Florida bill allowing tracks to drop racing advances

A Florida Senate committee advanced two gambling bills on Wednesday that would permit most of the state’s parimutuel facilities to drop their live racing operations but would also create a purse pool for Thoroughbred racing subsidies estimated at $40 million a year.

The gambling bills are designed to grant legislative approval to a compact negotiated late last year between Florida Gov. Rick Scott and the Seminole Indian tribe. The compact has triggered a massive lobbying effort by parimutuel operators on a variety of issues, but the most controversial, from the standpoint of Thoroughbred horsemen, has been an effort by some parimutuel operators to be allowed to drop their money-losing racing businesses while still retaining their licenses to operate casino-type games.

The bills advanced by the Senate Florida Regulated Industries Committee would permit greyhound tracks, harness tracks, Hialeah Park, and Gulfstream West (formerly Calder Race Course) to decouple their racing licenses from their casino licenses, potentially leading to mass closures of parimutuel facilities if the legislation is signed into law. But they would not allow either Gulfstream Park or Tampa Bay Downs to decouple, and they also require the Seminole tribe and the parimutuel operators who have shuttered their racing operations to provide an estimated $20 million each annually in subsidies to Gulfstream’s and Tampa’s purses from their casino operations.

Combined, Tampa and Gulfstream run approximately 300 live racing dates a year when including race dates at Gulfstream Park West, the name given to a two-month meet at Calder that is operated under a lease by the owner of Gulfstream. At that number, the $40 million annual subsidy will provide for approximately $130,000 in additional purse money and breeders’ awards for every day of live racing.

“I think we’ve bent over backwards to accommodate [Thoroughbred] interests,” said Sen. Joe Negron, a member of the committee.

Two Thoroughbred industry representatives, Tom Ventura of the Ocala Breeders Sales Company and Lonny Powell of the Florida Thoroughbred Breeders and Owners Association, spoke during the hearing on the legislation, and both thanked the committee members for acknowledging the Thoroughbred industry’s concerns about the impact of the bills.

“Your purse pool is certainly appreciated as a platform we can build upon,” Powell, the chief executive of the FTBOA, said.

The bills would also lower the tax rate on slot machines at parimutuel facilities from 35 percent to 25 percent. A portion of the savings would be directed into the purse pool. Gulfstream Park, which is owned by The Stronach Group, currently takes bets on 800 machines.

The owner of Calder, Churchill Downs Inc., would be allowed to continue to own and operate a casino at the track, but it would be allowed to decouple the parimutuel permit that is currently being leased to The Stronach Group under a six-year deal signed in 2014. Calder’s long-term future as a racetrack is unclear; Churchill has said in its financial statements that it plans to tear down the grandstand and redevelop the portions of the property used for racing operations, such as the racing surfaces and barn area.

While the Thoroughbred industry received lucrative carve-outs and protections, other parimutuel constituencies did not fare well. Jack Cory, president of the Florida Greyhound Association, said that most of the state’s 39 greyhound tracks would close if the bills pass, and, because the bills allow for parimutuel licensees to also operate slot machines, the legislation would lead to 39 new casinos in the state.

Negron countered that the bills do not require greyhound tracks to give up their parimutuel licenses, and that the legislation would only give those companies the option to cease live racing.

“Nothing [in these bills] stops greyhound racing from continuing,” Negron said.

The bills were the result of months of negotiations between legislators and various gambling constituencies, and their main provisions are expected to be endorsed in the Senate and House. A House committee advanced similar legislation last week.