10/07/2010 12:51PM

Indiana racing thriving at Kentucky's expense

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Linscott Photography
With the help of casino revenue, Hoosier Park has helped put Indiana horse racing on the map.

ANDERSON, Ind. – For nearly a century, racing in Indiana has been identified with one world-famous institution: the Indianapolis 500. But in recent years, a different kind of racing has crept into the sporting consciousness, partly at the expense of the horsey bluebloods to the south.

Indeed, Thoroughbred racing in Indiana is coming of age. Its prominence is traceable to a political sagacity that has allowed the state to reap hundreds of millions of dollars annually in casino revenues while simultaneously fostering the rise of horse racing. Once non-existent, horse racing in Indiana has become vibrant and relevant. Last Saturday, the winner of a Triple Crown event raced in the state for the first time when Preakness winner Lookin At Lucky captured the Indiana Derby at Hoosier Park, much to the delight of fans and racing officials.

Meanwhile, horse racing is suffering in Kentucky, which long has been regarded as the sport’s crucible and an exemplar of tradition. This weekend, while thousands of casual racegoers frolic in a pastoral setting at Keeneland Race Course in Lexington, Ky., any shift in power might not be apparent. But the fiscal might of onsite slots has permitted the two Indiana tracks, Hoosier Park and Indiana Downs, to fuel purses that are threatening Kentucky’s two smaller tracks, Turfway Park and Ellis Park, while chipping away at the two major ones, Keeneland and Churchill Downs. Horsemen from throughout the Midwest have been lured to Indiana with the promise of a better way to make a living.

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“Horses have to go where the money is,” said Kevin Greely, a Kentucky native and longtime racing official who became the racing secretary at Hoosier in January. “Trainers have to make money for their owners. It’s pretty simple.”

Parimutuel wagering in Indiana became legal in March 1989, and in October 1990, the northeastern Indianapolis suburb of Anderson became the first city to apply for a racetrack license. Churchill Downs and the Pegasus Group, which later reorganized as Centaur, were the first owners of what became Hoosier Park, where the first harness meet was held in 1994 and the first Thoroughbred race on Sept. 1, 1995.

The early days at Hoosier were marked by growing pains. Purses were small. Horses were slow. Crowds, such as they were, wagered tentatively.

But Hoosier was built to an efficient scale. With government-mandated casino subsidies helping to supplement its purses even before the track became a racino, the Hoosier operation included an indoor capacity of just a couple of thousand seats and a modest network of off-track betting parlors.

Indiana Downs, in the southeastern Indianapolis suburb of Shelbyville, opened in 2003. Built on a similarly modest scale by an Indianapolis corporation, Oliver Racing LLC, the new track also took advantage of the purse subsidies, which were funded by the state’s 11 non-racing casinos at a time when the issue of slots at tracks was being seriously considered by the state legislature. That concept came to fruition when racetrack gaming was passed in April 2007, and in a little over a year, both tracks had slots. In exchange, the subsidies were phased out in 2008, by which time about $290 million had been paid to the Thoroughbred, Standardbred, and Quarter Horse industries, according to the Indiana Horse Racing Commission.

Thoroughbred purses in Indiana in 2009 were an estimated $20.8 million over 125 dates, according to The Jockey Club, up from $3 million in 1995 and $11.2 million in 2003. In 2009, racino slot revenue allocations accounted for a whopping $16.2 million of those purses, or some 80 percent, according to the commission website.

“I was here the year [Hoosier] opened, and maidens ran for $12,000,” said Richard Kohnhorst, a longtime Kentucky trainer who began shifting his emphasis toward Indiana in 2003 and was the leading trainer at the 63-day meet at Indiana Downs earlier this year. “They’ve had that beautiful facelift in the clubhouse at Hoosier, and now maiden races are $35,000 and still on the way up. There’s a future here.”

Hoosier Park, now wholly owned by Centaur, is not picturesque. Its backdrop is plain and its infield lake would not remind anyone of, say, Gulfstream Park or Saratoga. The stable area is drab and paved, and unlike the grounds at Churchill or Keeneland, there are no spacious grasslands for grazing a horse. Light stanchions for night racing encircle the track and do nothing for aesthetics, at least in the light of day. With only a seven-furlong, bullring-type oval and no turf course, there are some unmistakable second-tier aspects to a racing facility best described as spartan but adequate.

