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Kentucky commits additional money to regulator

Posted: Monday, June 29, 2009 8:00 PM

by Frank Angst

The Kentucky Horse Racing Commission will receive a significant boost in state funding in the coming fiscal year to carry out its duties.

The commission will receive an additional $2,663,100 from the state general fund in fiscal year 2010 after receiving less than $450,000 from the general fund in fiscal year ’09. The approximate $3.1-million from this fund combined with about $1.5-million in licensing fees and fines will give the KHRC a $4.6-million budget in 2010.

The increased funding will not result in any additional takeout for horseplayers or fees for horse owners or racetracks. The money will come from the general fund, to which horse racing typically contributes more than $5-million.

KHRC Executive Director Lisa Underwood said the additional funding would allow the commission to meet some of its mandated staffing issues, including the hire of a full-time director of pari-mutuel wagering and an auditor, while also increasing enforcement staff.

The KHRC has documented the relatively small amount of its operating budget compared to other top racing states. A report released this year by the Governor’s Task Force on the Future of Horse Racing noted states like New York, California, Pennsylvania, New Jersey, and Florida all spent significantly more money on regulation.

“I think we were able to get the message out,” Underwood said.

In fiscal year ‘07, the Kentucky regulator received $1.7-million from the general fund but that allotment was cut to $504,200 in ’08 and $423,700 in ’09. The commission was able to carry out its operations in ’09 only because it used $758,000 from its reserves, which would have been depleted in 2010 and would have resulted in a deficit of more than $1-million.

While the task force recommended funding options that included up to a .245% increase in takeout, dedicating sales taxes on claimed horses to the commission, or charging owners a per-start fee, none of those options were used. The money is coming from the general fund.

KHRC funding also will not rely on track assessments, which had been as high as $1,349,500 in 2006 before being discontinued in ’07. In ’09, the commission received $355,000 in track assessments, which charge racing association when commission employees work at their tracks.

In all, the commission’s funding in fiscal year 2010 will be about twice as much compared to the $2.3-million received in ’09.

Frank Angst is senior writer for Thoroughbred Times