Uncertainty bedevils horse-racing industry

Anthony DeFrancesco III fell in love with horse racing shortly before America began to fall out of love with it, when places such as Liberty Bell Park in Northeast Philadelphia still drew a Saturday night crowd.

At 15 - two years before Liberty Bell closed in 1986 - DeFrancesco dropped out of junior high school to become a groom. His first horse was Blue Steel, a standardbred he cleaned, fed, and jogged.

"It's my passion. It's what I do," DeFrancesco said last week in the stables of Harrah's Philadelphia in Chester. "It doesn't sound normal for some."

Now a horse trainer, the South Philadelphian is among the 23,000 people whose jobs - normal or not - may hang in the balance as state lawmakers and horse-racing industry officials try to avert the closure of Pennsylvania's six racetracks.

Last month, Gov. Wolf threatened to shut down the tracks if the industry failed to shoulder the costs of regulation, which includes drug testing of horses.

Industry leaders said they were willing to take on the burden, but the details are still being ironed out. Negotiations are to continue this week. But the situation underscores a far deeper problem, which, despite this weekend's high-profile Breeders' Cup, is horse racing's gradual disappearance from mainstream American culture.

"If you go to the track now, it's the same people who were there when I was a kid," DeFrancesco said. "They're walking up to bet with a cane and a walker."

Things are so bad that horse betting can no longer support the costs of regulation, and purses are inflated only by controversial tax revenue from slot machines.

America has moved on. Still, the economic imprint remains important to a segment of Pennsylvanians, totaling about $1.6 billion a year in the state.

For that reason, experts say horse racing is likely to continue in Pennsylvania despite the current battle over regulation costs and Wolf's threat.

The main concern among people such as DeFrancesco is preserving the flow of slot-machine money. Last year's infusion was $230 million.

"The deal was: You can have your slots, and we can race," he said of the 2004 law that legalized gaming in Pennsylvania. "Where else should the money go? To the public schools in Philadelphia that are dilapidated?"

Known around the stables as "Porkchop," DeFrancesco spent Thursday morning at Harrah's working out a dark-colored standardbred named Pow Chicka Pow Pow.

The 5-year-old was set to race that afternoon, but his prospects were poor. He drew the eighth slot, on the track's far outside. He had been running a full second behind, which amounts to the length of five horses.

His owner, Louis A. DiTullio, of Glenside, said Pow Chicka Pow Pow probably was the "biggest problem horse I've ever had."

A retired mortgage lender, DiTullio, 70, has owned horses off and on for 30 years. He says he's happy if he covers expenses.

"These are average, everyday, hardworking people trying to make an honest living," he said, pointing to the bustling stables at Harrah's. "People think horse racing is for millionaires. They're the exception."

Pow Chicka Pow Pow's groom was Alberta "Bert" Freitas, 47, of Mullica Hill. She said grooms make $400 to $1,000 a week.

"It's not the same as it used to be," she said, tucking the horse's tongue in place before the race. "The purses go up, but the pay is the same."

In recent years, there had been a reckoning of sorts in some states over horse racing and its viability.

Racetracks in Texas, for instance, shut down briefly in August as lawmakers fought over implementation of a slot-machine-like game that struggling tracks hope will generate revenue. In Illinois, the industry backs a bill to expand gambling, including slots, to get more money for purses.

In Pennsylvania, the issue has become the insolvent state racing fund, which pays for licensing, safety measures, staffing of an equine laboratory, and drug testing of horses.

The fund is supported largely by revenue from wagers, which have declined 71 percent since 2001 to $427 million. The fund now has a shortfall of about $10 million. The state faced a similar crisis in 2013.

"There is nothing you can do to bring the bet back," DeFrancesco said.

The state has replenished the fund from other places in the budget, including the Race Horse Development Fund, which provides purse money and benefits to horsemen. That fund is filled with money from slot machines.

The current negotiations in Harrisburg focus on ideas originally introduced in a bill by State Sen. Elder Vogel (R., Beaver). The bill would place the $9 million burden of drug testing and other costs on the industry.

Horse-racing folks said they knew this moment was coming, although they were blindsided by Wolf's threat. The administration said it had no choice but to face the "hard truths" of the situation.

Horse racing has been in hard decline for a third of a century, said Bennett Liebman, a government lawyer-in-residence at Albany Law School and a former deputy secretary for gaming and racing in New York. Reasons, he said, include competition from other forms of gambling, such as slot machines, and the challenge of handicapping horses.

Bennett says he doubts Harrisburg will let horse racing wither by stopping the flow of slots revenue.

A few seconds after he started his race at Harrah's on Thursday, Pow Chicka Pow Pow was dead last. "This is not going to work out too well," said DiTullio, his owner.

But less than two minutes later, in front of about 50 spectators, the horse finished fifth. Bettors won nothing. But it meant that 5 percent of the race's $9,000 purse, $450, went to the horse's team: owner DiTullio, trainer DeFrancesco, and the driver.

"The world has got to keep going around," DeFrancesco said. "This is a job for a lot of people. So why don't we keep it around if we can."

bfinley@phillynews.com

610-313-8118@Ben_Finley