10/11/2004 11:00PM

After long wait, slots on road to reality


NEW ORLEANS - The aggrieved horsemen are satisfied. The bankrupt track owner is emerging from his deep hole. The neighbors are resigned and wish the track well. Optimism has trumped anxiety in New Orleans. Churchill Downs is coming to Fair Grounds, and so are slot machines, eventually.

Last September, Fair Grounds president Bryan Krantz was conducting a "Save Our Fairgrounds" campaign for slot machines to benefit his family-owned racetrack. He warned that the end of Fair Grounds was nigh unless voters approved a proposition that would allow him to install up to 500 slot machines at the historic track, nestled between the Gentilly and Faubourg St. John sections of New Orleans.

Residents responded by parading through the neighborhood - with the Storyville Stompers Brass Band leading the way - carrying oversized effigies of slot machines and dumping them in the bayou near the track. Most New Orleans voters felt differently, however, and approved the measure by 58 to 42 percent, sanctioning the first racetrack-based slots in a residential neighborhood in Louisiana.

A year later, Krantz is on the verge of emerging from Chapter 11 bankruptcy protection by selling Fair Grounds to Churchill Downs Inc. But there are still no slot machines, and, as a result, no purse increases expected for the upcoming year.

When the deal closes this week, Churchill will own the third-oldest horse track in America, and Krantz will be a paid consultant of CDI. Fair Grounds was established in 1872, and only Saratoga (1864) and Pimlico (1870) are older.

Part of Krantz's new job will be to guide CDI through the process of opening a slots parlor. In order to make real the voter-approved slot machines and their projected $30 million a year in revenue, CDI must win approval for the use of current structures to house the slot machines, or it must plan and build a new structure. In either scenario, CDI's plans must get through the City Planning Commission and then be approved by the New Orleans City Council. Whether slot machines are coming is no longer contested; the question now is how and when.

City Councilman Jay Batt, whose district includes Fair Grounds and some of the adjoining neighborhoods, awaits a proposal from Churchill Downs.

"I will evaluate the proposal and consider the impact on the neighborhood, looking at hours of operation, landscaping, security, and parking concerns, just like if you were putting in a department store," Batt said.

Even Thomas Usdin, president of the Faubourg St. John Neighborhood Association, concedes that the installation of slot machines is likely.

"I'm concerned because we had a local owner and we had some assurances concerning the slot machines," Usdin said. "There's concern any time you have an out-of-town owner with no dialogue. We hope they are going to be attentive. We see it [the arrival of slots] as a likelihood. The Fair Grounds has been here a long time, and we want them to succeed."

For its part, Churchill Downs seems intent on courting the community.

"It's important to us to be a good neighbor and a good corporate citizen," said Julie Koenig Loignon, director of communications for CDI. "Before the first set of blueprints are drawn up, we want to involve the community. As a result, we have no timetable."

When the slot machines do come, they will replace the video poker machines that were supposed to have saved Fair Grounds 12 years ago. While proceeds from video poker did result in higher purses, it created a festering dispute with the Horsemen's Benevolent and Protective Association about how to divide the bounty. The horsemen won a $90 million judgment against Fair Grounds, forcing the track to seek Chapter 11 bankruptcy protection. Only after the HBPA's recent decision to accept a $25 million settlement over the video poker revenue was Churchill Downs able to buy the track.

Video poker was licensed in 1992 as a tavern game, with a maximum bet of $2 and a maximum payout of $500 except at horse tracks, which are allowed a maximum payout of $1,000. Slots are a pure casino game, with no maximum bet or payout, and may be linked to other machines to offer progressives of more than a million dollars.

Oran Trahan, president of the horsemen's group, said the horsemen are glad to have the litigation settled.

"Most of them are satisfied," Trahan said. "We're glad to be putting this behind us. The slots are going to be great. We need them."

When asked whether he was worried about slots becoming as problematic as video poker proved to be, Trahan replied: "It will not repeat itself. We have since hired a good auditor who makes sure our money is accounted for."

After the last few years of uncertainty for Fair Grounds, most people in the city seem eager for the new era to begin.

"The neighborhood recognizes the success of Churchill Downs, and we're thrilled to have them in the neighborhood," said Batt, the councilman. "The neighbors of the Fair Grounds would like to see not a huge change - basically status quo. We want the neighborhood to feel as little impact as possible, and we want Churchill Downs and the Fair Grounds to flourish."