The Pennsylvania Equine Coalition today announced that a provision of state code that resulted in the diversion of 17 percent -- more than $200 million over the last four years -- from the Race Horse Development Fund has sunset with the adoption of the state budget for the 2013-2014 fiscal year.

The Pennsylvania Equine Coalition also partially turned back a budget proposal to divert approximately $31 million this year from the Race Horse Development Fund, reducing the diversion of funds to $17.6 million.

The state’s horsemen and breeder organizations engaged in an aggressive educational campaign throughout the budget process, talking with legislators about the negative impact that diverting more than $31 million would have on the state’s racing and breeding industries, the economy, and jobs.

“We are relieved that the 17 percent diversion is over and that the proposal to divert $31 million was scaled back, but we remain concerned about the long-term impact that diverting funds will have on the racing industry,” said Pete Peterson, spokesperson for the Coalition. “Like any industry, businesses involved in horse racing and breeding require the ability to make long-term calculations about the viability of the industry. When the amount of money available for purses and breeders incentives is in constant question, it discourages business owners from making capital investments and it impacts the amount of money owners are willing to invest in Pennsylvania horses.”

Peterson noted that the state’s decision in 2009 to transfer 17 percent out of the Race Horse Development to the state’s general fund -- about $200 million over the past four years -- had a chilling effect on the state’s breeding and horse racing industry. He said many investors who would have bred to Pennsylvania stallions opted not to because of the lack of stability of the fund. Similarly, Thoroughbred breeders who were considering investing in stallions with national profiles to stand at stud in Pennsylvania decided the high-dollar investment was too risky.

“The diversion of monies from their intended purposes in the Race Horse Development Fund has negatively impacted breeding operations in Pennsylvania and resulted in reductions in purses at the state’s racetracks, which impacts horse owners, stable hands, trainers, blacksmiths, jockeys, veterinarians, and farmers who produce feed,” said Peterson. “Diverting funds creates uncertainty, which results in less dollars being invested in Pennsylvania, which directly impacts jobs.

“Breeding of horses is a direct function of the stability of the RHDF and the current economy. It is a long-term process of approximately four years. Breeders and investors need to feel that they have an opportunity for a reasonable return on the dollars they spend. That is why stability of the fund is vital to the long-term success of Pennsylvania’s racing and breeding industry.”

Peterson pointed out, however, that even with the ongoing concerns about the stability of the Race Horse Development Fund, the racing and breeding industry in Pennsylvania has experienced a remarkable rebirth since the state legalized casino gaming and created the RHDF, which is funded through an assessment on slot machine revenues.

“The racing and breeding industry has accomplished a great deal over the past decade, creating tens of thousands of jobs,” said Peterson. “We have much to be proud of, but we will never know how much more we could have accomplished had the funds from the Race Horse Development Fund not been diverted. Looking to the future, we intend to highlight what we have accomplished despite the enormous uncertainty that has existed in recent years, and work to ensure the fund remains stable going forward.”

Accomplishments as a result of Act 71, the Race Horse Development and Gaming Act, include:

• Economic data from the Department of Agriculture released in 2010, shows that between 2001 and 2008 the value of the racing industry in Pennsylvania more than quadrupled thanks to Act 71. The Department of Agriculture stated that due to the RHDF, the overall value of the equine industry increased by 380 percent to $3 billion with employment more than tripling from 13,870 to more than 41,100.

• The number of Thoroughbred mares bred to Pennsylvania stallions increased from approximately 1,000 prior to 2003 to a high point of 1,753 in 2009 (when the legislature began to divert 17 percent from the RHDF and the national economy faltered).

• On the Standardbred side, registrants for Sire Stakes have increased more than 70 percent since the passage of Act 71, which created the Race Horse Development Fund. Over the last five years, the number of Standardbred horses registered for the Sire Stakes has averaged approximately 1,750 to 1,800 horses, a more than 70 percent increase from the approximately 1,000 registrants prior to 2003.

• With the stagnant economy, the number of foals nationally has been decreasing, yet the number of Standardbred foals in Pennsylvania has increased by more than 20 percent over the past few years. On the Thoroughbred horse side, the number of Pennsylvania-bred Thoroughbreds has seen its share of the national foal crop rise from 2.6 percent in 2004 to 5.4 percent in 2010.

• Horses that sired the winner and a runner-up of the 2012 “Horse of the Year” are now standing at stud in Pennsylvania. The winner of the prestigious Horse of the Year Award, Wise Dan, was sired by Wiseman's Ferry of Dana Point Farm in Lenhartsville, Pa. A runner-up, Fort Larned, was sired by E Dubai of Northview Stallion Station in Peach Bottom, Pa. The fact that these two horses are now breeding in Pennsylvania and not Kentucky demonstrates the growing national stature of the Commonwealth.

• Pennsylvania will host nine graded stakes races in 2013, tripling the number of three graded stakes race in 2004. In 2012, Pennsylvania hosted seven stakes races.

• As part of the 2013 Kentucky Derby weekend at Churchill Downs, the Pennsylvania-bred 3-year-old filly Princess of Sylmar pulled off an upset win in the Kentucky Oaks, a Grade 1 stakes race that serves as the “sister” race of the Kentucky Derby. That same weekend at Churchill Downs, another Pennsylvania-bred, So Many Ways, won the Eight Belles Stakes (a Grade 3 stakes race).

• Last month, Pennsylvania-sired 3-year-old pacer Captaintreacherous won the 30th annual North America Cup final at Mohawk Racetrack in Ontario, one of the most prestigious races in the Standardbred racing industry.

The Pennsylvania Equine Coalition is a statewide group representing more than 10,000 owners and trainers of the horse racing industry in Pennsylvania. Members of the coalition include the Pennsylvania Harness Horsemen’s Association, the Pennsylvania Thoroughbred Horsemen’s Association, the Standardbred Breeders Association of Pennsylvania, the Pennsylvania Horse Breeders Association, the Meadows Standardbred Owners Association, and the Pennsylvania Horsemen’s Benevolent & Protective Association.

(Pennsylvania Equine Coalition)