05/01/2014 1:52PM

Pennsylvania Race Horse Development Fund audit report expected this summer

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Pennsylvania’s auditor general is in the midst of an audit of the state’s Race Horse Development Fund, which has distributed approximately $1.5 billion in slot machine subsidies to the state’s trainers, horse owners, and breeders over the past decade.

The audit is expected to be released this summer, according to a report in the Pittsburgh Tribune-Review, whose editorial board met with Eugene DePasquale, the auditor general, Wednesday. DePasquale told the editorial board that “for a whole different host of reasons, I think there’ll be a lot of interest” in the result of the audit, according to the newspaper.

The Race Horse Development Fund, which distributed approximately $250 million in subsidies last year from an 11 percent cut of slot machine revenues from the state’s casinos, has been a political target for the past several years as Pennsylvania has sought to address lingering budget deficits and as some lawmakers have sought tax relief for homeowners, pledging to use proceeds from the fund to make up for the tax cuts.  

Four years ago, the Pennsylvania legislature passed bills allowing for the diversion of approximately $50 million each year from the fund to the state’s budget.

Under Pennsylvania law, the state’s horsemen’s groups must provide annual audited reports covering distributions from the fund. In addition, in the past two years, the state legislature has ordered audits of racetrack-casino owners and the Pennsylvania Gaming Control Board. None of those audits have produced any allegations of mismanagement, according to an official of a horsemen’s group who spoke on the condition of anonymity so as not to antagonize officials conducting the audit.

“They’ve all shown that the horsemen’s organizations have operated properly and are good stewards of the funds they receive,” said the official.

DePasquale is a former Pennsylvania legislator. He told the newspaper review board Wednesday that the fund was set up to “save the horse racing industry.”

“Whether people like that or not, that is what it was supposed to do,” he said. “Our audit will hopefully shed some light on some of those issues.”
DePesquale’s office did not return phone calls Thursday.

Pete Peterson, a spokesman for the Pennsylvania Equine Coaliton, a lobbying group supported by the state’s horsemen’s and breeders’ groups, said that “he did not want to speculate” on the intention of the audit.

“We believe the racing industry has an important role to play in this state,” Peterson said.