Feb 12, 2016 3 min read

Legislation that makes substantial regulatory changes necessary for protecting and improving Pennsylvania’s horse racing industry is on its way to Gov. Tom Wolf for his signature.

When enacted, House Bill 941 will result in a surplus between $10 million and $15 million by 2019-20 in the fund, which supports regulatory oversight of horse racing in the state.

The announcement was made this week by state Sen. Elder Vogel, R-47th, who added the funding amendment to the bill.

“There has been a tremendous amount of interest and input from a number of parties in the racing industry and from the racehorse development business,” Vogel said in a statement.

“The bottom line is that we face the real possibility of losing a multimillion dollar industry.

“It was imperative that we take care of the racing fund’s current financial instability, but provide for the long-term protection of the racing industry in Pennsylvania.”

Mike Rader, executive director of the Senate Agricultural and Rural Affairs Committee, said Thursday the bill represents the first changes to the fund in more than 30 years.

Three decades ago, Rader said, the fund was financed by a portion – about 2.5 percent – of each wager made at the state’s tracks.

“That was fine in the 1980s when racing didn’t have to compete with other kinds of wagering” like slots and table games, he noted.

The funding method’s dependence on in-state wagers also worked in the days before the advent of online betting on horses and satellite transmissions of out-of-state races, Rader said, noting the bill enables the state to collect a portion of the out-of-state wagers made on Pennsylvania horse races.

“We were 30 years behind schedule from a regulation standpoint,” he said.

The bill allows transfers from the Horse Race Development Fund to the State Racing Fund to fix slumping revenue and pay to perform drug tests on horses, Rader said.

The Horse Race Development Fund, which receives its revenue from an 11.5 percent levy on gross terminal revenue from slot machines at the state’s casinos, generates about $240 million annually. It’s used to enhance purses for races and to provide health and pension benefits to those who work in the state’s $1.2 billion racing industry.

According to Rader, the State Racing Fund currently operates on about $19 million a year, but is running a $6.2 million deficit.

For now, the fund is using some of the proceeds from its restricted accounts, and the deficit will need to be addressed in the 2015-16 budget, Rader said.

The new funding will begin to flow with Wolf’s signature, which is expected.

“We have every indication that he plans to sign this,” Rader said.