Ohio Harness Horsemen's Association

Panel Wonders How to Fund Kentucky Racing

October 1, 2008

Nick Nicholson, like the rest of the members of the Governor's Task Force on the Future of Horse Racing, has plenty of ideas on how to keep Kentucky at the forefront of the horse racing industry. Paying for it, however, is another matter.

"We need an appropriate level of funding," said Nicholson, the president and CEO of the Keeneland Association. "We have not been adequately funded."

If the state is to implement any of the recommendations the task force plans to send to Gov. Steve Beshear by Dec. 1, Kentucky likely will have to loosen the purse strings.

From finding ways to increase purse structure to building a state-of-the-art drug-testing and research lab to expanding the staff at the Kentucky Horse Racing Commission, the task force sees plenty of potential for the state to remain what is sometimes referred to as the horse capital of the world.

"If you want to be a leader, you've got step up and be the best in every part of the game, including integrity," said Ron Geary, owner of Ellis Park. "That includes testing and laboratories."

Ideas like testing, however, will cost money. Some members of the task force hope legislators will revisit how the KHRC is funded to help find a way to pay for the changes the state needs to make to remain competitive.

The commission's funding comes out of the General Fund of the pari-mutuel excise tax. The tax generated $13.3 million for the state during the 2007-08 fiscal year, about $8 million of which went to industry-related costs. The remaining $5.3 million went into the General Fund, with the KHRC receiving $504,200. That number is projected to drop to $423,770 over the next two years.

Though the KHRC generates revenue through track assessments, licensing fees and fines, it would not be enough to cover the cost of adding staff positions like an auditor, a director of enforcement and a racing veterinarian. Getting a larger share from the General Fund would help offset many of the costs.

The KHRC projected it would face a $1 million shortfall at the end of the current fiscal year if it hired additional staff under the current budget format.

"When the task force is done and loses its limited life, it will see that the commission it taken care of," KHRC chairman Bob Beck said.

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Panel Wonders How to Fund Kentucky Racing