09/29/2009 4:27PM

FInding the right slot for slots

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Dillweed writes, “The popularity of horse betting in the US would explode if we legalized betting exchanges. Unfortunately, Churchill Downs, the NTRA, and the central Kentucky power brokers are against it. They think slots, which don't add a cent to the betting pools nor help the popularity of horse racing, are the answer. Think this sport needs new leadership?”

Dilweed, permit me to take what might be a contrarian view to many: the marriage of slot machines and thoroughbred racing can indeed be the key to the sport’s future.

But that’s only if revenues are used for the long-term benefit of racing.

And unfortunately, most potential benefits have so far been squandered.

The present blueprint is usually as follows. Racing leaders plead to lawmakers that survival of their tracks depends on slots, as does survival of breeding farms valuable to agricultural economy. Once slots are obtained, small chunks of profits go to casino overhead, purses, minor upgrades to racing facilities, and state coffers. The rest goes into the pockets of track owners and investors savvy enough and well-connected enough to cut a sweetheart deal in the first place.

It’s too late to revise history in states already swimming in the deep end of the gaming pool. It isn’t too late to learn valuable lessons from what they’ve done.        

At present, Kentucky and Maryland seem to be clamoring loudest for slots-to-save-the-sport.

 Here’s the answer they should get:

You want slots to save horse racing? Put your quarters where your rhetoric is. that is, every quarter of net revenues should go back to the racing product and state.

Churchill Downs Inc., Magna Entertainment (or whoever is running Laurel and Pimlico ), and their shareholders should get nothing in slots dividends. Zilch. Of course, they can still make a lot of money from the slots. But to benefit from the largesse of a state that approves expanded gaming, they should be required to use slots revenues in hopes of generating more profits for the please-save-me business used to obtain the gaming machines in the first place: horse racing.

Think about some of the problems facing the sport. Unprecedented competition for the gambling dollar. Outdated facilities. The tedium of long meets, and the cannibalism they create among neighboring tracks.

Now think about what a slots windfall used properly could mean.

You can’t turn back the clock on lotteries or sports betting or Native American casinos, but guaranteed mega-profits mandated for racing would give tracks financial freedom to dramatically cut pari-mutuel takeout to be more competitive with casino games (it’s what they should be doing, anyway, of course).

Facilities could be rebuilt to better compete with publicly-funded sports palaces that are spoiling football and baseball fans.

Without feeling a need to grind out small profits over a long calendar of racing, tracks could slash dates to improve quality, shoot purses up to dramatic levels and create regional circuits with stakes and TV schedules that actually make sense.

Racing would have the funding to properly market and promote itself.

Yes, exchange betting could even be instituted to spice up wagering menus without the present fear tracks have of tipping delicate financial scales in the wrong direction.

And states also would get badly-needed money for education or infrastructure or charities. Sure, they’ll probably blow it, but that’s an entirely different can of worms.

Pie in the sky? Perhaps. Tracks could cut dates and work together right now, and it ain’t happening. But slot machines at racetracks is already a reality, and money like that used wisely can solve a lot of problems, add to betting pools and increase the popularity of the sport.

      Racing has an unprecedented window of opportunity, and it's a window that likely won’t stay open forever.