03/20/2012 8:15AM

Beyer: Slots-racing marriage on the rocks

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At a time when the horse racing business has suffered serious a decline, one segment of the sport is enjoying a bonanza. These are great times for horsemen in states where purses are subsidized by revenue from slot machines.

Owners and trainers at Parx Racing — the former Philadelphia Park — must think that they have died and gone to heaven when they run a bottom-level $5,000 claimer in a race with a $25,000 purse — plus a bonus if the animal was bred in Pennsylvania. Horsemen at minor-league tracks such as Charles Town (W.Va.) Presque Isle Downs (Pa.), and Zia Park (N.M.) regularly compete for big-league purses because of slot money.

These windfalls exist because many states, when they legalized slots, opted to install them in racetracks and decided to aid the sport by earmarking a certain percentage of revenues for purses and breeder awards. But what the state gives, the state can take away, and many are taking a fresh look at their largesse to the horse business:

◗ In Pennsylvania, Gov. Tom Corbett has proposed cutting $72 million of subsidies to horse racing and breeding to pay for other agricultural projects.

◗ In Ontario, the provincial government has proposed ending all slots payments to the horse racing industry as of 2013.

◗ In Indiana, the state’s inspector general advocated slashing the subsidy for horse racing.

◗ In New Jersey, Gov. Chris Christie ended state support of racing and blasted leaders of the sport for “extorting the taxpayers for millions of dollars in subsidies to their industry.”

Horsemen have reacted with shock and outrage to such proposals, but they should have seen these haymakers coming. Many state governments are under severe financial pressure and are struggling to maintain basic services for their citizens. As politicians look for sources of revenue, they can’t ignore the millions of dollars now flowing into horse racing, and they can readily frame populist arguments that the money is being misallocated. Christie said: “I am no longer going to permit millionaire horsemen to take money . . . from the taxpayers of the state to fund their industry.”

In Ontario, Education Minister Laurel Broten sent out a press release declaring, “We simply can’t afford to support . . . horse racing subsidies . . . when the . . . money could get better health care for our seniors and full-day kindergarten for our 4- and 5-year-olds.”

In most places, the racing/slot machine relationships developed along similar lines. In some cases, a racetrack couldn’t survive on its own merits, but it was such an important part of its community that the public supported legalizing slots to keep it alive. (This was the case at Charles Town.) In others, proposals for legalized slots faced a lot of not-in-my-backyard opposition, and the perfect answer was to put the slots in an existing gambling facility – a racetrack. The track, of course, got a percentage of the profits for running the operation. The rationale for allotting money to purses and breeders’ awards (rather than, say, health care for seniors) was to revive the sport by improving the product and attracting more fans.

But every racing fan knows what happened instead. When slots were legalized, the machines proved to be so lucrative many track owners lost interest in the sport and viewed it as a nuisance. They made no effort to improve the game or attract new fans; slot players are more profitable customers. The day-to-day racing at tracks such as Parx and Delaware Park is just about as dreary as it was before slots inflated the purses. One track that has made the most of slots money is Woodbine, in Toronto, which offers some of the best daily cards on the continent and uses its resources to promote the sport and to create new horseplayers. But Woodbine is a rarity.

More often, slot money props up tracks that have virtually no fan base and couldn’t exist on their own merits. This is true of most harness and dog tracks, and some Thoroughbred operations – such as Presque Isle Downs. Two previous racetracks in Erie, Pa., went broke from lack of support. Presque Isle was built when slots were legalized in the state, and it had to be a racetrack to get the machines, but its racing business is as pitiful as that of its predecessors. The track’s average attendance last season was 705, and those customers bet an average of $35,000 per day on the live product. Yet Presque Isle pays huge purses – more than $200,000 a day.

While the money has benefited owners, trainers, and Pennsylvania breeders, it has done nothing to popularize or improve horse racing. On the contrary, it has hurt the sport in some ways. At a time when almost every track is suffering from a shortage of Thoroughbreds, the horses who go to Erie could be running at viable tracks, helping them to offer a better product, instead of racing in a place where almost nobody watches them.

Too many people in the Thoroughbred industry are content with the status quo. In the crowded Mid-Atlantic region, racetracks should agree to pare down their schedules, offering fewer races with larger fields that fans want to bet. But horsemen habitually resist such cutbacks, and most tracks continue to lose fans.

However, the status quo is unsustainable because more and more politicians will be asking: Why should we subsidize a sport that so few people care about? Why should we help an industry that won’t help itself? And Thoroughbred racing can offer no good responses to these questions.

