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Horsemen: PA Purse Funds Are Secure

Published: November 6, 2017 1:54 pm ET

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The Pennsylvania Harness Horsemen’s Association has stated that, following years of uncertainty, it is proud to announce that the budget legislation that was recently passed protects the Race Horse Development Fund by converting it to a virtually untouchable trust fund.

The PHHA is referring to the bill’s passage as a major victory and something that the PHHA and fellow horsemen's organizations have fought long and hard for. The PA association is stating that, finally, people can confidently invest in the state’s horse racing industry without worry that an unexpected major diversion of funds would harm the purse structure.

It's called a ‘lockbox.’ That means racing funds are essentially locked away and cannot be raided for general purposes due to amendments to the Race Horse Development and Gaming Act. And, should the legislature attempt to take money anyway, a ‘clawback’ provision will be triggered, which will require complete repayment of all funds diverted since 2009 – over $185 million. That means the PA fund is better protected than ever before.

Budget legislation also significantly expands gaming, allowing for ‘mini-casinos,’ VGTs at truck stops, online gaming and lottery products, and also opens the possibility for pari-mutuel horse racing wagering through operators not directly connected to race tracks. All of these will compete to a certain degree with current revenue-generating sources that contribute to purses.

Exactly how much impact this expansion will have is yet to be seen. Some of these (truck stop VGTs, online lottery games) will probably have little effect on PA racing revenues. Others may be the subject of legal challenges or a long implementation process, meaning they could be many months or even years away. And it's possible ‘mini-casinos’ might only appeal to a small subset of gamblers who want a ‘no-frills’ experience lacking the glamour and amenities of Vegas-style properties like Mohegan Sun Pocono or Harrah's Philadelphia.

In fact, when the day comes that all of these expanded gaming options are in place, it's possible that their combined impact, if negative, could actually be less than future legislative raids on the fund might have been were it not for our new set of protections with the newly established trust fund and lockbox and clawback provisions.

(With files from the PHHA)


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