By Dick Morris
WECONNECT.DOTS: Actually this 1969 American drama film directed by the great Sidney Pollack, nominated for nine Oscars, had nothing to do with the destruction of our most beautiful animals.
That dastardly deed has apparently become the goal of PA Republican Gov. Tom Corbett and his cohorts in the General Assembly. (A few Democrat lawmakers, however, are on the same page. It is also an election year.)
The Governor and lawmakers want to begin peeling off proceeds from casinos that have been allocated to horseracing. They want to re-direct the funds to public education, a critical need. Right place for more funds, but wrong source.
This story really begins in 2003 when newly elected Democrat Gov. Ed Rendell decried so many PA residents traveling to out-of-state casinos and enriching the tax coffers of those regions. Before the first spin of a slot machine within Keystone borders, however, he needed to get by a Republican-controlled state Senate.
The plan called for – not just casinos, but – “racinos,” where gamblers could bet on horse racing as well. The pitch here was to re-invigorate an industry in decline.
Before “racinos,” horse tracks were dying. Purses were too small to attract top steeds and the tracks remaining open were examples of “equestrian blight.”
Nobody denies horseracing has always been a rich man’s game. At least until the saga of California Chrome, a horse bred, trained and raised to a $10 million pot-of-gold by a middle class owner. Even wealthy owners, however, are not going to invest big bucks, then enter their horses in races with miniscule purses.
Rendell’s idea was to achieve two benefits. First was to generate a lucrative source for tax monies needed by a cash-poor state and second to swell the economy with sources of employment. Not only would the “racinos” create thousands of jobs, but many additional opportunities would be created in the horse racing industry. More trainers, more groomers and even the farmers would see higher prices for hay.
To help sell this pinnacle of Rendell’s governorship he turned to Roy Wilt Sr. for help. Gov. Tom Ridge had appointed Wilt, a retired state senator of moderate Republican stripe to the state harness racing commission. When Rendell moved into the executive mansion, he not only kept Wilt on the commission but made sure he remained chairman and spokesman for the industry. Wilt had a rapport with certain moderate Republican state senators.
The state department of Agriculture web site unfolds it this way:
PA Racing boasts one of the best racing programs in the country. The Commonwealth is home to six state-of-the-art racing (both harness and thoroughbred) and gaming complexes and hosts harness racing at 16 agricultural county fairs. The growth of PA’s racing industry followed the passage of the 2004 Race Horse Development and Gaming, allowing for expanded gaming. Act 71 created greater opportunities for horse owners and breeders. It enhanced the state’s agricultural economy as a whole.”
In Act 71, the state earmarks 11 percent of revenues generated from slot machine gambling for the racing industry and agricultural initiatives. In 2013 that fund was a tidy $252 million! Since casinos opened in 2006, the “racino” operators have spent $52 million to improve the stable and backside areas of their racetracks.
Agriculture is the state’s largest industry. Rutgers University published a study in 2012 claiming PA’s horse industry provided a $1.6 billion impact, employing 23,028 who paid over $78 million in taxes.
The industry is in decline elsewhere. Even the Kentucky Derby was forced to reduce the purse for the most famous horse race of all this year.
Now all that is in jeopardy.
Too much of the prize money is won by out-of-state horses. Continued investment of casino revenues does not guarantee the racing industry will survive. In 2004 when Act 71 passed, the state produced 984 thoroughbred foals. The number increased every year until 2012, but decreases again. Only about 800 foals were produced in 2013.
Legislation is now in the Harrisburg wind that would re-direct chunks of this fund to public education and other state services, apparently with the support of Corbett.
Plans are also afoot to abolish the two horseracing commissions and shove enforcement and oversight under the state Gaming Commission.
Rendell, of course, has become a TV-talking head and lawyer-dealmaker. Wilt is also gone from the scene. On February 21, 2014 Wilt sent the following letter to his Governor of the same party.
“Dear Governor Corbett,
“Please accept my resignation as chair and member of the Pennsylvania Harness Racing Commission.
“At the age of 78, I no longer have the energy it takes to deal with an administration which cannot make decisions that are in the best interests of the industry. Neither do I have the patience to negotiate with a legislature that has an agenda that shows no interest in being first in anything positive.
“Therefore – I leave!
“Sincerely,”
Bottom Line: Corbett and the legislature seems hell-bent on spreading legalized gambling to every street corner in the state and the internet. All efforts are directed to raising taxes from sources that have the least resistance. Bankers and investors in the six “racinos” have to be nervous. “Racino” operators shelled out $50 million each for state licenses based on limited competition and use of some of the funds to promote horseracing.
Of Note: This writer served as a registered lobbyist in the early days of this story on behalf of a group that was unsuccessful in getting a “racino” license. Much of this history was witnessed firsthand.
