04/19/2007 11:00PM

Slots revenue fueling an equine gold rush

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The gold rush is under way for people breeding Thoroughbreds in Pennsylvania, as well as racing them.

"Distribution from the Pennsylvania Breeding Fund in 2007 is expected to be between $14 million and $15 million," said Mark McDermott, executive secretary of the Pennsylvania Horse Breeders Association. "That's roughly double the amount that the fund paid out in 2006. But it's not even close to the figure that will be offered for Pennsylvania-breds when all of the slots sites are up and running."

In the future the fund is projected to offer $25omillion or more annually.

Pennsylvania currently has four operating slots facilities - Philadelphia Park, Presque Isle Downs, Mohegan Sun at Pocono Downs, and Harrah's Chester Downs. Their combined handle so far in 2007 is close to $2.5 billion. Eventually, the state will have as many as 12 slots sites (seven racetrack and five stand-alone), all of them generating revenue for the racing industry. The law calls for each site to contribute 12 percent of its gross terminal revenue to the Race Horse Industry Development Fund. The Development Fund distributes percentage shares back to each racing facility, with the amount based on the facility's level of contribution to the Development Fund.

Disbursements to Thoroughbred tracks are divided 80 percent to purses, 16 percent to the Breeding Fund, and 4 percent for horsemen's health, benevolence, and pension programs.

The PHBA recently unveiled a schedule of 35 statebred-restricted stakes for 2007, highlighted by the seventh annual Pennsylvania's Day at the Races, to be run July 28 at Philadelphia Park with 10 stakes worth nearly $1 million in purses. Pennsylvania's Day at the Races will feature the inaugural running of the Smarty Jones Classic, named for the Pennsylvania-bred who just missed winning the 2004 Triple Crown. With a purse of $125,000, the Smarty Jones Classic, for 3-year-olds and up ato1o1/16 miles, will be Pennsylvania's richest statebred race.

Adding further interest to the Day at the Races will be the state's first stakes restricted to horses who are both bred and sired within Pennsylvania.

Four races - two six-furlong sprints and 1 1/16-mile contests on both dirt and turf - are in that category. The races are worth $100,000 each and are named for stalwart Pennsylvania sires Northern Fling, Ga Hai, Captain My Captain, and Nepal.

The statebred stakes program for 2007 is worth a total of $2.6 million, up from $700,000 in 2006. But Pennsylvania traditionally has maintained a strong program for statebreds competing at allowance and claiming levels, and the new riches can be found there in abundance as well. Breeder awards, paid for all races at Pennsylvania tracks, equal 30 percent of the purse share for runners both bred and sired in the state, and 20 percent for those bred in the state but sired elsewhere.

In addition, statebreds earn owner bonuses equaling 40 percent of the purse share at Philadelphia Park and 30 percent at Penn National. Boosting a Pennsylvania -bred's earning power still further, the owner bonus is considered as part of the horse's purse earnings when the breeder bonus is calculated.

Thus, a Pennsylvania-bred and-sired runner who wins a race at Philadelphia Park with a $20,000 winner's purse share generates $28,000 for his owner ($20,000 plus an $8,000 owner bonus). The breeder receives a an additional award of $8,400 (30 percent of $28,000). Stallion awards are also paid for in-state sired runners, and are based on 10opercent of the breeder award.

Seeking to derive the maximum benefit for the state's economy, the PHBA has tightened rules for Pennsylvania-bred eligibility. Mares are now required to reside in the state from Nov. 1 through foaling (Oct. 1 for foals of 2008 and beyond), or be bred back to a Pennsylvania-registered stallion and remain in the state for 90 days after foaling, in order for a foal to be eligible for statebred registration.

More than 1,400 broodmares were certified as residing in Pennsylvania as of last November's deadline, according to McDermott. And the number of certified mares will increase, as those being bred back to Pennsylvania sires are added to the total.

"We expect a big jump in this year's Pennsylvania foal crop," added McDermott. "Based on information contained in the [broodmare] domicile reports, it's projected to be in the range of 1,400 to 1,500. That represents a 50 percent increase from two years ago."