What legislators envisioned as a major cut in greyhound racing subsidies will actually have a bigger impact on West Virginia's two thoroughbred racetracks, members of the state Racing Commission learned Tuesday.
However, what looks like a $4.1 million funding cut on paper will only be about half that amount, because of ongoing declines in the racetrack video lottery revenue that funds the racing subsidies, acting executive director Joe Moore told the commission.
In the budget bill passed June 14, the Legislature cut the portion of racetrack purse fund subsidies that it has authority to appropriate from $14.1 million to $10 million and renamed the line item from the "Licensed Racetrack Regular Purse Fund," to the "Licensed Racetrack Thoroughbred Regular Purse Fund."
As Moore explained Tuesday, "They said, 'We're going to appropriate $10 million, but we're only going to appropriate it to the thoroughbred purse fund.' "
In signing the budget bill on June 17, though, Gov. Earl Ray Tomblin line-item vetoed the designation for thoroughbred racing only, stating that it is unconstitutional for the Legislature to "use an unauthorized insertion in the budget bill to undermine general law."
That action restores the share of funding that goes for greyhound purses but does not restore the $4.1 million cut in the appropriation. However, Moore said Tuesday that the $4.1 million funding cut in the budget isn't really $4.1 million, since the racetrack video lottery profits used to provide the appropriation have been declining.
For the current budget year, what appears in the budget as a $14.1 million appropriation will actually come in at about $12 million, Moore said.
Because the purse fund subsidies are allocated on a pro-rated basis, based on each racetrack casino's share of video lottery profits, based on current revenue, Moore said reducing the appropriation from about $12 million to $10 million would mean the purse fund cuts would be:
n Charles Town Races, about $1 million
n Mountaineer Race Track, about $500,000
n Wheeling Island greyhound racetrack, about $400,000
n Mardi Gras greyhound racetrack, about $200,000
However, Moore noted that the Lottery Commission is projecting a downturn in video lottery revenue for the Charles Town casino once the $1.3 billion MGM National Harbor casino resort opens in nearby Northern Virginia in December.
Based on adjustments for the projected 2016-17 video lottery revenue, Moore said, Charles Town would stand to lose about $1.2 million in purse funds, Mountaineer would receive approximately the same purse fund appropriation, and Wheeling Island and Mardi Gras would each lose about $450,000.
In perspective, overall state subsidies for thoroughbred and greyhound racing total more than $65 million a year.
Also Tuesday, commissioners asked Deputy Attorney General Kelli Talbott to draft procedural rules that would require racetrack personnel to post bond to appeal fines handed down by track stewards and track judges for minor infractions.
In April, commissioners raised concerns that the already cashed-strapped Racing Commission is having to spend thousands of dollars to hear appeals for fines of as little as $100.
Currently, track personnel can appeal rulings of track stewards and track judges by paying a $100 filing fee. For the commission, each appeal brings a multitude of expenses, including having to hire a hearing examiner and a court reporter, and paying Talbott's attorney fees to represent the commission, as well as reimbursing travel expenses and, frequently, renting space for the hearing.
"When we talk of a hearing examiner, we're talking of an attorney billing at attorney rates," said Commissioner Greg McDermott, who practices law in Wheeling.
"I would say it's a $4,000-$5,000 average range," Moore said of average costs to the commission of each appeal hearing.
In April, commissioners discussed an appeal hearing that cost the commission more than $15,000, in a case that involved a horse trainer who was fined $500 for an altercation at the racetrack.
"It would seem reasonable to me to raise the fee and also consider requiring a $5,000 bond," said Commissioner Bill Phillips.
Commission Chairman Jack Rossi asked Talbott to have the draft rules ready for consideration at the commission's August meeting.
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.