INDIANAPOLIS (AP) — Indiana should consider a big cut in the subsidy it
gives its horse racing industry each year, the state’s inspector general
recommended, saying that what started off as an effort to jumpstart the
industry might need to be re-evaluated.
Inspector General David Thomas, in a report released last week summarizing
the findings of an investigation into alleged wrongdoing by the Indiana
Horse Racing Commission, suggested that the state should consider scaling
back its subsidy, which was $58 million in 2010, to pre-2009 levels.
That year, the subsidy was expanded to include a percentage of slot machine
revenues from the state’s two pari-mutuel horse racing tracks, Indiana Downs
near Shelbyville and Hoosier Park in Anderson. Those revenues also subsidize
purses for their horse races. The state subsidy before the tracks opened was
$28 million, or less than half what it was last year.
“Assuming that a continued subsidy to the horse racing community is deemed
proper by the Indiana Legislature, we respectfully recommend that the
Legislature consider evaluating the amount of the subsidy and consider a
monetary cap at pre-racino figures,” Thomas wrote, the Indianapolis Business
Journal reported Wednesday.
The Legislature created the subsidy in 1993, funding it from taxes on
riverboat gambling, in an effort to grow the industry. Since then, the
industry has received $427 million in subsidies, and the funds appear to
have made an impact: The sport’s direct economic impact has grown from $181
million in 2005 to $733 million in 2010, a Purdue University study found.
Herb Likens, chairman of the Indiana Thoroughbred Owners and Breeders
Association, said cutting the subsidy would devastate the industry.
“The quality of racing in the state of Indiana would go down rapidly,” said
Likens, who owns nine horses that race at Hoosier Park. “I know there’s a
lot of competition for dollars, but people don’t realize how important horse
racing is to Indiana, especially where I’m at in Anderson.”
Thomas’ report summarized the findings of his agency’s 16-month
investigation of the Horse Racing Commission, in which his office cleared
the commission of any criminal or ethical wrongdoing. The investigation
looked into allegations of inappropriate wagering involving jockeys and
horse owners betting on their own races.
A review of Indiana law found that the wagering is legal. But if the state
Legislature wants to stop the activity, the Inspector General wrote, it
would back a statutory prohibition.
The Horse Racing Commission, in a written response to the Inspector
General’s report, declined to comment on the proposed cut.
“We have never inserted ourselves in this particular public policy issue in
the past, and will not do so now,” said Sarah McNaught, chairwoman of the
Horse Racing Commission.