08/17/2010 3:47PM

Charles Town's riches could have been Maryland's


CHARLES TOWN, W.Va. – Charles Town Race Track has operated since 1933 and it introduced slot machines in 1997, but it had never experienced a gambling frenzy like the one that occurred last month.

Table games – including blackjack, craps, roulette, and poker – were made legal as of July 1, and it took some 24 hours to truck in the equipment, set up the tables, and get some dealers licensed. Charles Town’s casino was packed with customers playing its 5,000 slots, but shortly after midnight on July 2 almost everyone was impatiently eying the tables.

“When we finally opened 10 games at 12:45 a.m., there was a deluge,” general manager Al Britton said.

Casinos typically set the size of minimum bets according to demand, and the demand was so frantic that Charles Town established a minimum of $100 at the tables. There are few casinos on earth (not even Monte Carlo) where a customer must spend $100 to play a hand of blackjack, and the figure seems incredible for West Virginia. But it did not faze the patrons at the newly renamed Hollywood Casino at Charles Town Races.

“For the entire weekend,” Britton said, “people were standing four and five deep at every table, trying to get a chance to play.”

(Now that it has 85 gaming tables available for use, the casino can accommodate its customers more easily, but the minimum bet is still a substantial $25.)

Charles Town’s embrace of full-scale casino gambling is part of a trend. Like West Virginia, both Delaware and Pennsylvania first legalized slots at their racetracks – transforming them into “racinos” – and then added table games because slots alone weren’t sufficient to remain competitive in the betting marketplace. Every racetrack in the country covets such “alternative gaming” as a remedy for the sport’s ills. And every racetrack would like a renaissance as dramatic as Charles Town’s.

The track had long been a beloved institution and an important employer in Jefferson County. When it went out of business, voters approved slots to resuscitate it. The revenue from slots (and now from table games, too) enables the track to offer substantial purses and a respectable product that attracts interest from simulcast bettors around the country. The average card generates more than $800,000 in wagers.

Yet, Charles Town’s racing operation is not and never will be self-sustaining. Purse money is the foundation of the track’s success, and of the $36 million in purses it paid out last year, $6 million came from the track’s operations and $30 million from slots. The nation’s Thoroughbred industry understandly loves this type of arrangement, but the sport is not certain to receive such subsidies perpetually.

Charles Town is owned by Penn National Gaming, which began as a racetrack in Grantville, Pa., and Britton said, “Racing is a key part of who we are. We’re not going to kick it to the curb.”

But state governments are beginning to question these subsidies. Virtually all of the states that authorized casino-type gambling at racetracks are now faced with economic problems of their own. They are asking: Why are we using casino profits to support an otherwise unviable racetrack when we could be using that money for, say, public education? Pennysylvania has taken away $50 million from the subsidy that was supposed to go into purses over the next four years.

The racetracks that got slots and table games were, in many cases, ones like Charles Town, which could not exist without them. Most racing strongholds didn’t get such help. The perverse result has been that weak tracks were made strong, and competition from them made strong tracks weaker.

Nowhere has this phenomenon been starker than in Maryland.

Unable to compete with the slot-fueled purses in West Virginia, Delaware, and Pennsylvania, Maryland racing has hit rock bottom. Its breeding industry – once an exemplar for the nation – is struggling to survive. Even though slots have been legalized, belatedly, in the state, and may start generating money for purses in a year or so, any slot emporium will now be competing with Charles Town and other operations that offer a full range of gambling options. Whatever help comes will be too late; the sport will never recapture its lost popularity.

Anyone who cares about Maryland racing will feel a sharp pang of regret visiting Charles Town. Its facilities are worthy of the Las Vegas Strip, and it is packed with the very customers who would have packed a Maryland racino if it existed.

“We have access to an affluent market,” Britton said. “Eighty percent of our customers come from Baltimore, Washington, and Northern Virginia.”

If Maryland had legalized slots in the tracks in the 1990s, it could have made its racing and breeding industries among the strongest in the nation. But the opponents of gambling – led by a few politicians as well as the the editorial pages of The Washington Post and the Balitmore Sun – argued that slots would spoil the quality of life in Maryland, bringing an onslaught of crime, prostitution, and poverty. They declared, too, that slot machines would represent the first step on a slippery slope that would lead to full-fledged casino gambling. (Horrors! Why would a community want to attract visitors affluent enough to bet $100 per hand of blackjack?)

On a visit to Jefferson County, W.Va., you won’t hear too many arguments that gambling has ruined the community. In a region that was hard-hit by the recession, Charles Town employs 1,700 people – 500 of them recently added with the introduction of table games. The gambling operation has given a significant boost to businesses in the area as well as revenue to the local government. Regardless of the social and moral issues involved, Charles Town’s success proves this truth: People love to gamble. And Maryland’s experience proves this corollary: Tryjng to stop them is a costly exercise in futility.

© 2010 The Washington Post