Charles Town

Charles Town

Tom LaMarra

WV County Wants Horse Racing Funds Protected

Commission to prepare resolution for state lawmakers this year.

The governing body of Jefferson County, W.Va., where Hollywood Casino at Charles Town Races is located, plans to send a message to state legislators that further reductions in the share of gaming revenue that supports Thoroughbred breeding and racing in the county are unacceptable.

The Jefferson County Commission Jan. 8 held what it called a "horse racing summit," at which it heard from industry stakeholders and local state representatives. Commissioners voiced support for a resolution outlining the significance and importance of horse racing to the local economy, including its role in tourism.

The West Virginia Legislature last year, in the final hours of a special session, passed what has been called the "haircut bill"—it took 10% of racing's share of gaming revenue and shifted it to other state programs. In addition, language was inserted that racing wouldn't get back the $11 million per year it lost to make workers' compensation programs whole.

Now, there is fear lawmakers will go after the remaining $80 million a year Thoroughbred and Greyhound racing receive from gaming to plug a $400 million budget hole. In a major shift, Republicans now control both houses of the legislature; Gov. Earl Ray Tomblin is a Democrat.

Sen. Herb Snyder, a Democrat who represents Jefferson County, said Tomblin last year indicated "he wouldn't take more money from the horsemen," but the shift in legislative power could be a complicating factor. Snyder said there have been rumblings the legislature may go after the $80 million; others have said it will be left alone.

"If they take the $80 million, it will be the end of you," Snyder said during the Jan. 8 county commission meeting. "We can't let that happen."

Democrat Stephen Skinner, a member of the House of Delegates who represents Jefferson County, noted there is a disconnect in the legislature when it comes to Jefferson County, which borders Virginia and Maryland in the state's Eastern Panhandle and is far removed from the state capital of Charleston. He said racing's share of revenue from gaming—despite the original legislative intent to support and grow the industry—is mistakenly viewed as a wasteful subsidy.

Jefferson County voters authorized video lottery terminals, and later table games, at Charles Town, which is owned by Penn National Gaming Inc. The idea was to maintain the tradition of Thoroughbred racing and breeding in the county, as well as provide casino jobs and boost tourism.

The racetrack, which opened in 1933, closed for a brief period in the mid-1990s after the first local referendum on VLTs was defeated.

Like many other casinos in the Mid-Atlantic region, Charles Town has seen its revenue decrease because of increased gaming competition in neighboring states.

"There is no reason the state of West Virginia should get into subsidizing horse racing," Skinner said. "It's absurd. What we want is for PNGI and the horsemen and the breeders to succeed in Jefferson County. I beg of you all to speak with a unified voice, and come to Charleston to fight for all of us here."

County commissioners repeatedly said a unified voice is necessary, and said they want PNGI to be part of it. When it comes to legislative lobbying in West Virginia, however, the state's racetrack casinos and horsemen's groups have different lobbyists and don't necessarily share the same interests.

How that dynamic will impact the Jefferson County effort remains to be seen. But Erich Zimny, vice president of racing operations at Charles Town, indicated to the commission the company understands the need for unity.

"In addition to unity, there is the education factor," Zimny said. "I'm confident everyone in this room knows what the issues are, but I'm not so sure that in other parts of the state that's necessarily the case."

Much of West Virginia relies on the coal and natural gas industries, which also have experienced declines in revenue. The economic contributions of horse racing at Charles Town, and even at Mountaineer Casino, Racetrack & Resort in the state's Northern Panhandle, aren't well recognized throughout much of the state.

Phil Reale, who spoke on behalf of the Charles Town Horsemen's Benevolent and Protective Association, said the change in legislative leadership offers opportunities for education. He said a resolution from the country is a means to send a message to Charleston.

Republican Delegate Paul Espinosa, who worked at Charles Town years ago, said there are 30 new legislators in 2015, and they need to be educated on the contributions racing and breeding make to Jefferson County and other parts of the state. He said 21 members of the House of Delegates who voted for the 10% reduction in racing revenue in 2014 are gone.

"(The racing industry) is not something we can automatically expect legislators to understand," Espinosa said. "But clearly the risk before us is a gradual return to the days of the mid-1990s, which we'd rather not return to."

In 2004, the year before a percentage of racing revenue was shifted to workers' comp programs, purses at Charles Town totaled $51.9 million. In 2014, purses totaled $32.8 million.

The 37.4% decrease is largely attributable to Legislature-authorized reductions in horse racing's share of gaming revenue and overall declines in gaming revenue at Charles Town because of competition from other casinos in the region.