As the Pennsylvania state budget impasse drags on, with essential funding for public transit a main sticking point, some of the unusual ways the Commonwealth spends tax dollars necessarily begin to attract scrutiny. One of the most unusual of all is the Race Horse Development Fund, into which the state pours about $200 million each year.

As legislators search between the cushions of State Capitol couches to find money for transportation, education, human services and more, horse-racing subsidies must be on the list of possible cuts to invest elsewhere.

ACROSS THE BOARD

It’s hard to find an example of government spending as disliked across the ideological spectrum as the Race Horse Development Fund. The Commonwealth Foundation, a Harrisburg-based conservative-libertarian think tank, has inveighed against the subsidies as a “symbol of government waste.” In 2020, when then-Gov. Tom Wolf proposed to close out the fund in favor of a statewide scholarship program, education advocates created a website called “Fund kids over horse racing.”

Animal rights advocates deplore the sport in its entirety; Patrick Battuello, an anti-horse-racing activist, said to the online publication City & State last year that Pennsylvania is subsidizing “an industry that the American public has largely rejected.” Just this week, a Philadelphia-based transit advocate published an opinion article in the Philadelphia Inquirer arguing that the fund should be ended and the monies used for transit: “Apparently, we can’t afford to keep reliable buses and trains running in the state, but we can afford to keep the horse racing industry on life support.”

Given the dire need for transit funding, and Harrisburg’s rules against counties raising the money on their own, we agree with this last one: $200 million would go a lot farther in terms of quality of life and economic impact if it were invested in transit, not a legacy gambling industry.

UNNECESSARY SUBSIDY

How did we get to the point where Pennsylvania, a state hardly known as a cradle of thoroughbreds, offers among the highest horse-racing subsidies in the country? It goes back to the legalization of slot machines in 2004.

No one is more threatened by gambling expansion than incumbent gambling interests, and for decades horse racing had been the only legal form of gambling in Pennsylvania. As part of the complex negotiations over casino legalization, legislators settled on awarding seven licenses to racetracks (six remain in operation), while also setting aside a little more than one-tenth of slots tax revenue for the support and promotion of horse racing.

In some years, this has meant nearly $300 million for the Race Horse Development Fund. After modest declines in slots revenue due to competing gaming options, that’s down to about $200 million today. The vast majority of those funds are set aside to boost purses for races taking place in Pennsylvania, which means of the money goes out of the state and even the country, with oligarchs from Middle Eastern nations among those reaping the benefits.

The industry’s supporters argue that without the funds, at least some of which filter down to Pennsylvania farms that raise horses or otherwise support the equine industry, fewer races would be run and fewer horses — along with all the workers who support them — would reside in the Commonwealth. The Pennsylvania Horsemen’s Benevolent and Protective Association (PHBPA) reports that horse racing generates $1.6 billion in annual economic activity, while the “equine community” as a whole generates $4 billion annually.

Yet, despite generous subsidies, Pennsylvania’s equine industry is actually in serious decline. In 2023, the Jockey Club reports that 480 thoroughbred foals were born in the state, 2.6% of the nationwide crop. Compare that to over 1,500 in 2010, when Pennsylvania accounted for over 5% of America’s baby thoroughbreds. Meanwhile, attendance at racetracks is down about half from two generations ago.

One area where the subsidies have generated growth, unsurprisingly, is in lobbying activity. The four main equine associations — the Pennsylvania Horse Breeders Association, the Pennsylvania Harness Horsemen’s Association, the Pennsylvania Thoroughbred Horsemen’s Association and PHBPA — combine for over $350,000 in lobbying expenses per year, according to state records. And their affiliated PACs have spent nearly $300,000 thus far in 2025 alone.

BETTER USES

If Pennsylvania were cash-flush; if the Commonwealth robustly funded baseline services; if Harrisburg ran a consistent surplus — then it might be sensible, as a kind of luxury, to prop up a legacy leisure industry. But none of those things are the case.

Instead, state legislators are pinching pennies trying to find money for everything from trains and buses to support for people with profound disabilities. The funding request from Pittsburgh Regional Transit, for instance, to be able to maintain its current service level for over 100,000 monthly riders in a sustainable way is a little less than $120 million. That’s $80 million less than a subsidy for an industry most Pennsylvanians are dimly aware exists, and even fewer patronize or participate in at any level.

Drawing down the Race Horse Development Fund won’t be easy. It has a privileged place in state law — its monies are not even considered to belong to the Commonwealth — that protects it from being raided, as former Gov. Tom Corbett did, and Mr. Wolf tried to. Existing funds will have to be used for their designated purposes.

But the deposits into the fund can be slowed, and eventually stopped. It has been more than two decades since the original compromise that created the fund, more than enough time to satisfy political obligations and to analyze the fund’s success. Subsidies cannot be permanent, and must be responsive to changing circumstances.

There are numerous more effective uses of $200 million than propping up Pennsylvania’s thoroughbred industry — including, above all, public transit. It’s time to bring the Race Horse Development Fund to a close.

— Pittsburgh Post-Gazette via TNS