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"NYS Assembly Committee on Racing Delves Into Economic Impacts of harness Racing"


ECONOMIC IMPACTS OF HARNESS RACING IN NEW YORK STATE

Testimony Submitted by the Standardbred Owners Association of New York to the NYS Assembly
Committee on Racing & Wagering

December 2013

Thank you Chairman Pretlow for the opportunity to present testimony on behalf of the Standardbred
Owners Association of New York, the Empire State Harness Horsemen's Alliance and harness horsemen
from across New York regarding the incredibly positive economic impacts generated by our harness
racing and agricultural industries across the state.


I thought I'd begin by reading a brief excerpt from a fact sheet submitted to state legislators in
the spring of 2003 by harness horsemen detailing what we anticipated would be the positive future
impacts of a New York video lottery terminal (VLT) initiative that was just about to come on-line.
We predicted:


if revenues from the VLTs are distributed equitably to horsemen, purses and breeders funds, then
this new program will not only generate a major new revenue stream for education, but also will
trigger a renaissance for the entire horse racing industry in the state. These funds will bring
more high-quality horses to New York tracks and make breeding a more lucrative industry in the
state. As more breeders come to New York and owners and trainers expand the number of horses in
their stables, numerous related industries will benefit indirectly. Clearly, one of the major
benefactors of the addition of VLTs at racetracks will be the agriculture industry."


Fast forward a decade later and virtually every one of those harness racing predictions higher
purses, expanded agriculture, thriving breeding farms, and tens of thousands of racing related jobs
across New York State has come true. As the Assembly noted in its own notice for this hearing, a
2011 economic impact study commissioned by New York's racing and agriculture stakeholders concluded
that our industry generated an overall $4.2 billion economic impact statewide and was responsible
for 33,000 jobs. So, not only have VLTs generated hundreds of millions of dollars in critical
funding for education across the state, but New Yorks harness

industry has returned to its rightful place as a national leader and the promise of a
New York racing renaissance has become a reality.


WHY THIS HISTORY IS IMPORTANT AND THE REASON HORSEMEN ARE NOW SERIOUSLY CONCERNED FOR THE FUTURE
As New York State prepares to undergo major changes to our gaming environment in the wake of the
recently-approved casino gaming amendment, it is critically important to fully understand the
significant economic gains that have taken place in the NY harness industry as a direct result of
the existing VLT initiative and, more significantly, to recognize the potential impacts that the
amendment's enacting
language could have on racing and agriculture. For example, as you are aware, this enacting
language includes a provision that mandates certain racing industry payments (derived from casino
gaming) be maintained at 2013 levels (with a small
cost of living adjustment based on the federal consumer price index). And while this provision -
which specifically relates to existing racinos that may receive a full casino gaming license and
morph into a casino has been characterized as a "floor" (ensuring that payments for purse support
and breeding do not fall below 2013
levels), the fact is that the language, as written, also acts as an absolute ceiling, capping
these payments at a virtually static 2013 level and not allowing for any future growth.


While we are obviously grateful for the creation of a hold harmless provision to ensure that
agriculture and racing jobs are not immediately negatively impacted, our concern is that this hard
cap on payments to agriculture and racing from casinos will essentially serve as a hard cap on any
future, additional growth in racing and agriculture. The message that this will send to potential
investors who, as you will see from my testimony below, have absolutely flocked to our state in
record numbers in recent years - is that New York may be doing well now, but is closed for future
business and has no horse breeding or racing investment opportunities available to them moving
forward. Other competing racing states have recognized that racing and breeding should grow right
along with casino gaming and the very real fear now resonating throughout farms, training
facilities and racetracks across New York is
that we'll not only fall behind in future growth, but that New York will eventually start to lose
some of the hard-fought gains weve already achieved. And to see exactly
what is at risk, one need only look at recent statistics and real life case studies from the
industry.


RACING AND AGRICULTURE-RELATED ECONOMIC IMPACTS OF VLTs IN NEW YORK STATE
The thoughtful, dual purpose VLT initiative implemented by New York State
charged with funding education and supporting a horse racing industry that is a
major job-generator across virtually every region of the state has increased purses and attracted
investment into our breeding and agriculture sectors like never before.

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New farms and training facilities are opening in regions across the state and our high-quality New
York Standardbred horses are commanding the highest prices by far at auction.


While my full submitted testimony has a wide range of statistics for your review, let me just
summarize by pointing out that virtually every indicator the number of mares in New York, stud
fees, sales prices, etc. has increased exponentially since
2001.


REAL LIFE CASE STUDIES DEMONSTRATE MULTI-MILLION DOLLAR ECONOMIC IMPACTS
The economic multiplier effects of this purse money on various sectors of the New
Yorks economy are really quite amazing. Again, my full written testimony includes a number of
very real, very concrete, very significant case studies that demonstrate
how VLT-generated purse money is filtering throughout our local economies and is attracting even
more investment across New York State. Needless to say, these cases from the $9 million in
capital investments at Blue Chip Farms to Mark Ford's
new $8 million dollar training center in Middletown are proof positive that purse money is being
directly invested back into the New York State economy. Clearly, this isnt just economic theory,
conjecture or even predictions from a decade ago. These are proven, on-the-ground economic gains in
communities throughout New York State that are taking place thanks to our harness racing industry.


HOW CAN WE ENSURE FUTURE JOB CREATION AND GROWTH?
In light of all of these clear and positive economic gains, it should come as no surprise that
horsemen, breeders, farmers and tens of thousands of others who are dependent on racing for their
livelihoods are deeply concerned about how the coming expansion of casino gaming in New York State
will impact these important economic benefits. As noted earlier, other competing racing states have
recognized that racing and breeding should grow right along with casino gaming, so one must ask why
horsemen or breeders would invest additional resources or even keep their existing horses already
here in New York - when they can anticipate greater additional growth in nearby states? With
33,000 New York State equine jobs at stake, it obviously makes complete sense to have a "hold
harmless" provision to ensure that agriculture and breeding dont get hurt by the expansion of full
casino gaming. However, what is less clear is the economic or policy rationale for capping racing
industry support payments at 2013 levels for racinos that become full casinos and not allowing the
opportunity for any future growth or investment in a critically important, proven, job-creating New
York industry. Recent record sales numbers by New York-bred horses at national sales demonstrate
that breeding gains are continuing apace and there is no doubt that significant opportunities for
additional growth in our agricultural sector exist across the state.










































































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Within this clear and compelling economic context, the SOA of New York and harness horsemen from
across the state are asking the New York State Legislature to reevaluate and reconsider the
specific provision included in the casino enacting legislation that mandates a cap on racing
industry support levels at the 2013 level. While eliminating this cap would obviously require the
creation of a new formula for
determining reasonable and appropriate levels of industry support payments from full casino gaming
(including both slots and table games), we are committed to working collaboratively with both
legislators and gaming industry stakeholders to develop a workable solution. Our experience with
the existing VLT initiative has shown that it
is possible to create win-win-win scenarios, and we look forward to working with you
and your colleagues to continue to support and grow equine industry jobs in the great state of New
York. Thank you.


CONTACTS:
Joe Faraldo, Standardbred Owners Association of NY 718-544-
6800
Joni Yoswein, Yoswein New York (representing the SOA of NY) 212-233-5700

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