Indiana Industry Fights Plan to Slash Funds

Indiana's horse industry is fighting proposed reductions in gaming revenue.

Representatives of Indiana’s horse racing and breeding industry are lobbying against part of the proposed state budget that would reduce its share of revenue from racetrack gaming by about 55%.

A section of the two-year budget bill under consideration was modified to cap the amount racing and breeding receives from slot machines at $27 million. Last year the three racing breeds in the state—Thoroughbred, Standardbred, and Quarter Horse—earned $60 million in gaming revenue.

“As a business and horse racing industry consultant, I know of no business or industry that can lose over half its revenue and survive, let along thrive,” said Ed Martin Jr., a legislative consultant.

Michael Brown, executive director of the Indiana Horsemen’s Benevolent and Protective Association, said industry representatives will have a chance to discuss growth in the horse industry because of gaming during a March 24 hearing of the Senate Appropriations Committee.

A 2010 survey on the economic impact of the Indiana horse racing and breeding industry shows that economic impact increased from $294 million in 2005 to more than $1 billion in 2009. Contributions to state and local taxes went from $5 million in 2005 to $69 million in 2009, the survey shows.

“It should be noted that 2009 was a difficult year, economically, for the economy in general, the state economy, and the equine industry,” the executive summary of the report states. “These results—though reflective of phenomenal growth—have taken place in an economic landscape in turmoil.”

The state’s two racetracks—Hoosier Park Racing & Gaming and Indiana Downs—generated cumulative income of $319 million and paid $49 million in purses in 2009. Breeders reported total income of $31.6 million in Indiana alone; many operate in multiple states.

Brown said the economic impact of the industry is a major selling point to lawmakers.

“There are an awful lot of legislators in both parties in rural districts in Indiana who get it,” Brown said. “This industry has such a reach into areas that, for instance, can never hope to get a factory.”

The study also states the horse industry is responsible for 9,800 jobs in the state.

Martin dismissed claims from some individuals that the horse racing and breeding industry is “subsidized” by state tax dollars or other industries.

“The addition of slots to the racetracks is an additional revenue source and profit center generated at our facilities,” he said. “It’s not different from any other business that adds additional products or services to generate more income and profit to become financially viable.”

The budget is scheduled to take effect July 1, meaning any reductions won’t impact the Hoosier Park harness meet that begins in late March, and the Indiana Downs Thoroughbred/Quarter Horse meet that begins April 18. The concern is for subsequent meets that begin in July: harness at Indiana Downs and Thoroughbred/Quarter Horse at Hoosier Park.

Indiana Downs, in its first condition book, projects purse levels similar to those of 2010. The stakes schedule will be highlighted by the $200,000 Oliver Stakes for 3-year-olds on the turf; purses for open and state-bred maiden special weight events are set at $35,000.

Brown said it’s too early to assess the potential impact of the proposed reduction in gaming revenue for racing. “We’re hoping (the percentage in the budget bill) changes,” he said.