These windfalls exist because many states, when they legalized slots, opted to install them in racetracks and decided to aid the sport by earmarking a certain percentage of revenues for purses and breeder awards. But what the state gives, the state can take away, and many are taking a fresh look at their largesse to the horse business:
●In Pennsylvania, Gov. Tom Corbett has proposed cutting $72 million of subsidies to horse racing and breeding to pay for other agricultural projects.
●In Ontario, the provincial government has proposed ending all slots payments to the horse racing industry as of 2013.
●In Indiana, the state’s inspector general advocated slashing the subsidy for horse racing.
●In New Jersey, Gov. Chris Christie ended state support of racing and blasted leaders of the sport for “extorting the taxpayers for millions of dollars in subsidies to their industry.”
Horsemen have reacted with shock and outrage to such proposals, but they should have seen these haymakers coming. Many state governments are under severe financial pressure and are struggling to maintain basic services for their citizens. As politicians look for sources of revenue, they can’t ignore the millions of dollars now flowing into horse racing, and they can readily frame populist arguments that the money is being misallocated.
Christie said: “I am no longer going to permit millionaire horsemen to take money . . . from the taxpayers of the state to fund their industry.” In Ontario, Education Minister Laurel Broten sent out a news release declaring, “We simply can’t afford to support . . . horse racing subsidies. . . . when the . . . money could get better health care for our seniors and full-day kindergarten for our 4- and 5-year-olds.”
In most places, the racing/slot machine relationships developed along similar lines. In some cases, a racetrack couldn’t survive on its own merits, but it was such an important part of its community that the public supported legalizing slots to keep it alive. (This was the case at Charles Town.)
In others, proposals for legalized slots faced a lot of not-in-my-backyard opposition, and the perfect answer was to put the slots in an existing gambling facility — a racetrack. The track, of course, got a percentage of the profits for running the operation. The rationale for allotting money to purses and breeders’ awards (rather than, say, health care for seniors) was to revive the sport by improving the product and attracting more fans.