State Agency Proposes Cuts To Racing Funds

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With newly elected Gov. Larry Hogan and the Maryland General Assembly working to wipe out spending deficits with this year’s budget, the Maryland horse racing industry has come under the eye of the Department of Legislative Services.

The DLS, which is trying to find ways to cut spending in some areas in order to help the General Assembly restore funding in others, has proposed a 10 percent cut to the Purse Dedication Account and the Racetrack Facility Renewal Account (RFRA) as part of the state’s Budget Reconciliation and Financing Act (BRFA) of 2015.

After much hard work by the MTHA, the Maryland Jockey Club and the Maryland Horse Breeders Association, the House Appropriations Committee, in consultation with the House Ways and Means Committee as well as the Senate Budget & Taxation Committee, rejected the proposed cuts and thereby maintained the current levels of funding for the industry.

Although the Hogan administration also indicated opposition to the DLS plan, the battle isn’t over. The MTHA’s longtime lobbyist, D. Robert Enten, explained that although unlikely, the cuts could reappear during a conference committee, composed of members of the House and the Senate,when they “iron out the differences in the BRFA.”

While the process can be tedious, Maryland’s horse racing principals have been proactive since first hearing of the proposed cuts in late February.

“We committed to the General Assembly in 2012 to embark on a 10-year program to revitalize Maryland Racing,” MTHA legal counsel Alan Foreman said. “We have made many decisions and committed funding for projects over the next five years. In addition, those who continue to support Maryland’s breeding industry made similar commitments.

“These cuts would stop in its tracks the enormous revitalization that is occurring in Maryland racing right now.” Foreman also pointed out the shift by casino patrons from VLTs (slots) to table games has already reduced the amount of revenue the racing accounts derive and said a further cut would “be unfair.”

A legislative team of representatives from the MJC, the MTHA and the MHBA communicated those thoughts directly to legislators emphasizing the detrimental effect the proposed cuts would have. Representatives from those groups testified in the House and Senate against the cuts, met with the governor’s staff and sent a letter to Senator James E. DeGrange Sr., chair of the Public Safety, Transportation and Environment Subcommittee that reviews and makes recommendations on gaming issues.

The letter was signed by MTHA president Timothy Keefe, MJC chief operating officer Tim Ritvo, MHBA president Joseph Pons Jr., MTHA executive secretary David Richardson, MJC vice president and general manager Sal Sinatra and MHBA executive director Cricket Goodall.

In its letter the group stressed the importance of the 10 Year Agreement and the VLT revenues working in tandem “to completely revitalize and restore Maryland’s historic and economically important racing industry.”

“This is truly a concerted effort by all the constituent parties in the thoroughbred industry,” Foreman said. “We’re all working together and are in lock step. “While this has been a wake-up call, in terms of letting us know the legislature has an expectation to see progress, it gave us an opportunity to present our revitalization to a much broader audience,” he said, referring to legislative members who don’t ordinarily hear from the horse racing industry.“It has been an opportunity to talk about the positives and what a success story the racing industry is becoming.”

Among the achievements industry leaders spoke about and documented in their letter were: the raise in purses to a level that has begun to stimulate interest in Maryland racing both locally and nationally; the MJC’s ability to attract horses, owners and trainers from throughout the region and beyond; and new barns being built at Laurel, with the MJC and horsemen sharing the cost.

Also: The MJC’s plan for significant capital investments at its facilities, made possible by the long-term RFRA commitment that MJC must match; the enabling of the horsemen and breeders to purchase the 46 live racing days necessary to maintain a year-round racing program in the state – a pledge the stakeholders made to the General Assembly in order to get the VLT allocations; and an astonishing revitalization of the Maryland breeding industry, which has seen Maryland rise to being the only state in the region with increases in foal numbers and mares coming to be bred.

“Simply put,” racing’s representatives wrote, “the proposed cuts would stop the redevelopment and massive investment that the undersigned stakeholders are collectively making to restore Maryland racing.”

The stakeholders went on to say, “There is no worse message or step that the state could take than to cut allocations to racing at a time when the industry is undergoing the most massive positive changes in a generation and especially when the industry is meeting the commitments it made to the governor, General Assembly and citizens of this state who derive the benefits from a strong and vital racing industry.”

After the House decision to reject the funding reductions, Foreman said he is cautiously optimistic.

“We’re pleased the legislature hasn’t accepted the proposed cuts thus far,” he said. “But until the session ends on April 13 we will be watching very closely to ensure these cuts don’t materialize.”

Purse Release