01/15/2004 12:00AM

Hub money keeps growing


PORTLAND, Ore. - The amount of money wagered through the interstate account-wagering hubs - services such as Television Games Network or Youbet - based in Oregon has grown exponentially over the past four years, and it is starting to make a difference to the state's racing.

When two hubs (TVG and the Greyhound Channel) began operating in the state in 2000, they combined to handle less than $20 million. With five hubs based in Oregon in 2003 (TVG, Youbet, The Racing Channel, AmericaTab, and Greyhound), the combined handle grew to more than $600 million through the first three quarters of the year. Figures for the final quarter of 2003 are not yet available.

With some exceptions, the state gets one-quarter of 1 percent of that handle, and horse racing's share has grown to over $1 million per year. The Oregon Racing Commission, which distributes those funds, has used them primarily to rescue the state's five remaining fair meetings, which seemed a few years ago to be on the verge of succumbing to a host of problems, including a shortage of horses and riders, dilapidated facilities, and substantial operating losses.

The health of the fair meetings remains the commission's primary concern, which was clear at the panel's meeting on Wednesday. The commission distributed $1,156,122 in hub funds, most of it to the fairs. The commission boosted its subsidy to 2004 fair purses to $2,000 per race for 269 races, for a total of $538,000. It increased the jockey incentive fund, which provides performance-based bonuses to jockeys riding at the fairs, by $10,000 to $35,000. And it allocated $67,043 to improve video and photo-finish services at the fairs.

All those were what the commission calls Tier 1 allocations, meaning they do not have to be matched by the recipients. Most of the Tier 2 allocations, which do have to be matched by the recipients, went to the fairs as well for improvements to their racing surfaces and facilities. Grants Pass and its racing association received $61,968, Union got $46,878, Prineville got $33,925, Tillamook got $76,741, and Burns got $71,283.

Other Tier 2 allocations went to horse and dog groups to improve the quality of racing. The Horsemen's Benevolent and Protective Association got $40,000, the Oregon Thoroughbred Breeders Association got $120,000, and the Oregon Quarter Horse Association got $43,500. The Oregon Greyhound Association was allocated $18,000, and the Oregon Greyhound Breeders' Association got $8,550.

In addition, the horsemen's association received a guarantee that up to $183,000 in hub funds will be available to balance the purse account at the current Portland Meadows meeting, should the purse account be in the red at the end of the 80-day meeting in April. Purses had been overpaid by $183,000 as of Jan. 1. Though the purse account typically gains money after the first of the year, it is expected the remain firmly in the red.

The purse account deficit exists despite the track's remarkable success in selling its signal this season, which has caused the average daily handle on live racing to more than double. The reason is that the track sells its signal for between 2 and 3 percent of what the remote locations handle on its races, and only half that goes to purses. The purse account receives a far larger percentage of dollars bet in-state, and that continues to decline.

Dick Cartney, executive secretary of the horsemen's group, reported that in-state wagering on live and simulcast racing offered by Portland Meadows fell from $47 million during the 1997-98 season to $37 million at the 2002-03 stand.

"It is a struggle to keep purses up," Cartney said. "We renegotiated our contract with the track three years ago and got a higher percentage of the handle for purses, so that helped."

Cartney noted that two years ago the Portland meeting was cut short by an Environmental Protective Agency ruling, "so we had an extended period when we were accumulating purse money from simulcasting without paying any purses out. We built up a cushion, but that cushion is gone, and now the purse account is in the hole. That was why we asked for the hub money. We hope it is just a one-time thing, but who knows?"

Though money from the interstate account-wagering hubs based in Oregon is clearly a boon to the state's racing, it is also true that the hubs have contributed to the decline in in-state handle by luring away bets that used to be placed at the track and its offtrack betting outlets. To the extent that has happened, which is unknown, contributions of hub money to the Portland Meadows purse account can be seen not as charity, but as compensation.