Massachusetts Sets Gaming Splits for Racing
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By Lynne Snierson
The Thoroughbred industry in Massachusetts will receive the lion's share of future expanded gaming revenue to be collected and allocated by the Race Horse Development Fund after the Massachusetts Gaming Commission endorsed the recommendation of its Horse Racing Committee at a public hearing Sept. 4.
The funds will be split 75% to the Thoroughbred industry and 25% to the Standardbred industry. Of each share, 80% must be dedicated to purse accounts, with 16% going to breed development and 4% for backstretch welfare.
In a 21-page report prepared and submitted to the committee by the New England Horsemen's Benevolent and Protective Association and the Massachusetts Thoroughbred Breeders Association in October 2013, horsemen provided statistics that indicate the Thoroughbred industry in the state generates 90% of the state's horse racing revenue, compared with 10% by the Standardbred industry.
In March 2014 committee hired Dr. Margaret Ray to review all of the statistical data from Massachusetts pertaining to both breeds. Ray conducted an economic analysis and recommended in her report to the committee that 85% to 90% of the RHDF be allocated to the Thoroughbred industry, with the rest going to the Standardbred industry.
The state's 2011 expanded gaming law to authorize development of one stand-alone slot machine facility and a maximum of three full casinos protected both breeds by designating they in total receive 5% of the license fees of $25 million for the slots parlor and $50 million for each of the casinos, 9% of the slots revenue, and 0.625% of the combined gross gaming revenue from the casinos.
The MGC awarded the slots license Feb. 28 to Penn National Gaming Inc., which then executed a purchase and sales agreement on the state's only harness track. The new $225 Plainridge Park Casino is slated to open in June 2015.
The western Massachusetts casino license will go to MGM. The sole Boston-area casino license will be given to either Mohegan Sun, which wants to partner with Suffolk Downs to build and operate a $1.3 billion casino on the grounds of the 79-year-old track, or to Wynn Resorts, which plans a $1.6 billion casino development only two miles from the barn area at the track.
The owners of Suffolk Downs, the last Thoroughbred track in the region, have stated it will no longer be economically feasible to continue live racing if Mohegan Sun is unsuccessful in its bid.
In response to that possibility, the MGC will move forward with the committee's Sept. 4 recommendation to draft regulations concerning the funds in case "one of the breeds is no longer racing due to lack of racing facilities." The committee recommended that under that scenario the Thoroughbred horsemen's 75% allocation will be held in escrow for three fiscal years to allow for and encourage development of a new racetrack in the state.
On Sept. 8 the MGC will begin weeklong deliberations on the final proposals by Mohegan Sun/Suffolk Downs and Wynn Resorts, with a final decision scheduled to be made Sept. 12.