Recent Audit Discovers Millions Accumulate In Massachusetts Race Horse Fund
Massachusetts casino revenues are spread amongst many public services throughout the state, benefitting things such as education, transportation, and tourism.
One of the destinations for the money is the Race Horse Development Fund (RHDF) that supports both thoroughbred and standardbred horse racing in the state.
During a recent audit of the Massachusetts Gaming Commission, however, it was found that money directed toward thoroughbred racing, which hasn’t taken place since 2019, is sitting untouched in the fund and piling up each month. This raised questions on why this has happened, and what to do with the money moving forward.
How has the money piled up?
The RHDF was created in 2011 as a part of the law that legalized casinos in Massachusetts.
It was intended to aid both standardbred and thoroughbred racing in several aspects, with 80% of the money going toward purses, 16% to promoting horse breeding in the state, and the remaining 4% allocated for benefits for jockeys, sulky drivers, and trainers.
The problem lies in the fact that thoroughbred horse racing in Massachusetts hasn’t occurred since June 2019, and only standardbred races have been able to make use of the fund. In 2020, there were 68 standardbred races in Massachusetts that used $6.8 million for purses and $1.4 million for breeding while generating over $500 thousand in gambling revenue. On the other hand, there were zero thoroughbred races, with only $280,000 being used from the fund for breeding purposes.
In total, in fiscal year 2020, spending from the fund was nearly cut in half from $17 million to $8.7 million, while casinos experienced some of their most profitable months ever, which exacerbated the issue. As of the end of August, there was just over $20 million in the fund.
What will happen with the money?
While there are several different proposals for what should happen to the money, something must be done. Auditor Suzanne Bump acknowledged this in her audit report, saying in a Boston 25 News story:
“While MGC has done a noteworthy job managing the state’s emerging gaming industry, our audit makes clear the Commission should bring all relevant stakeholders to the table to consider the Race Horse Development Fund’s most effective use. This consultation and collaborative effort would enhance oversight of the fund, and would benefit breeders, owners, and the industry as a whole.”
Some progress has been made on the issue, with the MGC enacting a change in the revenue share for standardbred racing.
Standardbred racing will get 92% of the purse money in the fund up from 70%, breeding shares will increase from 70 to 75%, and the benefits share will increase by 10% from 40 to now 50%.
That is a lot of numbers to take in, but it doesn’t conflict with the buckets mentioned earlier that make up the 80/16/4 split for the fund in total. Those figures remain the same, but the standardbred industry simply gets a larger share of those funds for itself.
With several solutions sure to be examined, it is worth noting what the standardbred industry wants to do with the money seeing as they already benefit from the fund.
Standardbred industry representatives told the MGC that they want the money to go into an escrow account so that if thoroughbred racing does get started back up in the state, it has some money to help get it off the ground.
With such a large amount of money at stake, whether the money stays in the RHDF to benefit the horse racing world or is shifted to another industry, the MGC will soon have a substantial decision on its hands.