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Horsemen see purse, development funds cut

[cleeng_content id=”249608565″ description=”Read it now!” price=”0.49″ t=”article”]CHARLES TOWN – Legislation cutting millions of dollars in lottery subsidies earmarked for thoroughbred racing purses and breeder development funds has passed the West Virginia House of Delegates and awaits consideration in the state Senate.

House Bill 4333, introduced on behalf of Gov. Earl Ray Tomblin as a way to help shore up a projected $146 million shortfall in the state budget, reduces by 10 percent for one year the share of lottery funds – which includes traditional lottery games as well as slot machines and table games – dedicated to various constituencies, including various aspects of the state’s horse and dog racing industries.

Horses break from the gates at Hollywood Casino at Charles Town Races.

Horses break from the gates at Hollywood Casino at Charles Town Races.

The thoroughbred and greyhound racing and breeding sectors in West Virginia will lose more than $6.2 million in subsidies, including nearly $4.9 million for racetrack purses, according to Lottery Commission estimates.

“It’s going to be devastating to the industry here,” said Randy Funkhouser, president of the Charles Town Horsemen’s Benevolent and Protective Association.

The original legislation had sought to cut those revenues permanently by 15 percent, and also included proposed funding cuts for racetrack counties and municipalities. The proposed cuts in funding for counties and municipalities were later eliminated after intense lobbying, while the casinos – which saw no initial cuts – were later added and saw 10 percent cuts approved for their capital reinvestment and modernization funds.

All told, in its current form, the legislation diverts nearly $35 million in lottery funds to plug holes in the budget gap and help West Virginia maintain its AAA bond rating.

The House of Delegates passed the measure 72-25.

“This is a piece of the puzzle to get where we need to go,” House Finance Chairman Brent Boggs, D-Braxton, told the Charleston Gazette. “It’s not perfect, but it’s smaller than what the governor sent up.”

Local representatives Tiffany Lawrence, D-Jefferson; Paul Espinosa, R-Jefferson; and Stephen Skinner, D-Jefferson, all voted against its passage.

“In the panhandle, we certainly welcome the green industry the horse industry represents,” Espinosa told the Gazette. “While I know we have to have a balanced budget, I’m not willing to do that on the backs of the horsemen and the greyhound owners.”

West Virginia legalized slot machines in 1994 as a way to save its then-dying horse industry, offering subsidies from expanded gaming revenue to reenergize the state’s racing and breeding sectors. Purses rose rapidly and the number of foals born locally skyrocketed helping establish West Virginia a reputation for having a healthy industry.

But a series of revisions over the years to the original legislation reducing the percentage of gambling revenues going to purses and increased competition from casinos in contiguous states have hit the horse industry hard.

“We’re going to take another hit,” Funkhouser said. “You get to a point where people can’t make money. I think we’re seeing a steady march to that.”

Total purse from handle – the amount wagered by gamblers – has diminished over the years, while the racing industry has become more dependant on casino revenue subsidies. In 2012, casino revenue accounted for nearly 88 percent of revenue (or $91.7 million) to breeders and owners, according to a recent West Virginia University study.

Meanwhile, state lottery revenues have continued to drop and exacerbate the problem, falling 12 percent last month over the previous year as casinos in Ohio, Pennsylvania and Maryland put on the competitive squeeze.

Funkhouser said he is most concerned that the pending legislation remains in its current state as a one-year reduction. He said stretching it out over the next few years, or reverting it back to its original form, could cripple racing in West Virginia.

“If they could mitigate it to 5 percent for a year that would help, a lot,” Funkhouser said. “The main thing right now is not to make it three years. These horsemen couldn’t, in my opinion, afford three years like that. And God knows what (lawmakers) are going to come back after that and do.”[/cleeng_content]

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