Pennsylvania race horse fund focus of audit by State Auditor General DePasquale
State Auditor General Eugene DePasquale is auditing the Pennsylvania Race Horse Development Fund, which funnels hundreds of millions of dollars in slot machine revenue to Pennsylvania's horse racing industry.
Declining to give details on what his team has found, DePasquale said on Wednesday that he anticipates releasing a report in early June.
“For a whole different host of reasons, I think there'll be a lot of interest,” he said during a meeting with Tribune-Review editors and reporters.
The fund, established when Pennsylvania legalized gambling in 2004, received $252 million last year, according to a revenue-tracking report from the state Gaming Control Board. Some of the money subsidizes purses at the state's racetracks.
Since the first casino opened in November 2006, the fund has received more than $1.6 billion. Some lawmakers have described it as a giveaway to the racing industry. Rep. Todd Stephens, R-Montgomery County, introduced a bill in January to redirect the revenue to public schools, and not, as he wrote in a co-sponsorship memo, to “out-of-state, millionaire racehorse owners.”
Jeb Hannum, executive secretary of the Pennsylvania Horse Breeders Association, said some lawmakers misunderstand why the gaming law started the fund. Horse racing was struggling when slots were introduced, he said. New competition could have reduced wagering further.
“The legislature can make laws, change laws, but a significant amount of money has flowed into the state to support racing and breeding,” he said. “It's working.”
The Race Horse Development Fund received about 11 percent of slot machine revenue in 2013.
In 2001, Pennsylvania's equine industry had a value of about $780 million. By 2008, it was valued at $3 billion, according to a presentation from the state Department of Agriculture from 2010.
DePasquale acknowledged the role racing played in the legalization of casino gambling.
“It was really to save the horse-racing industry. Whether people like that or not, that is what it was supposed to do,” he said. “Our audit will hopefully shed some light on some of those issues.”
In recent years, the legislature took money from the fund for other purposes, including more than $184 million in the past four years for the general fund.
Pete Peterson, spokesman for the Pennsylvania Equine Coalition, which represents breeders and horsemen associations, said that undermines the goal of the gaming law.
“Anytime you have the legislature talking about diverting extra money, that has a ripple effect through the industry where people may want to consider investing in Pennsylvania,” he said.
Melissa Daniels is a staff writer for Trib Total Media. She can be reached at 412-380-8511 or mdaniels@tribweb.com.
