A shift in slot machine revenue from horse racing to other programs in Pennsylvania is set to expire this summer, and the Pennsylvania Equine Coalition Jan. 8 urged lawmakers to honor the sunset provision.
The coalition, which represents horse owners, breeders, and trainers in the state, noted in a release the amount of revenue from slots paid to the Race Horse Development Fund dropped $6.36 million, or 4.6%, in the second half of 2012. The coalition said it marks "the most significant decline in the history of the fund," which was part of the 2004 law authorizing casino gambling in Pennsylvania.
The loss is on top of a legislated revenue diversion that began in January 2010, when 34% of RHDF revenue was shifted to the state general fund. That amount dropped to 17% in July 2010 and is scheduled to expire June 30, 2013.
"For the past four years the equine racing industry has seen the state divert more than $200 million from the Race Horse Development Fund to augment the general fund," said Pete Peterson, a spokesman for the equine coalition. "Given the current revenue trends for the Race Horse Development Fund, the equine coalition calls on the legislature to allow the current diversion of funds from the fund to terminate as promised when enacted."
The Jan. 8 release is the coalition's first public statement of the year on the scheduled sunset of the revenue diversion plan. Early in 2012 the horse industry had to fend off further attempts by the governor to use racing-related gaming revenue for other purposes.
On Jan. 3 the Pennsylvania Gaming Control Board said gross revenue from slots in calendar year 2012 increased 2.7% to $2.470 billion from $2.405 billion in 2011. But revenue grew at only two of six racetrack casinos: Parx Casino & Racing (2.10%) and The Meadows Casino & Racetrack (0.16%).
"Despite an overall increase in slots revenue at Pennsylvania casinos in 2012, the funding from slots to the equine industry is decreasing, which will negatively impact purses at the state's six racetracks and hurt incentives to promote breeding of horses in Pennsylvania," Peterson said. "The decrease in funding will have effects well beyond the equine community, as many farms and other small businesses are dependent on the racing and breeding industry for work."
With $131.4 million collected in the first half of the fiscal year, funding for the RHDF is "far below projections," the coalition said, noting the governor's budget for fiscal year 2012-13 projected $287.8 million over 12 months. If trends continue, the RHDF will fall about $25 million short of projections.
The coalition cited competition from other casinos, both out of state and in state, as a reason for the revenue decline. The 2004 law set the percentage of slots revenue to horse racing at 12% at racetrack casinos and 6% at non-track casinos.
According to The Jockey Club Information Systems, purses paid at the three Thoroughbred tracks in Pennsylvania in 2012 totaled $127,521,888. Parx Racing near Philadelphia had the highest purse payout of $65,153,453, followed by Hollywood Casino at Penn National near Harrisburg at $40,232,792, and Presque Isle Downs & Casino near Erie at $22,135,643.
Despite average daily purses of $327,404 over 199 days, Parx had the lowest average field size of 7.73 horses per race, according to TJCIS statistics. Penn National (197 days of racing) was highest at 8.05 horses per race, a tick ahead of Presque Isle (100 days) at 8.04.