HARRISBURG — The state’s horse racing industry is in jeopardy, and the state Department of Agriculture has improperly billed the State Racing Fund to cover budget shortfalls, according to a report released Wednesday.
The Department of Agriculture overbilled the fund by $873,206 for three years to cover budget shortfalls and directly billed another $5.2 million over four years for personnel costs “it could not appropriately document,” according to state Auditor General Eugene DePasquale’s report .
The Department of Agriculture disputed the findings.
“The Department does not charge the State Racing Fund simply to balance its own budget,” it stated in a section of the report devoted to the department’s response.
The State Racing Fund was created in 1981 and collects revenue from sources such as admission and wagering taxes to pay for regulatory and oversight activities for the horse racing industry, safety measures to protect jockeys and staff for the labs that conduct drug testing.
The amount of revenue going into the racing fund has declined in recent years due to competition from casinos and online gaming.
Racing industry groups said the report confirmed long-held suspicions.
“We knew that there had been irregularities over the years, and we had complained to whoever we could complain to,” said Kim Hankins, executive director of the Meadows Standardbred Owners Association, a trade association of owners, trainers and drivers of Standardbred horse racing at The Meadows Racetrack and Casino in Washington County.
“We’re pleased that the AG found what our suspicions were,” Mr. Hankins said. “The recommendations [that the auditor general made] are totally appropriate.”
The report recommended updating licensing and other fees that were implemented in 1981, adding additional funding options and prohibiting the Department of Agriculture from charging the fund for personnel expenses not directly related to the horse racing industry.
“This report confirms what the Pennsylvania racing industry has been saying for a number of years: that money intended for the operation of the state’s racing commissions and for breeders incentives was improperly diverted for other purposes,” said a statement from the Pennsylvania Equine Coalition.
The full report is available at www.auditorgen.state.pa.us.
Kate Giammarise: 717-787-4254 or firstname.lastname@example.org or on Twitter @KateGiammarise.