Updated on 02/09/2012 12:12PM

Pennsylvania governor proposes cutting casino subsidy to racetracks

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A budget prepared by Pennsylvania Gov. Tom Corbett has proposed that the state use $72 million in casino subsidies to the racing industry in each of the next three years to pay for agriculture projects.

The proposal would reduce the amount of money that annually goes to the racing industry by about 25 percent. In the last complete fiscal year, horsemen and breeders in Pennsylvania received $275 million in purse subsides and breeding awards, according to records maintained by the Pennsylvania Gaming Control Board.

The Pennsylvania Equine Coalition, a consortium of Thoroughbred and harness organization, said it would fight against the proposal, which is part of a $27.1 billion budget that includes massive cuts to higher education and no new taxes. Pennsylvania, like most states, is facing severe budgetary problems due to the impact of the recession and significant statutory increases in mandatory spending for pensions and health care.

Under current statute, racing receives 12 percent of the net revenue from racetrack casinos as subsidies, while getting 6 percent from non-racetrack casinos. Since casinos were legalized in 2004, the racing industry has received nearly $1 billion in subsidies from casinos.

Todd Mostoller, the executive director of the Pennsylvania Horsemen’s Benevolent and Protective Association, said that the Pennsylvania Equine Coalition would seek to “educate” lawmakers about the importance of the racing industry to the state’s agriculture sector as negotiations proceed on the budget. By law, the budget must be passed by June 30, but the negotiations frequently extend beyond that deadline.

“People have invested millions of dollars in the industry because of [the subsidies provided by casinos],” Mostoller said. “It needs to be allowed to blossom.”

Pennsylvania’s proposed clawback in racing subsidies joins measures recently introduced in several other states, including Indiana and Maryland, that would use casino subsidies that accrue to the racing industry to fund other projects.