Millions in casino revenue earmarked for horse racing
JOHN TLUMACKI/GLOBE STAFF
Suffolk Downs saw what may have been its last day of racing on Oct. 4, 2014.
The first slot machine has yet to be played in Massachusetts, but already a huge amount of casino money is sloshing around in a special fund set up by the Legislature to prop up a sport that has all but disappeared in the state: horse racing.
Suffolk Downs, the only thoroughbred horse track remaining in New England, is certain to close as gamblers have steadily turned to other forms of legalized wagering and the track’s owners have grown tired of absorbing millions of dollars in annual losses.
Even so, thoroughbred racing — basically homeless and unable to support itself — now has more money than it knows what to do with, thanks to the political deal struck four years ago that opened Massachusetts to casinos.
In all, the thoroughbred horse racing industry is projected to receive about $18 million a year from casinos, earmarked to support races that may never come to pass, trainers of horses that may never run, and jockeys who may never ride them.
“Casinos are supposed to benefit the entire state, not just certain segments,” state Senator James B. Eldridge, an Acton Democrat, said last week.
He said the state casino law should be amended to put the money now designated for the horse racing industry to better use.
Already, a $5 million slice of the $195 million paid by casino developers to the state in licensing fees is tied up in a fund with no apparent legal way to spend it. But that is only the first chunk of cash with an uncertain use, absent a stunning reversal in horse racing’s popularity.
When the state’s first casino opens on June 24, it will begin funneling almost $15 million a year into the same fund, according to current projections. And when the state’s three resort casinos come on line in the next few years, they will bump up the total contribution to about $18 million a year, according to current projections.
Governor Charlie Baker said through a spokesman that his administration is committed to “closely reviewing and monitoring” how well the casino law works for possible improvements.
The mastermind of this casino-fueled boon for horse racing is House Speaker Robert A. DeLeo. While proponents of casinos were selling the idea as a way to create jobs and tax revenue for the state, DeLeo, who has deep personal and political connections to horse racing, insisted on the stipulation that tens of millions of dollars in future casino tax revenues go to support an industry that now employs fewer than 2,000 workers.
DeLeo’s father was maitre d’ at Suffolk Downs, and his legislative district of Winthrop and parts of Revere includes a portion of Suffolk Downs and is home to many of its workers.
Before the law was passed in 2011, DeLeo sought to justify the subsidy as a means of preserving jobs not only for horse owners, trainers and jockeys, but also for veterinarians, hay farmers, feed suppliers, blacksmiths, and others who support racing.
“If we can give those people a boost with some additional income, those horses will stay here in Massachusetts and the people at those tracks will keep those facilities going,” DeLeo said in support of the pending bill.
But it’s hard to imagine how the arrival of casinos will spur a rebound in horse racing. As legalized Las Vegas-styled gambling has proliferated from two states to 39 states in recent years, the amount of betting at Suffolk Downs — the truest measure of a track’s success — has plummeted by almost one-third. So, too, has the number of horses available to race there. And attendance has become so anemic that it is not even counted.
The phenomenon is by no means limited to Massachusetts: Few new tracks have opened to thoroughbred racing in the United States in the last 25 years, and many of the country’s best-known tracks date to the 1930s or earlier.
“Younger people don’t like the track because it’s not as exciting as casinos,” said Denis P. Rudd, a Robert Morris University professor who has studied the gambling industry. “You can play a slot machine every second, but you can bet on a horse race only every 20 minutes.”
The Suffolk Downs owners insist that they are done with racing. They are busy considering how best to develop the 160-acre site for a different use. But in the meantime, they are going along with a plan to hold one day of racing per month in July, August, and September, as a sort of last hurrah for an 80-year-old track that once drew crowds of up to 40,000 fans. During its heyday, Suffolk Downs featured daily racing five months a year.
DeLeo, asked last week about the generous funding of the horse racing industry, said the possibility of three days of thoroughbred racing in 2015 made it “premature to consider altering” the funding formula.
Some vestiges of the horse racing industry live on in Massachusetts. A far less popular form of the sport features a driver in a little buggy being pulled along by a horse. But harness racing has lost almost half of its market in recent years.
The state’s sole harness racing track is now owned by the state’s slot parlor, Plainridge Park Casino in Plainville, which is set to make history later this month when it introduces casino gambling in the state. In a way, the Plainridge casino operator will be paying itself by turning over a portion of its slot machine earnings to the state in taxes, only to have the state return it to the Plainridge track operator as a subsidy. Under the casino law, the harness track stands to receive $6 million a year when all four casinos are open, significantly less than is intended for thoroughbred racing.
If horse racing becomes extinct in Massachusetts, the money reserved for it under the casino law can accumulate in an escrow account for up to three years. After that, how to spend what could be tens of millions of dollars is quite uncertain, according to the state Gaming Commission, which has control over the escrow account.
“The resolution to that would depend on any number of currently unknown variables,” the commission said in a statement.
https://www.bostonglobe.com/metro/2015/06/10/millions-casino-revenue-earmarked-for-horse-racing-sport-that-has-all-but-disappeared/nNWm6KJDAmvCtnf5mFvYEM/story.html
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