Indiana Bills Could Greatly Impact Racing Industry

By James Platz

Three pieces of legislation that would directly impact Indiana's horse racing industry are making their way through the General Assembly.

The Senate Feb. 18 approved a bill that calls for an equal division of riverboat casino admission tax allocations between Hoosier Park and Indiana Downs. The House Public Policy, Ethics, and Veterans Affairs Committee voted Feb. 19 in favor of a measure that would add pull-tab machines to both tracks and two off-track betting locations. Finally, a vote could come Feb. 20 on a budget bill that would cut the subsidy paid to the racing industry by $10 million.

Under the current scenario established by the Indiana Horse Racing Commission, Hoosier Park and Indiana Downs would equally split the $27-million subsidy in 2003. In 2004, half the allocation is to be divided equally, with the other half distributed based on handle and purses generated at each facility.

Hoosier Park officials have argued the bill that passed the Senate takes away decision-making powers from the state's regulatory agency, and is detrimental to the horse racing industry. They also believe an equal split of the subsidy discourages competition.

"When does it end if you start stripping the authority from the horse racing commission?" Hoosier Park president Rick Moore said during a recent Senate Finance Committee hearing on the bill. "It's a slippery slope."

"The commission is there to govern the industry," Tom Bannon, vice president of communications at Hoosier Park, told the Indianapolis Star. "Taking those powers away would weaken the commission and, we think, the industry."

The legislation to authorize pull-tab machines, or video lottery terminals, called for 700 devices at Hoosier Park and Indiana Downs, as well as two off-track locations in Marion County, where Indianapolis is located. But a coalition of industry stakeholders opposed the bill because money for purses and breed development would come from taxes generated by the machines, not from a committed source.

In mid-February, an amendment introduced by Rep. Bill Crawford called for the closure of two OTB facilities: one operated by Hoosier Park in Merrillville, and one owned by Indiana Downs in Evansville. The measure would have allowed 750 pull-tabs at each track, with 1,500 machines at OTB parlors in Indianapolis and Fort Wayne. It also provided a 19% share, or nearly $60 million a year, to horsemen and breeders.

The version adopted by the committee Feb. 19 was altered slightly. The bill would not call for closure of the two OTB parlors, but it prevents both locations from securing pull-tab machines. It would also prevent additional OTBs from opening in Indiana.

Under the amendment, each racing association would operate one OTB parlor. Indiana Downs officials suggested OTB operations should be a joint venture involving both tracks, but committee members did not hold the same view. The bill was sent to the Ways and Means Committee for review.

Revenue from pull-tab machines would eliminate the need for subsidies currently paid to the industry from riverboat casino admission receipts. The subsidy, already under fire, could be capped at $17 million in a bill introduced Feb. 16. A two-year, $22.7-billion budget bill proposed by House Democrats would move $10 million from the horse racing industry to the state's general fund.