Pennsylvania “Defers” Threat to Halt Racing

Citing progress in negotiations with horsemen and an expected vote next week on a bill to use gaming revenue to correct a long-standing structural deficit in the fund that allows the Pennsylvania Horse Racing Commission to operate, government officials have “deferred” the ongoing threat to shut down racing in the state.

The State Racing Fund, which is the primary funding mechanism for the PHRC, has a $20 million annual budget and is currently $6.2 million in the red. The fund is primarily funded through a cut of pari-mutuel wagers, but it almost annually runs dry because of declining handle. In the past, Pennsylvania has shifted money from other funds to make up the shortfall, but an ongoing five-month state budget impasse has prevented that from happening this year.

On Oct. 22, Gov. Tom Wolf vowed to issue a “cease within 30 days” notice to the racing industry unless horsemen’s group representatives, the state’s six Thoroughbred and Standardbred tracks, and government officials came up with a plan to shift the responsibility for funding the State Racing Fund onto the sport’s stakeholders.

A Friday afternoon press release from the Department of Agriculture, which oversees the PHRC, said that the Wolf administration “has decided to defer any decision on the suspension of live racing in Pennsylvania.”

“This week’s talks continued to produce positive steps forward,” said agriculture secretary Russell C. Redding. “We continue to build on the framework agreement reached last week on [Senate Bill 352]. No one is getting everything they want in this bill, but it will give us the long-term financial fix we need to maintain the integrity of this industry and the tools we need to modernize it for the first time in decades. We’ll keep working with the General Assembly in the coming days to put the finishing touches on the bill so a long-term solution can be enacted in the very near future.”

According to a summary of SB 352 posted on www.legiscan.com, the bill, which passed the Pennsylvania Senate in June, 25 to 24, would include broad changes “to racing oversight…pari-mutuel wagering licensing and for advance deposit wagering…medication rules and enforcement provisions…and providing for the cessation of the State Horse Racing Commission and the State Harness Racing Commission.”

To specifically address the current funding problems, SB 352 will also allow the State Racing Fund to tap into the Race Horse Development Fund to cover racing commission and drug testing costs. The RHDF was created in 2004, primarily to pay for purses in the state, but it has been routinely tapped for other purposes. In 2014, the RHDF generated $242 million from Pennsylvania gaming revenue.

Reached via phone late Friday afternoon, Salvatore DeBunda, president of the Pennsylvania Thoroughbred Horsemen’s Association, said he was not immediately aware that the threat to halt racing had been deferred.

“We as an industry are pleased to hear that,” DeBunda said. He declined to comment on SB 352 until he had a clearer understanding of what would come up for a vote. “I know what’s been discussed. I just don’t know what’s going to end up in the final version.”