New England Horsemen Fight for Funding

With the Race Horse Development Fund, which was created to give the struggling Massachusetts horse racing and breeding industry a lifeline, now in serious peril, Thoroughbred horsemen traveled to the state capitol in Boston to lobby lawmakers June 7.

"We went to the Statehouse and dropped off flyers and informational material for all the senators and representatives," said trainer Kevin McCarthy, a member of the New England affiliate of the Horsemen's Benevolent and Protective Association. "We need to show them why this fund is vital to our industry." 

At issue is $15 million currently in the RHDF, which was established as part of Massachusetts' 2011 expanded gaming legislation and is fueled by 5% of the licensing fees and a a percentage of the revenue from one stand-alone slots parlor and would add up to three destination resort casinos that are in the construction process.

The slots parlor at Plainridge Park Casino, which opened June 15 and is the state's only Standardbred track, contributes 9% of gaming revenue, The future casinos will each kick in .625% of their gross gaming revenue. Of the RHDF totals, 80% is designated for purses, 16% goes to breeders, and 4% is allocated to backstretch welfare.

Originally, the RHDF was split 75%-25% Thoroughbred to Standardbred, but with Suffolk Downs reduced to just six days of live racing per calendar year, the share was shifted 55%-45% in favor of the harness horsemen.

Through April, which is the latest data available from the Massachusetts Gaming Commission, $26,637,098.81 has been generated in total, before distributions. But there has been an outcry from many in the public and private sectors that the money raised from the expansion of gambling would be better spent elsewhere.

The mechanism to remove funding for the RHDF is a line item in an amendment to Senate Bill 2076, the upper body's version of the state budget bill. The budget bill now sits in a conference committee comprised of three state senators and three state representatives  

"I had some private meetings at the Statehouse today," said, Bill Lagorio, president of the Mass. Thoroughbred Horsemen's Association, which splintered from the NEHBPA. "They have their hearts set on making a sweep. Their contention is it's a one-year sweep, but that's an oxymoron because once they take away our money, we'll never get it back."

The Senate line item would redirect the $15 million in the RHDF to the Massachusetts Department of Conservation and Recreation and the Department of Environmental Protection.

"Those are not revenue producers. My argument with them is that if you let the Race Horse Development Fund work, it will all fall into place," said Lagorio.

As Lagorio made the rounds, he was armed with the independent economic study done by Christiansen Capitol Advisors and commissioned by Suffolk Downs when its ownership group was one of two finalists for the single Boston area casino license. 

In September 2014, the Massachusetts Gaming Commission rejected the proposal of Suffolk Downs gaming partner, Mohegan Sun, in favor of Wynn Resorts, which is developing a $2 billion casino project located two miles from the track's stable gate. Immediately following the MGC's verdict, Suffolk Downs announced live racing was no longer economically feasible and now runs six days per year.

"The stats in the study are simple. Within two years, we'd put in about $14 million in taxes and fees. My point is if you let it work, you'll realize all of what you're trying to take away and then some while supporting a projected 3,000 jobs and preserving 6,600 acres of Thoroughbred farmland. It will give you a return," said Lagorio. "They (the state) is responsible for us not being able to use the fund and now they want to take it away. Give it a chance."

Brian Hickey, the NEHBPA's lobbyist, said that the group is fighting as hard as possible to keep the RHDF in place in its intended form.

"The problem is that in the view of some legislators, there is not enough Thoroughbred racing to use that money," he said. 

To remedy that situation, the NEHBPA board of directors is moving ahead with plans to develop a new non-profit, state of the art, equine center and horse park that would be run by horsemen for horsemen and include a one-mile main track and turf course to restore full-time racing in the Commonwealth.

"We need that money to pay for the soft costs of the horse park and to fund purses. We can certainly use that money. With the casinos coming online, we anticipate that fund will grow at $1 million per month. It would be awfully nice to have that money in the fund to help pay for all  the architectural, civil engineering, traffic and other studies that are necessary for the siting of the horse park. Losing that money would be a big blow. A big blow," said Hickey.

With July 1 the deadline for the state budget bill to be passed, the conference committee is set to meet in the very near future to hammer out the final details.

"The hope is the House does not adopt the Senate amendment," said Hickey, who added he would meet on the evening of June 7 with House Speaker Robert DeLeo (D), who has long been an ardent supporter of the racing industry.

In related news, at a meeting of the Massachusetts Gaming Commission on June 8, Suffolk Downs will formally request a multi-million dollar distribution from the RHDF to help cover purses for the upcoming live meet. The request is the same as the ones granted in 2015 and 2016 that allow the track to distribute an average of $500,000 in daily purses and cover some of the meet's operating costs. 

The 161-acre Suffolk Downs racetrack grounds was sold to a real estate development company for $155 million in recent weeks. The new owners have no interest in racing or simulcasting so the track will lease back that end of the operation for $20,000 per month while the property is being converted to a multi-use project.