February 23, 2016
Tom LaMarra, Blood-Horse

Legislation that proponents said is designed to modernize horse racing in Pennsylvania was signed into law Feb. 23 by Gov. Tom Wolf, who last fall threatened to shut down the industry because it didn’t have enough money for regulation.

The “reform” law, called Act 7, restructures racing oversight in the state—which has two racing commissions, one for Thoroughbreds and the other for Standardbreds. There will be one nine-member commission with separate bureaus for each breed.

Racing falls under the state Department of Agriculture, which last year said it could no longer afford to pay for operations and regulation, including day-to-day equine drug testing. The department has been solely reliant on the State Racing Fund, which derives revenue from in-state pari-mutuel handle; revenue has dropped by about 70% over the past 15 years.

The 2004 law that authorized racetrack gaming in Pennsylvania made provisions for purses and horsemen’s pensions, but not regulation and promotion. Under Act 6, a cut of money from the Race Horse Development Fund will now go to pay for drug testing and the promotion and marketing of racing.

About $11.3 million from the RHDF will go toward drug testing in fiscal year 2016-17. Beginning July 1 of this year, 1% of revenue in the RHDF will be transferred to the State Racing Fund for promotion of horse racing; based on current revenue that would amount to $2.4 million a year.

The law also repeals the 10% advance deposit wagering tax that had been challenged in the courts.

“Getting to this point was not easy,” Pennsylvania Agriculture Secretary Russell Redding said in a statement after Wolf signed the bill into law. “But thanks to the involvement of the stakeholders, we were able to arrive at a sound compromise that accomplishes our objectives: strengthening the integrity of horse racing in the commonwealth, and putting in place a financial model that will allow for the long-term viability of the State Racing Fund.”

There also will be a “comprehensive industry study to assess the financial, regulatory, and market factors of the horseracing industry,” according to the Department of Agriculture.

Though representatives of the racing industry surrounded Wolf as he signed the bill, some weren’t supportive of all of the bill’s provisions, including the combination of the two racing commissions into one.

The new commission will be composed of five members appointed by the governor: one veterinarian, one representative of a Thoroughbred horsemen’s organization, one representative of a Thoroughbred breeders’ organization, one representative of a Standardbred horsemen’s association, and one representative of a Standardbred breeders’ organization. The other four members will be appointed by each of the four legislative caucuses.

The law also directs the Pennsylvania State Gaming Commission to prepare a report on the potential of daily fantasy sports as a gambling product in the state.