Pennsylvania Legislation Would Give Horsemen, Breeders Regulatory Clout

by | 12.21.2015 | 8:20am

Horsemen and breeders in Pennsylvania will have unprecedented powers as regulators if legislation recently approved by the state's House of Representatives is, as expected, passed by the Senate and signed into law by Gov. Tom Wolf.

The legislation, House Bill 941, would create a new State Horse Racing Commission comprised of nine members: five appointed by the governor, including one representative of horsemen and one representative of breeders for both the Thoroughbred and Standardbred industries. The governor's fifth appointee would be a non-horseman veterinarian. Four additional appointees are to be made by the majority and minority leaders of the House and Senate. The Secretary of Agriculture would be a non-voting member of the commission.

Within the State Horse Racing Commission would be an Office of Horse Racing, with separate “bureaus” for Thoroughbred and Standardbred racing. A director would be hired to oversee each of the separate bureaus.

The horsemen's and breeders representatives on the newly created Horse Racing Commission would be selected by the governor from a list provided by owner and breeder organizations within the state for Thoroughbreds and Standardbreds. These commissioners would hold veto power on three key matters within their breed's “bureau”: the hiring of a director; the adoption of regulations governing race meetings, including medication rules; and approval or denial of licenses to operate race meetings.

In other words, the paid director for the bureau of Thoroughbred racing within the State Horse Racing Commission's Office of Horse Racing cannot be hired without the approval of both the Thoroughbred horsemen's and breeders' representatives on the newly created commission. They would also hold veto power as part of a “qualified majority” on all regulations related to how racing is conducted.

The same would go for Standardbred racing and its horsemen's and breeders' representatives on the commission. The breed specific commissioners would not be not permitted to vote on matters involving the other breed.

Pennsylvania currently has two separate commissions for Thoroughbred and Standardbred racing, both consisting of three members appointed by the governor.

The legislation provides funding for the state's equine drug testing program through June 30, 2020, by transferring funds from the Pennsylvania Race Horse Development Fund (which derives its revenue from slot machines) into the State Racing Fund (which currently relies on a portion of ever-declining pari-mutuel handle). The drug testing program is estimated to cost $9.5 million annually and creates an annual deficit of about $6.2 million.

HB941 also authorizes new or increased licensing fees for individuals (a maximum of $500 for three years, up from $100 for three years), racetracks ($50,000 for three-year terms), tote companies ($25,000/year), electronic wagering ($250,000 initial fee, then $50,000 annually, from which racetracks are exempt), and advance-deposit wagering ($500,000 initial fee, then $100,000 annually, with the current tax on ADW wagers repealed). Maximum administrative fines also are being increased from $5,000 to $10,000 for violations of racing regulations. The bill also increases the percentage of wagering breakage retained by the State Racing Fund from 25 percent to 37.5 percent.

A new fund to promote horse racing is being created through 1 percent of deposits into the Pennsylvania Race Horse Development Fund. That marketing fund is projected to be $2.5 million annually.

The Senate is expected to vote on HB941 this week. If passed and signed into law by Gov. Wolf, the legislation becomes effective in 90 days.

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