But step inside the building, where slots money has afforded nearly every upgrade, and the place is impressive. It is shiny and spotless, high-tech and hip, with good food, friendly staff, and synergies between the casino and racetrack to encourage cross-over among customers.
At Indiana Downs, a lavish steakhouse tucked away in a quiet corner and a glitzy circular sports bar are main features of the casino area, which has more of a physical separation from the racing plant than Hoosier does.

Slots opponents within the racing industry argue that, at some point, racinos will wake up and realize that their racing operations are a drag and no longer worth being carried by the more profitable casino. But the law rules out such a scenario at Indiana tracks, according to Joe Gorajec, executive director of the Indiana Horse Racing Commission.

“Indiana is the only racino state that provides both statutory minimums and maximums for live race dates,” Gorajec said. “One reason Indiana racinos stand out is the commitment to the racing program. Horse racing is an integral part of the operation – not just a necessary sideshow.”

Jeff Smith has been a first-hand witness to the best of times in both Kentucky and Indiana. Smith was a young staffer under Churchill president Lynn Stone in 1983, when, as Smith recalled, future track president Tom Meeker “was still the house attorney.” Smith continued in various roles for Churchill, including helping to oversee the early development of Hoosier, until 2001, when he became full-time at Hoosier, where he is now the general manager of racing.

Smith saw Kentucky racing rejuvenated by the introduction of interstate simulcasting in the early 1990s, with surging purses making Keeneland and Churchill major powers on the national racing scene. Similarly, he has seen Indiana racing thrive with the help of slots. He believes the changing face of racing in this region to be primarily a function of politics.
“We still have a close business relationship with Churchill,” Smith said between greeting a steady flow of smiling faces on Indiana Derby Day. “They sell our simulcast signal and conduct business with us on a number of levels. They’re going through some very tough times.

Gaming has been a pretty big equalizer for us, obviously, and from a personal standpoint, it’s been extremely gratifying to see the growth we’ve undergone here at Hoosier Park.”

Last winter, Smith seized an opportunity to hire Greely, who grew up in Lexington as the son of retired Keeneland president Bill Greely and the nephew of owner-breeder J.J. Greely of Wintergreen Farm. Kevin Greely, 46, had been a racing official in his home state since his early 20s before going overseas to Dubai to work for 11 years in various capacities for the Emirates Racing Association. He returned to America to work for four seasons (2006-09) as racing secretary at Arlington Park in Illinois.

“We have a mandate to improve the quality of racing and the industry in this state,” Greely said, “and that’s what I’m here to help out with.”

That Smith and Greely – both well regarded in industry circles – have switched sides, so to speak, seems to say plenty about how Indiana has been able to attract a higher caliber of horses, trainers, jockeys, and racing officials.

Tom Amoss and his wife, Colleen, have made their primary residence in Louisville for 16 years, where they have raised their two daughters. Since his first year of training in 1987, horses sent out by Amoss, 48, have won more than 2,300 races and $60 million in purses, mostly while he traveled a circuit of Fair Grounds in his native New Orleans in the winter and Kentucky at other times of year.

In increasing measures, instead of racing at Kentucky tracks, Amoss has been running horses at Hoosier, where through Sunday he was the leading trainer with 21 wins from 55 starters at a meet that began July 30 and runs through Oct. 24. In 2009 and 2010, Amoss has had a combined 194 starters at Hoosier and Indiana Downs while in the nine previous years (2000-08), Amoss ran only eight starters in the state.

“It’s a very interesting time for trainers in Kentucky, particularly myself,” Amoss said. “My second daughter is a senior in high school in Louisville, and she’s the last child we have in the house. After she graduates in May, the ties that bind us to Louisville are going to be gone. I don’t say that with any great pleasure. Louisville has been a great place to raise a family, and I love the idea of racing at Keeneland and Churchill. But a wise businessman goes to the place where he can make the best living.”

