New York Senator Questions Spending on Racing

A measure giving flexibility to the financial operations of the New York State Thoroughbred Breeding and Development Fund passed by a comfortable margin in the state Senate the week of March 22, as it has every year since 2010.

This year, however, questions were raised during a floor debate that could create debate in the coming year over the fund's finances and the issue of how racetrack gaming proceeds are divvied up in New York. The question is whether to keep renewing a measure supports believe helps promote the Thoroughbred breeding industry in New York, but originally it had been due to expire at a certain point after the opening of Resorts World Casino at Aqueduct Racetrack.

After a colloquy with a colleague on the Senate floor, Senate Racing and Wagering Committee chairman John Bonacic, the measure's sponsor, said: "I hear your comments, and it's something we'll look at in the next 12 months when we look at this again."

The measure, passed each year by lawmakers and signed into law by two different governors, maintains the fund's allotment for breeder awards at 65% and also increased by 1% to 6% the amount of money for the promotion of breeding and raising Thoroughbreds. The law also allows the fund to provide 5%, instead of 4%, for administrative expenses.

The state breeding fund, a public benefit corporation, is funded by a percentage of pari-mutuel revneue.

But Sen. Liz Krueger, a Manhattan Democrat, said during a floor debate March 23 that she is "wondering why the industry can't pay for itself at this point." Krueger said it's time the state increase the allotment that, in particular, Resorts World pays to the state from video lottery terminal earnings.

Krueger's concerns over VLT proceeds have been voiced in prior years.

The state's share of 44%, under the constitution, goes toward public education. The rest of the VLT proceeds go into different pots, including money for Resorts World, purses, and administrative costs at the state Lottery Division that runs the racetrack-based VLT program.

"More of the money ought to be going to education," Krueger said.

She then said she wasn't trying to halt VLT proceeds being steered to the racing industry, but that current levels should be reduced.

"We created VLT entitlement to racing, in theory, to strengthen what was happening in our horse racing industry and to bring more money for education," Krueger said. "It's time to re-evaluate (why) more of the money isn't going to public education."

Bonacic said the measure is needed to maintain the state's breeding program and Thoroughbred racing.

"I think you're trying to make the point that maybe we shouldn't be investing in the breeding program," he said.

The breeding fund distributes breeders' awards, helps market the industry, and runs the registration process for foals and stallions. The debate between Krueger and Bonacic was chiefly over the flow of funds from racino proceeds to the industry. The bill, however, does not involve VLT proceeds, but sets the levels at which the breeding fund allocates money each year.

The current breeding fund law expires Oct. 28, the fourth anniversary of the opening of Resorts World. The measure the Senate passed—it still requires approval by the Assembly—would extend the law for another year.

Bonacic said he would examine Krueger's concerns, but said  VLT revenue that goes to the New York breeding industry has made it "probably the best in the world."

"This is an industry we want to keep strong. We do not want to see it deteriorate,'' Bonacic told Krueger of the Thoroughbred breeding industry.

The measure ended up passing 58-2, with Krueger among the "yes" votes.