05/11/2017 3:52PM

Louisiana bill would cut subsidies to horse racing purses


A Louisiana legislator has introduced a bill that would redirect approximately $36 million in casino subsidies flowing to horseracing purses and breeders’ awards to a popular scholarship program, leading to concerns among the state's horsemen and breeders.

If passed, the bill, which has been scheduled for a hearing Monday morning by the House Appropriations Committee, would halve the annual amount of subsidies for horsemen and breeders. The money would be redirected to the state’s general fund, though the bill states that it should ultimately be used to shore up the state’s Taylor Opportunity Program for Students, which has distributed awards beyond its budget for the past several years.

Horsemen’s groups have alerted their members to contact legislators on the Appropriations Committee and register their opposition prior to the hearing, said Ed Fenasci, the executive director of the Louisiana Horsemen’s Benevolent and Protective Association, based on concerns that the racing industry would be “destroyed” by the bill.

“Obviously, I have no problem with the [scholarship] program, but this will kill horseracing in Louisiana,” Fenasci said. He cited a recent economic study commissioned by state horsemen that contended that the racing industry generates $73 million in direct and indirect taxes to the state’s general fund.

“You’re going to have to find a way to replace all that economic activity after you destroy our industry,” Fenasci said.

The bill is sponsored by Jay Morris, a Republican representing the 14th district in Louisiana, which is located in the rural northern part of the state.

The bill does not target any of the revenue generated by the casinos for their corporate owners, and would apply only to the four racetracks that operate casinos in the state. The casinos are all owned by large publicly traded companies. Fair Grounds is owned by Churchill Downs Inc.; Delta Downs and Evangeline Downs are owned by Boyd Gaming; and Louisiana Downs is owned by Caesar’s Entertainment.

A number of states have targeted racing subsidies for reductions over the past several years as states grapple with budget deficits created by the recent recession and as anti-tax and anti-government lawmakers have made inroads into state legislatures.

Technically, the bill would reduce the percentage of gross revenue from racetrack slot machines going to horsemen from 18 percent to 9 percent. It would also reduce the percentage from video poker machines going to horsemen from 20 percent to 10 percent.