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Thursday, July 6, 2017

Casino tax winds up with state’s well-heeled horse owners

The only source for this fund at this time is the Plainridge Slot Barn.

Casino tax winds up with state’s well-heeled horse owners

Jack EncarnacaoMatt Stout Thursday, July 06, 2017

Credit: John Wilcox

COMPETING INTERESTS: Horses leave the gate at Suffolk Downs, above, which has received millions in casino taxes that critics would like to spend elsewhere.

Taxpayers have been fattening the winning purses of wealthy horse owners at Suffolk Downs the past two years thanks to the Bay State’s horse racing fund, which is fueling their six-figure payouts at a time critics are howling for the money to go to better priorities for the budget-strapped state government.

The cumulative winnings, detailed in a Herald analysis of payouts from the East Boston track, have been financed entirely by the $35 million in tax dollars the Race Horse Development Fund has taken in since 2015, when the state’s first slots parlor opened.

The fund was meant to bolster the purses — the winnings paid out to horse owners — that struggling Massachusetts tracks can offer to attract top thoroughbreds. The fund is made up mostly of taxes on casino revenues, and is parceled out to tracks by the Massachusetts Gaming Commission.

The fund has become a popular target for lawmakers facing a potential $1 billion budget shortfall, including a Senate proposal to tap it for $13 million for “pressing environmental, conservation and recreation needs.”

The well-heeled owners of winning horses at Suffolk Downs since 2015 include:

• Patricia Moseley ($176,350 in winnings), the widow of former Suffolk Downs owner James
B. Moseley and daughter of Crocker Snow, who founded one of Boston’s first commercial airlines. She lives on the family estate in Hamilton;

• Teresa Horky ($160,900), the CEO of Pegasus Solutions, a successful tax preparation, health care consulting and financial consulting firm she founded; and

• Joseph DiRico ($157,950), a VP at his family’s third-generation company, Hub Folding Box in Mansfield. His late father, Alfred, also took home $45,000 in purse winnings from Suffolk Downs in 2015.

Greg Sullivan, a former state inspector general now with the Pioneer Institute, said it “makes no sense” for casino taxes to end up in wealthy horse owners’ pockets, especially after Suffolk Downs lost a bid to build its own casino and in May, cashed in on the $155 million sale of the property.

“Now here we are, Suffolk Downs is being sold, and they’re sitting on this pile of money, which is winding up in the pockets of millionaires at a time when Massachusetts is essentially broke,” Sullivan said.

“This should be terminated immediately, and those funds should be used for important purposes in Massachusetts.”

State Rep. Brad Jones, who has proposed diverting a portion of the fund to community preservation, said the payouts illustrate how the racing industry plays to wealthier residents.
“Generally speaking, it’s an older clientele and a more affluent clientele,” Jones, the House minority leader, said of horse racing. “That’s a very finite universe. And I think it does raise the question, is that the best place to put these resources from gaming?”

Where were you when GAMBLING LEGISLATION was proposed? Silent? 

The owners defended the six-figure hauls, arguing the data don’t show how much they are investing to support local horse farms and related trades with the winnings.

Paul Umbrello, executive director for the New England Horsemen’s Benevolent and Protective Association, said it could often take $35,000 to $50,000 to breed and train just a single horse.

“They’re not going to put (purse winnings) in their pocket and buy a car — they’re going to turn it back into whatever it takes to raise these horses, which is considerable,” Moseley told the Herald. “I don’t know what form racing’s going to take, if any, but it won’t take any if they don’t have some of this support.”

Horky argued that in her 20-plus years in the industry, she’s lost money the vast majority of the time, adding that she’s “paid more to Massachusetts farms than I won.”

“You put it all back into that industry in hopes to keep it open and running, and having some space for children to see there’s something with four legs besides a dog,” she said.

Commission spokeswoman Elaine Driscoll said tracking who ends up winning money from the purse fund “suggests a misunderstanding of its purpose and operation.” She said it helps support an entire network of breeders, trainers, veterinarians and jockeys.

Since 2015, the fund has taken in $35.4 million and paid out $22.4 million, 80 percent of which is earmarked for purses. Prior to the that, when Suffolk Downs ran scores of races each year, purses were funded by whatever was left of the money wagered — dubbed the “handle” — after taxes were taken out and the track took its cut.

Suffolk Downs is hosting six days of racing this summer, with the first scheduled for Saturday and, again, the fund supporting all the purses.

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