09/17/2014 12:43PM

Fair Grounds reacts to lawsuit by slashing purses

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Projected purse payments at the Fair Grounds 2014-15 Thoroughbred meeting will be reduced, at least temporarily, by about $2.7 million because of a lawsuit filed by a group of Quarter Horse owners, trainers, and jockeys, Fair Grounds announced Wednesday.

The lawsuit contends that Quarter Horse interests are owed supplementary purse payments derived from betting at Fair Grounds-owned video-poker parlors.

Fair Grounds historically has been almost exclusively a Thoroughbred track, but when it was granted a license to operate a slots parlor, Fair Grounds was required to pay a percentage of slots revenue to Quarter Horse purses, which led to the creation of a Quarter Horse meet in 2008. The lawsuit contends that the legislation enabling Quarter Horse purses to receive slots revenue should automatically have started dedicating video-poker revenue to Quarter Horse purses as well.

Fair Grounds believes otherwise, and some local observers familiar with the suit suggest that the Quarter Horse interests have only a minute chance of winning, but Fair Grounds still has decided to withhold purse money from the upcoming Thoroughbred meet in the event the lawsuit proves successful.

Should the suit be resolved before or during the race meet, the funds – now set in escrow – would be returned to the purse structure for the 2014-15 meet.

Thoroughbred purses in Louisiana are determined through a mathematical formula including slots revenue, video-poker revenue, and takeout from pari-mutuel handle. The track, in a news release, said it was tilting the impact of the purse cut to stakes races while attempting to lessen the burden on overnight purses. The release said overnight purses would be cut about 17 percent, from a daily average of $223,000 to $186,000.

Stakes purses will take a 30 percent hit, cut from an intended total of $6.7 million to $4.7 million. The Louisiana Derby, run as a $1 million race since 2011, will offer a purse of $600,000 in 2015. The purse for the Fair Grounds Oaks will be cut from $400,000 to $300,000. The Mervin Muniz, not long ago a $500,000 race, will be worth just $200,000 in 2015, while the New Orleans Handicap and Risen Star had their purses cut from $400,000 to $300,000. Several of those stakes races took purse cuts last season when Fair Grounds, owing to poor early-meet handle, reduced stakes purses by $785,000 during its meet.

Additionally, Fair Grounds said Wednesday that 15 stakes of lesser importance were cut entirely from the 2014-15 meet schedule.

The purse reduction is the latest thump in a steady drumbeat of trouble at the historic New Orleans track. Churchill Downs Inc., which bought Fair Grounds out of bankruptcy in 2004, has come under fire for failing to reinvest profits from the casino-gambling side of the business back into horse racing, and the Louisiana legislature earlier this year raised the possibility of withholding CDI’s license to operate Fair Grounds without a fundamental change in approach. Moreover, a report surfaced late last week that CDI was seeking to sell off Fair Grounds, with a reported deadline of Wednesday for purchase proposals.

The 2014-15 meet begins Nov. 21.