Something called the Pennsylvania Race Horse Development and Gaming Act was passed in 2004 and, ever since, it's been Christmas Day 365 days a year for the racing industry in the Keystone state. With profits pouring in from slot machines at the state's racetracks, Pennsylvania racing has been fat with money. The purses are terrific, the breeding industry is booming, the tracks are making a fortune. An industry once struggling to survive has become a runaway success, and just about everyone involved has been ecstatic that the marriage between slots machines and horse racing has worked so well.
The exception is a handful of local politicians, and now they are threatening to turn out the lights and tell the industry the party's over. They want $100 million from the money that is supposed to go to harness and thoroughbred racing in the state. For Pennsylvania racing, and racing in every state that has slot machines, this is a story worth watching. The results could be disastrous.
Pennsylvania, like virtually every other state in the country, is saddled with a huge budget deficit, in this case about $3.2 billion. A possible partial solution floating through the corridors of the capitol building in Harrisburg is to go after a sizeable chunk of the slots money that is turned over each year to the horse racing industry. The logic: what's more important, horse race purses or having enough money for the state to function properly?
Pennsylvania isn't the first state to contemplate reducing racing's share of the profits from slot machines, but never before has such a mammoth cut been proposed. For now, it's merely an idea that has been tossed around by certain members of the state's Republican Party, but it's hard to imagine the proposal not picking up steam. The state needs money and horse racing is an easy target. Outside the very narrow world of the racetrack, who's going to care that the allowance race now going for $43,000 at Philly Park gets sliced down to $20,000?
A lot of people seem to like the idea, including the editors at the Philadelphia Daily News. Noting that $419 million has gone to horse racing since the passage of the Pennsylvania Race Horse Development and Gaming Act, the paper recently ran an editorial which opined: "But if you're a child whose Head Start funding is about to be cut ... or a parent who has kids in public schools ... or a senior citizen facing cuts in health-care coverage, all of which the Senate-proposed budget would affect, maybe it's time to be a little less generous to the horse-racing industry."
Now, the Pennsylvania horse racing industry could be faced with trying to convince legislators that the sports simply cannot do without the money. Their argument won't be without considerable merit. In 2008, $155 million in purse money was paid out at the state's harness and thoroughbred tracks. Some of that came from betting handle, but the real money came from slots. Take $100 million away from that and what's left?
"This would be devastating to the state's horse racing industry," said Ed Kobesky, the director of media and marketing for the Pennsylvania Harness Horsemen's Association. "It would be absolutely devastating. The sad part of this story is that (the Pennsylvania Race Horse Development and Gaming Act) is a piece of legislation that is working; it's doing its job. It's creating jobs and attracting investment. Depending upon who you talk to, Pennsylvania harness racing is the best in the country."
The problem with slot machines is that they create a system of haves-versus-have-nots. Should the Pennsylvania tracks lose the $100 million (no one is quite sure if this would be a one-time hit or an annual raid on racing purses), the purses would plummet and horses, trainers, owners and breeders would no doubt leave for racing states that have more to offer. Pennsylvania racing would never again be the same.
The real danger is that this could become bigger than just Pennsylvania horse racing. Let this happen in Pennsylvania and politicians in New York, West Virginia, Delaware, Florida and the like are sure to pick up on the idea. And they'll have an easier time picking horse racing's pocket if some other state does it first. How will racing fight back and might it be faced with a battle it cannot win?
That horse racing has been artificially propped up by slot machines and has been able to offer astronomical purses at a time when interest in the sport has flat lined always seemed to be too good to be true. Will a $100 million hit in Pennsylvania be the beginning of the end of racing feeding at the slot machine trough? Stay tuned.
Bill Finley is an award-winning racing writer whose work has appeared in The New York Times, USA Today and Sports Illustrated. Contact Bill at firstname.lastname@example.org.