HARRISBURG -- A proposal by Gov. Tom Wolf to redirect about $200 million a year in subsidies to the horse-racing industry has the backing of animal rights and school funding proponents, but faces stiff opposition from the horse racing industry, the agricultural industry lobby and rural lawmakers.
Wolf first proposed shifting the horse-racing subsidy to other uses in 2020. In this year’s budget, unveiled in February, he repeated that call and suggested that the money should be used to fund scholarships for students to attend one of the 14 universities in the State System of Higher Education.
“When you think about it, when you support a college student, that person’s going to live another 50 years and be a productive member of society. These horses are around for 3-4 years and then they are gone,” said Sharon Ward, a former Wolf administration official who authored a report released on May 2020 examining the horse racing fund. She called it a "bad use of tax dollars.”
That report noted that despite the state subsidies, public interest in horse racing has been consistently waning.
“In 2018, the subsidy of $240 million was almost five times the amount wagered by Pennsylvanians on races run on Pennsylvania tracks,” that report found. “Average daily attendance for the Williamsport Crosscutters minor league baseball team is greater than attendance at any of the state’s six horse tracks,” according to the report.
Shannon Powers, a spokeswoman for the Department of Agriculture, said that since the horse subsidies began more than 15 years ago, ”the Pennsylvania racing industry has received nearly $3 billion that goes primarily to horse owners; in fact, 80% of the money goes to purses, which goes directly into the pockets of the owners, trainers and jockeys of the horses,” she said. “This, unfortunately, incentivizes owners to keep running horses frequently, even if it's not in the best interest of the horses,” she said.
An online petition launched by the animal rights group Horseracing Wrongs has gotten 37,000 signatures from people calling on the state to stop subsidizing the industry.
Patrick Battuello, president of Horseracing Wrongs, said that he thinks horse racing should be as taboo as dog racing. He’s convinced that if the state would stop providing subsidies the state’s six horse tracks would go out of business.
“As long as they are getting corporate welfare, they are going to continue merrily along,” he said.
But lobbyists for both the horse racing industry and the farm industry say they are opposed to any move to cut the subsidy for horse racing. Both said that Wolf’s plan doesn’t seem to be getting substantial support at the Capitol.
“We are opposed to diverting money from the Race Horse Development Fund to be used for non-agricultural purposes. The investments made through the fund play an important role in supporting Pennsylvania's equine sector and family farms throughout the state. In addition to horse breeders, many farms that produce hay and straw for the equine market also benefit,” said Liam Migdail, a spokesman for the Pennsylvania Farm Bureau. “This was proposed last year and did not gain much traction in the General Assembly. We do not expect that it will get very far this year either,” he said.
The horse racing subsidy dates to the state’s expansion of slots in casinos, said Pete Peterson, president of the Pennsylvania Horse Racing Association.
“As part of the negotiations, the track operators said ‘We understand this is going to impact the amount of money bet on horse racing so we’ll give you a portion of the slots money to go for purses and breeders’ incentives.’ So that’s what they did,” Peterson said. “That’s what brought a lot of rural legislators to be OK with expanded gaming because it helped expand the impact of it to the rural areas to help the agricultural industry,” he said.
At a budget hearing for the Department of Agriculture, state Sen. Joe Pittman, R-Indiana County, grilled Agriculture Secretary Russell Redding on the potential impact of cutting the subsidies.
“The business model, whether we like it or not, has been built on based on that trust fund” supplying the subsidies, Pittman said.
Peterson said that horse racing’s impact stretches far beyond the horse tracks, with the horse breeders and trainers buying supplies from local farms.
Brian Sanfratello, executive secretary of the Pennsylvania Horse Breeders Association, said that criticism that horse owners may live out-of-state is misguided because of the economic impact of the industry in the state.
“The horses are being trained by Pennsylvania trainers. They are buying feed from Pennsylvania avenues. They are buying hay from Pennsylvania farms. Do you think Wolf would worry if some big company, some huge company came into Pennsylvania and hired 10,000 people, paid their pension benefits, paid their health insurance? Do you think they would care? Pay taxes in Pennsylvania? Do you think they would care if they were in California? That doesn’t hold water,” Sanfratello said. “He came out a week or two ago and said ‘We have to make sure the agricultural industry thrives because it’s an integral part of the state. And he’s trying to kill the horse industry which is in ag?”
Ward said that some horse tracks might close if the state stops subsidizing the industry but she said it’s not clear that they all would.
“If you have a market for any product, your market is based on interest. The industry would exist in a way that’s based on the number of people who are interested in it. I think it’s likely that given the lack of interest and the steady decline in interest, there might be fewer tracks,” she said.
“That’s up to that industry to figure out what its customer base. Our work is not to end racing, it’s to end the subsidies. We don’t think they are a good use of money,” Ward said.
Susan Spicka, executive director of Education voters of Pennsylvania, said that she thinks the effort to redirect the horse-racing subsidies hasn’t picked up more steam because few people are aware that the subsidies exist.
“This has happened under the radar, most people don’t even know it’s going on. The horsemen have been able to keep their secret. It’s a conversation we should have as a Commonwealth. Should this money be spent on purses for winning horses or should we do something to invest in Pennsylvania’s future and reduce the debt load of college students,” Spicka said.