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Racetrack subsidies in Hochul budget face scrutiny

Joe Mahoney via Associated Press
Posted 2/23/22

ALBANY — Critics of “corporate welfare” for horse racing in New York say state subsidies for the industry should be put out to pasture. Horse racing has been beset by controversies stemming …

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Racetrack subsidies in Hochul budget face scrutiny


ALBANY — Critics of “corporate welfare” for horse racing in New York say state subsidies for the industry should be put out to pasture.

Horse racing has been beset by controversies stemming from a wave of catastrophic breakdowns of horses in competition, cases of illegal doping of the equine athletes and contentions some tracks would fold if it weren’t for the subsidies from video lottery terminals — devices that resemble slot machines — at racinos.

The state’s 11 racetracks “are generating no meaningful tax revenue,” John Scheib of Burnt Hills, one of several opponents of the racing subsidies, told lawmakers at a hearing on Gov. Kathy Hochul’s proposed state budget.

He and other critics of the subsidies say it is unfair for the state to prop up horse racing while thousands of small businesses operating throughout the state produce far more jobs without getting the taxpayer-funded benefits flowing to owners of race horses.

“It’s important to point out that horse racing in this state is a net zero sum,” said Marc Paulhus, representing the Coalition to End Horse Racing Subsidies. “It costs as much to regulate the sport as the state gets in revenue from the sport. And it’s the only gambling operation in the state that fails to produce any meaningful revenue for the state.”

The testimony before the Legislature comes at a time when two lawmakers, Assemblywoman Linda Rosenthal, D-Manhattan, and Sen. Zellnor, Myrie, D-Brooklyn, are seeking to build support for legislation that would strip $230 million in payments from the racing and breeding industries in New York and channel the money to schools and social programs.

New York Thoroughbred Breeders, an industry group, and the New York Racing Associate, which operates the Saratoga, Belmont and Aqueduct thoroughbred tracks, have registered their strong opposition to the legislation.

Rosenthal recently got into a heated Twitter exchange with NYRA. She said 114 New York race horses have died since January 2021 while two horse trainers owe nearly $1 million to scores of employees as a result of an investigation into wage law violations.

NYRA and other advocates for racing have formed a coalition — We Are NY Horse Racing — to defend the sport as a generator of $3 billion in annual economic activity, provider of some 19,000 jobs and driver of tourism throughout the state.

At the budget hearing, Assemblyman Gary Pretlow, D-Westchester, chairman of the Assembly Committee on Racing and Wagering, defended the racing industry and branded arguments subsidies should be gutted as “fairly farcical.”

Pretlow said the critics’ claim that racing revenue barely supports the state’s regulation of the tracks amounted to a distortion. “Those monies are derived from the handle, of which just this year was at record levels,” he said. The funding, he said, comes from the 17% takeout that is derived from the bets.

Pretlow also said that the legislation aimed at killing the racing industry subsidies could jeopardize billions of dollars in state support for education that is derived from gaming revenue.

While many tracks in New York and across the country have seen sharp drops in attendance over the past 20 years, the Saratoga thoroughbred track has been an exception. It accounts for more than half the attendance and on track wagering in the state.

Assemblywoman Carrie Woerner, D-Round Lake, said hotels, restaurants and merchants have all benefited from the hundreds of thousands of tourists who visit Saratoga Springs annually because of thoroughbred racing.

Beyond that, there are many jobs created by racing activity, she added. “Horses need to be fed. Horses need to be transported. Horses need to be maintained,” Woerner said. “And all of that is economic activity.”

According to the state Gaming Commission, racetracks were authorized to host video lottery parlors due to their status as pari-mutuel wagering licensees. Those tracks have brought in $23.1 billion in net win, resulting in $10.7 billion in payments to support education in New York.

The track host and surrounding communities have also benefited through revenue from payroll, income and sales taxes, the commission said.

The agency said it is also working to reduce racehorse injuries through “applied research, innovative interventions, and education of all stakeholders.”


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