Updated on 10/06/2014 2:02PM

Colonial Downs owner threatens to close


Colonial Downs in New Kent, Va., and its offtrack betting parlors will cease operations Nov. 1 if the state racing commission does not approve a contract with a new horsemen’s group set up by the track, the owner of Colonial said this weekend.

The threat by Jeffrey Jacobs to close Colonial and its seven OTBs comes three months after the track’s summer meet was called off because of a dispute between track management and the Virginia Horsemen’s Benevolent and Protective Association, which has represented horsemen since Colonial opened in 1997. The dispute involves a host of issues surrounding racing at the track, including the number of live race dates and whether stabling will be made available during the live meet.

According to officials, Colonial has already signed a 10-year live-racing contract with the new horsemen’s group, the Old Dominion Thoroughbred Horsemen’s Association, which the track said was “currently being formed.” Officials with the Virginia HBPA called the group a house organ and said the group could not legally represent horsemen in the state because it has no members.

“It’s a total sham, and in my view, [the contract] shouldn’t even be considered by the racing commission,” said Frank Petramalo Jr., the executive director of the Virginia HBPA.

The racing commission is scheduled to meet on Oct. 15 to consider the contract with Old Dominion, according to Bernie Hettel, the executive director of the commission. Hettel said little is known about the new group, but its president, Tim Valente, and another official of the group, Mark Deen, have been seeking out individual meetings with commission members to “discuss the group’s members and its prospects,” Hettel said.

“Obviously it’s a new group, and we’ll see how things play out in the next several days,” Hettel said. Members of the commission will be asked on Oct. 15 to vote up or down on the group’s contract with Colonial, Hettel said.

Under the Interstate Horseracing Act, a federal law, racetracks must have a contract with a horsemen’s group that represents “a majority” of owners and trainers who run in the state. Without the agreement, a track cannot accept bets or send its simulcast signal out of state.

Petramalo said the Virginia HBPA represents 1,300 licensed owners and trainers in Virginia.

Colonial said in the statement that the track is seeking to run “three days of national-caliber, high-end racing, with an additional 17 days of summer racing” under the 10-year contract with Old Dominion. The statement said that employees of Colonial have already been notified that they will be laid off Nov. 1 if the commission does not approve the contract with the new horsemen’s group.

Petramalo said that Colonial and the Virginia HBPA had been engaged in active negotiations for most of the past two months on a live-racing agreement for the 2015 meet, but those talks ended abruptly several weeks ago. Under those talks, Colonial pressed for 19 days of live racing on a Saturday-and-Sunday schedule from June to July, with three additional dates over the Labor Day weekend, while the Virginia HBPA pressed for 24 days of live racing on a Friday-through-Sunday schedule, Petramalo said.

Petramalo said both sides appeared to be willing to compromise on the dates, but that the negotiations fell apart when the talks turned to stabling. Colonial was seeking to keep its stable area closed during the meet, but horsemen objected. Horsemen then offered to pay Colonial $50,000 a week out of its purse account to subsidize the costs of keeping the area open, but Colonial insisted that the horsemen pay more, Petramalo said.

The dispute in Virginia underlines the fragile condition of live racing in the state at a time when tracks across the United States are struggling. Jacobs has said that Colonial has been losing money for years, and he has repeatedly threatened to close or sell the track if business does not improve. Repeated attempts to lobby the legislature for the ability to operate slot machines have failed over the past decade.

In February, Colonial stopped importing Thoroughbred simulcasts to its seven OTBs, due to a state law that prohibits simulcasting without a current live-racing agreement with horsemen. The summer race meet was canceled despite repeated attempts by the state racing commission to force the two sides to come to an agreement, including the use of a mediator.

Petramalo said he has called a meeting for Wednesday of the Virginia HBPA’s membership. He said the horsemen will be urged to attend the Oct. 15 meeting of the commission in order to demonstrate that the new group does not represent horsemen’s interests.