Chesterton Tribune

$58 million state subsidy for Indiana horse racing draws fire

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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.

 

Posted 11/17/2011