Subsidy cutbacks ‘disastrous’ to racing industry, lawmakers told

Representatives of thoroughbred and greyhound breeders told West Virginia legislators Wednesday that cutbacks in state subsidies of racing purses are devastating the racing industry in the state.

“For all of us, it’s been disastrous,” said Sam Burdette, president of the West Virginia Greyhound Owners and Breeders Association, discussing cuts in racing subsidies, the most recent being a 10 percent reduction enacted during the regular session.

Burdette provided members of the Joint Standing Committee on Finance with charts comparing total greyhound racing purses at the Mardi Gras racetrack for the first week of September in 2010, 2012, and 2014, showing how they’ve fallen from $98,041, to $84,839, and down to $61,721 this year.

Meanwhile, he said, the share of weekly purses going to greyhound owners has fallen from $34,685 in 2010 to $18,161 this year.

Burdette said it takes a minimum of $3,000 a week to operate a greyhound kennel — and only three of the 17 kennels racing at Mardi Gras reached that amount last week.

“Only three of 17 kennels made enough money to exist,” he told committee members, adding, “Most of you understand you cannot run a business on less than $3,000 a week, and that’s the result of this legislation.”

Representatives of thoroughbred breeders from Charles Town and from Mountaineer Racetrack in Chester made similar assertions.

They said declines in purse funds are resulting in fewer race days and fewer races per day.

“It’s very difficult on the employees, horsemen, and businessmen up there,” said John Baird, president of the Mountaineer Park Horsemen’s Benevolent and Protective Association.

Sen. Clark Barnes, R-Randolph, noted that the management of the state’s four racetrack casinos were conspicuously absent — both at Wednesday’s interim meeting and during legislative debate on the 10 percent purse subsidy cut-back this spring.

“What I see seriously lacking here today and throughout the legislative process are the tracks themselves. I don’t see the tracks going to bat for you guys,” Barnes said. “Rumor has it, they would like to get rid of it.”

Joe Funkhouser, with the Charles Town HBPA, responded, “I’ve heard rumors the dog tracks in particular want to do what Iowa did, and buy the dogs out.”

Iowa this year passed legislation that begins the process of “decoupling” greyhound racing from racetrack casinos in that state, with part of the legislation requiring casino management to pay a $72 million buyout to greyhound owners and breeders.

Funkhouser said he was not aware of any efforts by management of the racetrack casinos to attempt to decouple thoroughbred racing, but noted all of the state’s casinos have “complete separation” between their gaming floors and the racetrack areas.

“Maybe that speaks for itself,” he commented.

Barnes said afterward it appears the casino management would not be upset if racing became unsustainable because of repeated funding cuts.

Burdette said decoupling could be a double-edged sword for the four casinos, since current law requires live racing as a condition of obtaining casino gaming licenses.

If that requirement were eliminated, Burdette asked, “Do you open the state up for additional casinos?’

Racing purse subsidies come from percentages of racetrack video lottery and table games revenues, which have been falling in recent years, with the opening of multiple competing casinos in Pennsylvania, Maryland and Ohio.

Funkhouser noted that revenues at Charles Town’s Hollywood Casino — by far the largest casino in the state — fell 25 percent when competing casinos in Maryland opened, and is expected to fall another 25 percent when the $925 million National Harbor casino opens just outside of Washington, D.C., in 2016.

“We don’t have a monopoly on the D.C. market anymore,” he said.

Reach Phil Kabler at philk@wvgazette.com, 304-348-1220, or follow @PhilKabler on Twitter.

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