Horsemen's Money Goes to Dogs--But Not for Long?

Thoroughbred interests in West Virginia are hopeful lawmakers will correct action that took revenue for a proposed breed development program at Mountaineer Race Track and Gaming Resort and shifted half of it to an incentive program for racing Greyhounds.

The situation developed this spring when Gov. Joe Manchin vetoed legislation that would have created a statewide breed development program. (Mountaineer is the only one of four tracks in the state not part of the current program.) However, the funding mechanism for the program was included in a separate employee pension bill that passed the legislature and became law.

Therefore, 1.5% of revenue from video lottery terminals at Mountaineer began going to the West Virginia Thoroughbred Development Fund and the West Virginia Greyhound Breeders' Development Fund on July 8. Half of the money goes to the Thoroughbred incentive fund at Charles Town Races & Slots, while the other half goes to the dog breeding industry at Tri-State Racetrack and Gaming Center and Wheeling Island Gaming.

Joe Cuomo, director of audits and racing for the West Virginia Racing Commission, said the money couldn't be held in escrow or abeyance under the letter of the law. The Mountaineer horsemen's revenue will continue being used for awards at the other tracks--and for another species--until the legislature addresses the situation, he said.

Delegate Joe DeLong, who represents Hancock County, where Mountaineer is located, met July 11 with state officials and said he believes the breed development program will be addressed again by the legislature in September. He said Manchin supports the program but wants to be sure other provisions aren't included in any legislation.

"The governor's reservations are not with the bill itself but that it could open up substantial parts of the VLT code," said DeLong, the leading advocate for the breed development program. "He assured me we have 100% support for the concept of the (breed development) bill."

Under the original VLT law, 15.5% of revenue goes to purses. (That percentage has decreased somewhat because of a 2005 law that temporarily shifts some purse revenue to the state to support a workers' compensation program in need of funding.) At Charles Town, 14% goes to the regular purse account and 1.5% to state-bred purses. The same formula is now in place at Mountaineer.

Despite the legislative snafu, DeLong said there is support among horsemen for a breed development program, which was the subject of a legislative interim study in 2004.

"We looked at the amount of purse money we're awarding," DeLong said. "It's a huge amount of money fueled by the video lottery, and what we're seeing is a whole lot of money going out of town. In the Eastern Panhandle, breeding Thoroughbreds is a $3-million-a-year industry. It could be more than double that statewide if the two (programs) feed off each other."

At Mountaineer last year, $37.6 million was paid in purses over 219 racing days for an average daily payout of $171,000.

A big reason horsemen supported the program, DeLong said, is a provision that says if the state-bred races don't fill, the money is returned to the general purse account on a quarterly basis. "That's something that eliminated a lot of opposition," he said.

Horsemen have been fairly low key on the issue, but they're somewhat perturbed over the developments that have funneled Thoroughbred revenue to Greyhound interests, especially on the heels of the workers' comp law that will take about $3.5 million from the Mountaineer purse account.

Officials indicated there is no immediate danger of a purse reduction. Lora Bailey, executive director of the Mountaineer Horsemen's Benevolent and Protective Association, said the purse underpayment stands at $4.5 million to $5 million, in part because management was able to keep stakes purses on par with 2004 levels.

"The idea is to get (a breed development program) started, even though it may take a while," Bailey said. "There already are some farms starting up around here. It's a really good thing."

DeLong said farm sales valued at about $3 million were ready to go through before the legislation was vetoed. He said one farm that was on the market five or six years would have been sold for almost $1 million for the purpose of developing a Thoroughbred breeding operation.

"Tons of farms right now are being wasted," DeLong said. "We have the land and the resources here. We've built such a great racing product, but because West Virginia wasn't known as a racing state, no one knows what to do with it."

Mountaineer is located on the Ohio River in West Virginia's narrow Northern Panhandle between Pennsylvania and Ohio. The region features a mix of industry and farmland.