania Gaming Control Board Racetrack Casino Benchmark Report

The Gaming Board report says $152,614,187 of the HRDT funds went to purses in 2018 (page 5). In total, Pennsylvania horseracing (standardbred and thoroughbreds) paid $162,502,000 in 2018 purses. Do the math and HRDT funds accounted for 93.92% of the purses paid in 2018.

Here is the break of how all the Horse Racing Development Trust's monies were allocated.


*source - Pennsylvania Gaming Control Board Racetrack Casino Benchmark Report

In the Philadelphia Inquirer newspaper, Wolf spokesperson Elizabeth Rementer said, "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."

Horseracing is a numbers' business at every level. It's hard to envision the industry surviving in Pennsylvania if more than 90% of its purse money disappears at the swipe of a pen. It's not picking a side, it's math.  

1 - https://yogonet.com/uploads_ftp/docs/2018-pari-mutuel-benchmark-report.pdf

 

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