Pete Peterson: Pa. race horse fund provides economic benefits

Bob Dick’s recent Your View on the state budget (“Pa. legislature should fix fiscal woes, not raise taxes”) missed the mark in advocating for the elimination of the Race Horse Development Fund.

His policy proposal would destroy the horse racing and breeding industry in Pennsylvania. This is an industry that the Department of Agriculture has said generates $1.6 billion in annual economic activity and is responsible for the preservation of thousands of acres of open space.

It would also jeopardize the jobs of more than 23,000 Pennsylvanians who rely on the industry. These are hardworking blacksmiths, breeders, stable hands, track workers, horse trainers, jockeys and drivers, veterinarians and farmers who produce feed.

When the state was debating the legalization of casino gaming, horse breeders and owners expressed concern about the impact it would have on horse wagering in Pennsylvania, which funds purses and breeders incentives. Their concerns were well-founded: National studies show that when slot machines are introduced at racetracks, parimutuel wagering at racetracks is reduced by up to 39 percent.

In exchange for the support of the racing and breeding industry, casino operators agreed to an assessment on their slots revenues that would be placed into a new fund, the Race Horse Development Fund. The fund offsets the lost revenue and negative impact of slots on horse wagering, providing money for purses and breeders incentives.

It is also worth noting that horse racing generates additional casino and state tax revenues. A recent report by the Pennsylvania Gaming Control Board noted that revenues from slot machines were 16 percent higher on race days than on nonrace days.

Pennsylvania’s Race Horse Development Fund has breathed new life into the state’s horse racing and breeding industries. Jobs and the economic impact of the industry in Pennsylvania have quadrupled since the creation of the fund.

This benefit was accomplished at no cost to taxpayers — unlike what happens from many economic development programs. The fund is entirely subsidized by an assessment on the revenues that casinos receive from slot machines. And it is an assessment they readily agreed to in exchange for the opportunity to launch casino gaming in the state.

Since its inception, our Race Horse Development Fund has been used as a model when neighboring states such as Maryland and Ohio approved their own gaming legislation. Given the success of the program, it is hard to understand the rationale of those who would seek to destroy all that has been accomplished in the past decade.

Pete Peterson is spokesman and executive director of the Pennsylvania Equine Coalition.