Proposed Changes in PA-Bred Fund Questioned

The head of the Pennsylvania Horse Breeders Association July 1 said legislation that would alter the Thoroughbred breeding fund isn't workable because the proposed percentages could greatly reduce restricted races and owners' bonuses.

The bill, which passed the state House of Representatives June 30 on a 193-2 vote, was sent to the Senate Rules and Executive Nominations Committee as the 2016 regular session neared an end. Breeders' awards haven't been paid for months because language in a horseracing reform bill that became law in late February was deemed problematic by the Pennsylvania Department of Agriculture, which oversees racing and breeding in the state.

A department spokeswoman said payment of the awards hinges on action by the state General Assembly.

PHBA president Brian Sanfratello said language as amended by the House would require a shift of about $5.2 million to breeders' awards, which would leave "little or no money" for more than 400 state-bred races and owners' bonuses. He said negotiations on the House bill continue in the Senate.

Under the bill that passed the House, awards to breeders of Pennsylvania-breds sired by Pennsylvania stallions that finish first, second, or third would jump from 30% to 50% of the purse. Similar awards for Pennsylvania-breds by out-of-state stallions would increase from 20% to 30% of the purse. Bonus money for the owners of Pennsylvania-based sires whose progeny finish first, second, or third would remain at 10%.

"We already receive about $13 million (each year) for the Pennsylvania-bred program from both horsemen's organizations in the state," Sanfratello said. "They cannot put out any more money; they can't absorb that $5.2 million. They'd have to cut purses. The bottom line is if we have to pay that $5.2 million, there would be no money left for restricted races and owners' bonuses."

Supporters of the language passed by the House said the impact wouldn't be that dramatic because the number of Pennsylvania-breds has declined substantially in recent years, so breeders' award money that is paid has dropped in tandem. They also said there would be sufficient funding for owners' purse bonuses.

Roughly $17 million for the Thoroughbred breeding incentive program, which totals about $30 million when contributions from purse accounts are included, comes from slot-machine revenue at the state's casinos as mandated by the 2004 law that authorized gaming in Pennsylvania. Lawmakers on multiple occasions have dipped into racing's share to cover other budget needs and have questioned whether a large percentage of the program's money is going out of state rather than being used to grow Pennsylvania breeding and agriculture.

It's an issue that has cropped up in other states with restricted programs.

Sanfratello also said any program that would lower the 40% owners' bonus for Pennsylvania-breds that finish first, second, or third in races at Parx Racing—the percentage is lower at the state's other two tracks—would impact the value of state-bred racehorses.

"If there are no owners' bonuses, what about the 50% of the people who sell horses?" he said. "We look at the total and complete program."

The House bill also would permit the Pennsylvania Horse Racing Commission, which falls under the Department of Agriculture, to contract for administration of the breeding fund with an organization other than the PHBA.