© 2012 The Washington Post

David Cline More than 1 year ago
What about the employees working at these venues. They are not being paid as well as could be.The owners are the only ones running to the bank as always on the back of the workers.The take out should be less to allow the customers the chance to win more and when they win more they bet more which means the racetrack owners receive more.Cut back on the amount of races run no matter how much the horse owners cry.Treat the customers well with respect and the business will soar.Have entertainment at these tracks that appeal to the customers and not that nonsense bands that nobody heard of or like.IMPROVE THE GAME AND THE PEOPLE WILL RETURN!!!!!!!!
rudeboyelvis1 More than 1 year ago
The take out rate in PA is 30% or higher on most exotics, depending on the track - no one bets these tracks because you'd have to be an abject fool to - has very little to do with the casinos, except they are stuck with supplementing a completely broken business model - no wonder they want the tracks out. Here's an idea, lower the take out to something remotely attractive to the average horse bettor and see what happens to your pools
Darren More than 1 year ago
Sports and entertainment spike in popularity is through its stars. Unfortunately, horse racings stars are retired to stud before the public has an opportunity to get caught up in their stories. The fate of horse racing rests with the filly and mare division. My hope is that Harve de Grace (like Zenyatta) can compete with the boys in the Classic and represent herself well and capture Americas imagination as well.
Robin Dawson More than 1 year ago
Last Fall the Jockey Club invested a considerable amount of money in a report by McKinsey that, in a nutshell, declared the future of racing would be dictated by Social Media. The silence, so far, has been deafening. However, at the risk of seeming to be even more arrogant than them, and embracing this very vehicle, I would like to send anyone who is interested a proposal that sums up many of the sentiments expressed in this blog, and which, if properly implimented, would go a long way towards re-introducing America to " The Track "....just e-mail me at rddcan@gmail.com and I'll forward it and its interactive component to you. Its FREE.
todd More than 1 year ago
It's pretty sad when a stance is taken legislatively where politicians embrace the idea that slot locations will be allowed to turn their profitable backs on the very properties that made slots possible to begin with. What next - horse bettors won't be allowed to use the bathrooms in the casino? A darn shame (albeit nothing new) that the mad scramble to shift monies will begin at the place where it is generated. Furthermore, here in Pennsylvania, our harness racing program is being dealt a 'death blow' as Gov. 'One term' Tommy Corbett intends to rape the standardbred organization of two-thirds of its budget (at a time when Pa. is generating new slot revenues that our sire stakes did fine for a century and-a-half without it). So now, breeders, owners, drivers and stable hands will pretty much have to adjust their thinking that racing the circuit will just be a vehicle to advertise their breed with the hopes someone is in the grandstand that might be interested in purchasing their horses (as a hobby because it certainly won't be a profitable investment, most likely). Of course, with rising fuel cost, everything associated with racing will rise and at best, Corbett is barely allotting 'gas money' purses to keep the circuit(s) afloat. Pa. is no longer interested to taking the show to the people, it's now staged to make the once-a-year harness racing fair attendee to go where permanent courses are - and of course, where the slots are.
John Bowers More than 1 year ago
I am in total agreement. As Chairman of Maryland Horse Park, Inc. I said in many of my presentations that what the state gives the state can take away and they will most assuredly do in the future. In promoting a major horse park in Havre de Grace for almost four years I found that the very people (the horsemen) that would benefit the most in investing in the long term growth of the industry were the ones that resisted the project the most. The common theme I heard the most from horsemen was it sounds like a great idea as long as it does not come out of out pocket. The idea of investing in the long term growth of the industry was as foreign to them as is a high school education. Through their infighting and ignorance they virtually killed the project. They will soon learn that when one industry as to support another to keep it going the grim reaper lurks just around the corner. John Bowers Maryland Horse Park, Inc. Chairman
ed white More than 1 year ago
Very good assessment. To much money too early is usually a bad idea. To good to be true, why we bet against favorites. We should be concerned with raising interest in the sport. Lower take out = bigger paydays for $2 everyday player. Gather interest in racing partnerships. So many things we could do...
ed white More than 1 year ago
I don't understand why people are so quick to drop a $20 into a slot machine where you are programmed to lose. Just take 2 minutes to look at past performances and you have way better odds. Nobody even wants to do minimal work anymore. Also, just see a horse up close in the paddock, it's better that any button you can push on a slot machine.
jeff More than 1 year ago
Young people today don't want to wait 25 minutes for the next "action" and then see a Ness horse at 3-5 in a six horse race. I've been a horse player for 35 years and, quite frankly, I'm also losing interest in the sport. Less racing, bigger fields, and better payoffs are the answers. That conflicts with the "racinos" objectives.
Jack Twee More than 1 year ago
You have to spend $7 on a form first.Now you're down to $14.
Jack Twee More than 1 year ago
sorry,$13
Michael Tucci More than 1 year ago
In Pennsylvania, clueless Republican Governor Corbett has slashed (among many areas) funding for public schools. Soooo...too "re-fund" some of the previously slashed programs, the "guv-na" has looked at an area of "easy pickins", the horse racing industry. The casino/race track law, enacted in 2004 by a very bi-partisan group of legislators under former Governor Rendell (Democrat) is not something Corbett or other some other Pennsylvania politicians care much about. Therefore, "let the de-funding and raiding" begin !!
Riposte More than 1 year ago
I called Vegas, and asked them to give me a line on the possibility of these posts becoming readable after their writers would realize that BIG BLOCK DENSE PARAGRAPHS are unreadable (to wit, the above). Their response: 999-1. And that was a bargain.
Ian More than 1 year ago
This is risk when tracks prostitute themselves to the world of slots. There is no easy answer to the ails of racing, especially when there are so many diverse agendas and self interests not wanting to embrace change. Here in California the industry is dying a slow and painful death, inching toward the abyss. Foal numbers have halved in the last four years, Fields of four and five runners are commonplace at Santa Anita and Golden Gate,handles are down, owners are dropping away yet the CHRB and some horsemen still cling to the status quo resisting new innovations like Exchange Wagering. Dont treat the bettors (who are just as much the lifeblood of this game as anyone else, if not the lifeblood) as a never ending cash cow by raising take outs to 23%. Give us some consideration, please.