Senate Finance subcommittee hears testimony on South Carolina Equine Advancement Act

Columbia — The Senate Finance Subcommittee held a hearing on the South Carolina Equine Advancement Act on a bill to authorize advanced deposit wagering (ADW) on live horse racing, create a state Equine Commission and establish an Equine Industry Development Fund funded by a 5% takeout on in‑state wagers.

Senator Johnson, the bill’s primary sponsor, told the subcommittee the measure is intended “to improve the equine industry in our state” and to preserve racing, breeding and training operations that he said otherwise are being lured to other states. “This is a while it is a similar bill, it is also much narrower,” Johnson said, adding the bill is written to allow ADW betting only on live horse racing and not on slot machines or other gaming.

The bill as summarized by Grant Gibson, Senate Finance committee staff analyst, would: define ADW-related terms; create the South Carolina Equine Commission (comprised of the Department of Revenue director or designee, two appointees each from the Senate president and House speaker and two gubernatorial appointees); authorize one‑year ADW licenses with a $5,000 initial application fee and $1,000 annual renewal fee; require a monthly license fee of 1% of wagers paid to the commission; require an annual 5% fee of wagers to be deposited into a newly created Equine Industry Development Fund; and direct the commission to promulgate grant program regulations within 12 months of the act’s effective date. The legislation also prohibits persons under 18 from pari‑mutuel wagering and, if enacted, would require the commission to authorize and license qualified ADW applicants for use by April 1, 2026, Gibson said.

Witnesses representing the industry urged passage, saying the bill would capture wagering money now bet illegally out of state and channel it into grants and incentives for breeders, training centers and youth and vocational programs. Brandon Dermody, managing partner of the Southern Group and a part‑owner of Del Rio Racing, said a 2019 industry study estimated South Carolina’s equine sector supports roughly 30,000 rural jobs, is about a $1.9 billion industry and includes about 73,000 registered horses. “Our main objective here is two things. One is to provide incentives that we can continue to grow our sport and save those areas where the sport and the equine industry are not doing well,” Dermody said. He told senators the bill removes a prior three‑license cap, lowers domicile requirements for operators and narrows the measure to live racing only.

Kip Elser, a trainer in Camden and a representative of the South Carolina Thoroughbred Owners and Breeders Association and the South Carolina Equine Council, said competing states including Virginia and Louisiana are offering incentives that drain horses, trainers and jobs from South Carolina. Elser said the bill’s proposed 5% allocation to the development fund is consistent with takeout levels used elsewhere and estimated that, based on consultant projections, capturing roughly $40 million in wagers would generate about $2 million annually for the fund.

Frank Mullins, president of the Aiken Steeplechase, described a visible decline in stabled horses and facilities in Aiken and other towns and urged lawmakers to consider the bill as a way to “be competitive with other states where the equine world is thriving.” Mullins said grants from the fund would target “broad programs” such as facility refurbishment, supplemental purses, vocational training and veterinary education rather than direct payments to individuals.

Emma King, representing Churchill Downs and its TwinSpires ADW platform, testified the company has operated ADW services for more than 18 years and is prepared to enter South Carolina. King noted the bill’s fee structure would make South Carolina among the highest‑taxed jurisdictions for pari‑mutuel wagering but said TwinSpires nonetheless would participate. “When one is successful, the other is as well,” King said, describing the ADW and live‑racing sectors as mutually reinforcing.

Senators asked questions about how ADW products work, where and how patrons may place bets, who negotiates track fees and whether tracks can bar ADW wagering on premises. Senator from Orangeburg asked whether a person in Orangeburg could place a bet on a Camden race via a licensed app; witnesses confirmed bettors would be able to wager from anywhere in the state that is geolocated and authorized. Senators also discussed the bill’s removal of a domicile requirement for operators — a concession, Dermody said, made in negotiations with national ADW operators.

No vote was taken. Chairman Young said this would not be the only hearing and that he intends to hold multiple subcommittee sessions before the measure is considered by the full Senate Finance Committee. The subcommittee adjourned and said it will reconvene at the call of the chair.

Proponents framed the bill as a self‑funding way to support rural jobs, training centers, veterinary services and green space preservation by capturing wagering that they say now flows to other states; opponents in previous sessions have raised concerns about gambling expansion and operator oversight, but those objections were not the focus of today’s testimony.

The subcommittee record includes written material and a staff summary; the bill would take effect on the governor’s approval if enacted and requires the commission to form within 60 days of enactment and adopt grant regulations within 12 months.