Funds Intact, But WV Prepares for Change
The West Virginia legislature ended a short special session May 21 and apparently didn't shift more than $14 million in gaming revenue to purses and breed development programs for horse and dog racing to other programs for fiscal year 2015..
A 10% shift of purse funds to other state programs was authorized by the legislature earlier this year. But in a quick turn of events, it was discovered there was an excess of about $25 million after the budget had been balanced. A horsemen's representative said May 23 the funds actually were never taken away; previously it was believed the money had been redirected and then restored.
The funds come from a share of video lottery terminals and table games at four racetracks in the state.
Horsemen's representatives in West Virginia were digesting the move, as well as examining May 212 action by the House of Delegates to appropriate, by amendment, $1 million of the purse share to social service programs. The Senate version of the bill left the full $15.6 million intact; Democratic Sen. Herb Snyder questioned whether the House action is legal given the funds are statutory.
The latest developments come amid potential change in the West Virginia racing landscape. When the purse reduction bill passed, horsemen began discussing ways to maintain quality racing programs and field sizes due to shrinking foal crops.
The Charles Town Horsemen's Benevolent and Protective Association and Hollywood Casino at Charles Town Races have been negotiating for months on a new contract, and are scheduled to meet again May 23. It remains to be seen how the latest legislative action will affect the negotiations.
Both sides said they have been negotiating in good faith. Among the issues are racing days and the percentage of purse money set aside for stakes; it's currently 8% at Charles Town.
"We're continuing our discussions with the HBPA on a new contract and have a meeting scheduled (for May 23)," Charles Town vice president of racing operations Erich Zimny said. "Like any negotiation, it's a process."
Charles Town by law must run 220 racing days a year unless the track and horsemen agree to fewer days. The Charles Town HBPA board of directors the week of May 11 sent track owner Penn National Gaming Inc. a letter saying it won't require the track to reschedule 20 racing programs lost earlier this year to weather and track conditions.
It's one example of a shift in thinking that would have been unheard of even a few years ago. Charles Town HBPA board members addressed the issues in April interviews with The Blood-Horse.
"We're scheduled for 220 days but we have latitude," said Jeff Runco, a board member, trainer, owner, and breeder in West Virginia. "One thing we want to do is keep purses whole. We need to come up with a comprehensive plan, but until we get a contract, we won't know what we want to do.
"We want to look at keeping the industry here strong. We want don't want to water (the product) down and have it not be a good product."
Charles Town HBPA president Randy Funkhouser called the 2014 legislative session a "wake-up call." Not only did lawmakers initially shift purse revenue to other state programs, they opted not to sunset earlier legislation that has reduced purses to fund a workers' compensation program.
At Charles Town alone that amounts to almost $6 million a year in purse money generated by VLTs.
Even with the May 21 legislative reversal on purse funds, horsemen said year after year of not knowing how much money will be available is damaging the racing and breeding industries in the state.
"The West Virginia breeding program is good, but if you're going to look at taking a shot, by the time the foal hits the ground, the legislature pulls the carpet out from under you," Charles Town HBPA board member Lee Couchenour said.
"For a breeder you need certainty," said Charles Town HBPA board member Jim Miller, who supports the West Virginia program but now has mares foaling in other states. "These are major investments. We want our assets to produce where they can make the most (on our investment)."
"Even with our (breed) development program, most people are still losing money," Funkhouser said. "People are starting to ask questions. Breeders have the option to go to Maryland or Pennsylvania. You put these (programs) in for three to five years, and then the legislature comes and wants to take it away."
Though the economic impact of horse and dog racing and breeding in West Virginia was noted in a recent report prepared by West Virginia University, horsemen said more needs to be done to make the industry's case. The Charles Town HBPA is looking at hiring a marketing consultant to "put face on industry" and explain that it includes 1,000-1,500 small businesses that rely on racing for income.
"We need to put those people out there," Funkhouser said. "It's very difficult to get people to understand a very esoteric industry."
"We all pay taxes," said Couchenour, who is active in a local program that finds new homes for mares in partnership with Equine Rescue of Aiken. "We provide a lot of low-end jobs that keep people out of the system."
Funkhouser said horsemen in 2015 may lobby for advance deposit wagering, which remains illegal in West Virginia, and historical race wagering. He suggested Instant Racing machines could be installed at restaurants, bars, and clubs as a way to increase revenue for racing.
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