Committee Recommends Change to Massachusetts Fund

The Massachusetts Gaming Commission's Horse Racing Committee has recommended that the split of the state's multimillion-dollar Race Horse Development Fund be revised again to continue to decrease the share awarded to Thoroughbred horsemen and increase the Standardbred industry's allotment.

By a vote of 4-1 and following two hours of heated discussion at an Oct. 18 hearing in Boston, the HRC endorsed changing the ratio to 60%-40% in favor of the Standardbred horsemen from the current 55%-45% Standardbred-Thoroughbred ratio. Then with a separate and subsequent motion, there was a vote to make the change retroactive to Jan. 1 of 2017.

The lone dissenter on the panel was attorney Frank Frisoli, who represents Thoroughbred owners, trainers, and breeders and advocated to maintain the status quo. The Standardbred stakeholders' representative, attorney Peter Goldberg, voted with the majority on both motions.

The next step is for the MGC legal department to send the recommendation to the state legislature, which has 30 days to review it and send it back to the commission. If the commissioners do not agree with the proposal, it would need to go back before the committee.

Whether the split is retroactive is a separate matter. When the new percentages recommendation goes before the MGC, it will have to decide whether it should be retroactive.  

It was the second time in two years that the HRC has recommended stripping money from the Thoroughbred horsemen's account.

The original splits from the RHDF, which was established in the Massachusetts expanded gaming legislation of 2011 and is funded by a share of license fees and revenue from the state's burgeoning casino industry, were established in 2015 and had 75% of the revenue directed to the Thoroughbred side and 25% to the Standardbred industry.

In 2016 the committee changed the ratio to its current 55%-45% split, with the action retroactive to Jan. 1 of that year, and the gaming commission concurred.

By law the RHDF allotment for both breeds is divided 80% to purses, 16% to breeders, and 4% to backstretch welfare programs. Since two full casinos and one stand-alone slot machine facility were licensed by the MGC—followed by the June 2015 opening of the slots parlor at Plainridge Park Casino, which is home to the state's lone harness track—millions of dollars for horsemen have gone into the fund.

The MGC reported the total raised is $33,198,564 through Sept. 30. After disbursements to the horsemen in 2015-17, there is roughly $12 million in the RHDF at stake currently, although the amount changes every week, as revenues from the slots facility fluctuate and payments are made. The two casinos are still under construction.

New England Horsemen's Benevolent & Protective Association president Anthony Spadea Jr. was irked by the committee's latest move to again cut the Thoroughbred industry's share.

"I am not pleased, naturally," he said. "Another reduction only harms the ability of the Massachusetts breeders to get new people into the industry, so that we have the basis of Thoroughbred racing in our region. This is extremely harmful, because the minute you set up a racing program and your revenue is changed, and the minute that they go retroactive again, people get discouraged and don't breed horses."

Goldberg did not respond to requests for comment, but the Standardbred horsemen contended that since Plainridge Park had 125 days on the 2016 live racing calendar whereas Suffolk Downs, the state's lone Thoroughbred track, raced only six days, their industry is entitled to the larger share.

The Thoroughbred horsemen offered a full-throated disagreement.

"They ran 125 days and we had almost the same live total handle running just six days in 2016," said NEHBPA executive director Paul Umbrello. "Our total on-track handle was $1.1 million and theirs was $1.5 million. And again, that's six days versus 125 days overall.

"The (criteria for RHDF distributions in the state racing) statute talks about live handle and the number of employees. We know for a fact—and this is on the public record—that the Thoroughbreds have issued more occupational licenses, more W-2s,and more 1099s for six days of live racing at Suffolk than the Standardbreds did for 125 days of live racing in 2016. When you read the statute, it doesn't say anything about the number of live racing days."

In hopes of securing the lone Boston-area full-casino license, Suffolk Downs partnered with casino industry titan Mohegan Sun and unveiled a $40 million Racing Improvement Plan in 2013. But the MGC passed them over in September 2014 and gave the license to Wynn Resorts, which is developing a $2 billion project only two miles from the Suffolk Downs stable gate.

As a consequence Suffolk's ownership group determined that live racing was no longer economically viable and cut the schedule back to six days in 2015-16. In 2017 two days were added, but management applied to the MGC for a six-day meet in 2018, as the property has been sold to a major real estate developer. The 2018 meet will be the last at Suffolk Downs.

The MGC has agreed to allow some Massachusetts-bred races to be run out of state and the RHDF funds the purses for them. Currently there are horses bred in the Bay State competing at Finger Lakes in upstate New York and earning checks.

"We get some help when we race out of state, but people—and especially those on the commission—don't understand that, no matter where a Mass-bred runs, 99% of the owners of those Mass-breds are still Massachsuetts residents. They live here, work here, pay their taxes here, and pay their bills here to maintain their mares and young horses, their stallions, and their farms. Without this money there is no other way to do this" Spadea said.

Umbrello was more pointed in his assessment.

"This change in the splits is just crippling and it's a shame," he said. "It's sad that when horsemen should be helping horsemen, (the Standardbred horsemen) try to put us out of business."

The NEHBPA continues to work on securing the funding and legislative approval to construct a new Thoroughbred racetrack and year-round equine center in another part of the state.

Umbrello, noting that the RHDF was established as part of the expanded gaming legislation to help racing and breeding for both breeds survive and thrive in Massachusetts, implored the gaming commission to give the Thoroughbred horsemen the opportunity to move the horse park  forward so they get back on their feet and run full meets.

"The gaming commission should assure us that money is protected for us. Help us. Protect us. That's why the statute was written," he said.