Pa. horse racing agencies said to face insolvency
HARRISBURG — The two state commissions that regulate horse racing in Pennsylvania are on the brink of insolvency, officials said on Wednesday, and two top state senators are calling for the commissions to be dissolved and the regulatory responsibilities shifted to the Pennsylvania Gaming Control Board.
The committee's executive director, Michael Rader, said commissions that regulate harness racing and thoroughbred racing are expected to run out of money well before the fiscal year ends in June.
Major factors include rising personnel costs and the expansion of Internet and off-track betting that is exempt from the pari-mutuel tax that finances the commissions, Rader said.
“Technology has just made it a lot easier for folks to make wagers without having a physical presence at the track,” he said.
Senate President Pro Tempore Joe Scarnati, R-Jefferson, and Majority Leader Dominic Pileggi, R-Delaware, have signed on as co-sponsors of the proposal advanced by Senate Agriculture Committee Chairman Elder Vogel, R-Lawrence.
Vogel's bill would shift responsibility for drug testing of horses and other regulatory activities to the gaming board, which licenses and regulates Pennsylvania's gambling casinos. It would take effect 60 days after it is enacted, Rader said.
By law, the horse racing industry receives more than $200 million a year from slot machine gambling revenue to fatten purses, assist breeding operations and provide health and pension benefits for horsemen.
“Pennsylvania has a large, well-staffed and highly skilled Gaming Control Board which already regulates hundreds of millions of dollars, perhaps billions of dollars, worth of gaming activity in the state,” Pileggi said. “It's entirely appropriate for them to take over the role of regulating standardbred and thoroughbred racing in the state as part of their duties.”
The cost of regulating horse racing — $21 million was budgeted last year — would be offset largely by new licensing fees for racing participants and fee-based drug-testing of horses, Rader said.
Pennsylvania has three harness racing tracks and a fourth that is licensed but not built. It also has three thoroughbred tracks.
A companion bill sponsored by Vogel would provide as much as $5 million from the Race Horse Development Fund, which consists of slot machine money, to sustain the commissions through the transition.
Gov. Tom Corbett's Budget Office helped prepare the transition bill, said Corbett spokesman Jay Pagni.
Alan Novak, chairman of the Pennsylvania Horse Racing Commission, which regulates thoroughbred racing, said the need for changes cannot be ignored.
“This was something we saw coming a year ago,” he said.
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