Pennsylvania racing hit by budget cut

Horsemen in Pennsylvania are facing tighter times in the future after the state legislature passed a budget Friday reducing racing and breeding subsidies from slot machines by 17 percent.

The reduction, from 12 percent of the gross revenue from the machines to 10 percent, will likely translate into at least a $30 million reduction of the subsidies annually, provided gambling revenue in the state remains steady. Last year, Standardbred and Thoroughbred horsemen and breeders in the state received $194 million in subsidies from slot machines, a figure that would decline to $160 million if slot-machine revenue remains at the 2008 level of $1.6 billion.

The reduction comes at a time when handle in Pennsylvania on Thoroughbred races is declining significantly, making horsemen at Thoroughbred tracks more reliant on the subsidies to generate purse revenues. According to the Pennsylvania Gaming Control Board, betting in Pennsylvania on Thoroughbred races dropped 15.4 percent, or $119 million, from 2006 to 2008. Partly as a result, slot-machine subsidies in 2008 generated 77 percent of all the purses distributed in the state, up from 64 percent in 2007.

Mike Ballezzi, the executive director of the Pennsylvania Thoroughbred Horsemen's Association, said in a recent statement he had released in opposition to the budget provision that the reduction will cut subsidies at Philadelphia Park by $8 million a year. As a result, horsemen at Philadelphia Park may have to support a 10-day cut to live racing days at the track, from 210 days to 200, and also may need to support purse cuts for several rich stakes races, such as the $1 million Pennsylvania Derby.

"These cuts are going to have a major impact on the types of events we will be able to take part in at Philadelphia Park," Ballezzi said in the release. He did not return phone calls Monday.

Pennsylvania's legislature passed the budget late Friday night, 101 days late. In addition to the reductions in racing-industry subsidies, the budget includes dozens of measures to reduce the costs of state government and raise extra revenues in order to deal with a projected budget deficit for the 2009-2010 fiscal year.

The legislature also is considering a plan to legalize table games such as blackjack, poker, and roulette. A bill authorizing the games was passed by the Senate on Friday, and it was expected to go to a vote in the House either late on Monday or Tuesday. The legislation would not dedicate any revenue from table games to horsemen or breeders.