Ben Huffman, racing secretary at Churchill and Keeneland, said he has no quantifiable evidence that Hoosier and Indiana Downs are luring horses and horsemen away “other than it’s become very obvious that many of our trainers are racing more and more up there,” he said. “We’re going to have to put our heads together in this state and try to slow this thing down.”

Amoss is not alone among trainers with deep local roots in Kentucky who have largely abandoned racing there during certain times of the year. They include David Banks, Buff Bradley, Bernie Flint, Greg Foley, Paul McGee, and Rob O’Connor.

“You just can’t make enough money in the winter at Turfway to justify sticking around,” said Bradley, who last winter took his stable to Gulfstream for the first time.

“There’s no doubt about it – Indiana Downs and Hoosier are very competitive with Kentucky right now, and it’s changing the landscape of racing in the Midwest,” Amoss said. “In August and September, it’s the best racing around here – better than Arlington, Ellis, and Turfway. It’s no secret anymore.”

In Kentucky, the state legislature has refused to approve alternative gaming at tracks, with Senate president David Williams, a Republican from the rural town of Burkesville, at the forefront of the opposition. Williams, the racing industry’s arch-villain, regularly invokes the moral issues involved in expanded gaming while insisting that the industry should be able to succeed on its own longstanding merits.

Wagering handle has fallen steadily and purses have been stagnant or cut at all Kentucky tracks in recent years while race dates have been reduced at all but Keeneland. Total purses in Kentucky dropped from an estimated $81.7 million in 2007 to $67.8 million in 2009, the lowest figure since 1994, according to The Jockey Club. The once-proud Kentucky Cup series was canceled this fall at Turfway. Churchill recently announced it is closing its 500-stall Trackside training facility for the winter because of the costs. In addition, earlier this week Churchill announced Churchill Downs Entertainment, its live-music unit, will be dissolved and that 64 jobs will be cut from its online gambling companies.

Sen. Williams and his proponents argue against slots for state racetracks, pointing out that Churchill has the almighty Kentucky Derby and has invested heavily in nonracing ventures. Keeneland, with its normally lucrative horse sales and boutique race meets with high purses, is a non-profit association and shielded somewhat from competitive forces.

But Ellis and Turfway are both “hanging by a thread,” said Marty Maline, the executive director of the Kentucky division of the Horsemen’s Benevolent and Protective Association. Maline echoes what the top brass at both tracks – Ron Geary, the owner of Ellis, and Bob Elliston, president of Turfway – have been saying for years. Geary has threatened on at least two occasions to permanently close Ellis, only to relent, albeit by running considerably fewer dates. The 2009 and 2010 Ellis meets were cut to 28 and 27 days, respectively, down from the 48 or so that had been customary. The nearly 60 percent decline in race days at Ellis from 2008 to 2009 compares with an average national decline of 2.6 percent from 2008 to 2009 and 7.4 percent so far this year from 2009

“Year after year, we in the industry all spend a tremendous amount of time and money trying to sell this legislature on what is needed, but it seems like we just hit one roadblock after another,” Maline said. “It’s frustrating beyond words.”

Rogers Beasley, director of racing at Keeneland, said the fall meet at Keeneland will not be affected to a great degree by racing at Hoosier but acknowledged declines in the racing and breeding industry in Kentucky. “It’s all pretty frightening,” he said.

In autumns past, Hall of Fame trainer Bob Baffert was a perennial key player in the Kentucky Cup series at Turfway when shipping star horses such as Silver Charm, Captain Steve, Point Given, and Vindication to the northern Kentucky track from his southern California base. Turfway officials gladly catered to Baffert and other such nationally recognized racing personalities, knowing the presence of their horses enhanced the stature and reputation of their event.

But last Saturday, while Turfway ran a steady diet of low-level claiming races one week after what would have been Kentucky Cup Day had it not been canceled, Baffert was front and center in the Homestretch Steakhouse dining room at Hoosier, where he not only won the $500,000 Indiana Derby with Lookin At Lucky, but also the $200,000 Indiana Oaks with Always a Princess.

Seated near the three partners who co-own his latest stable star, Lookin At Lucky, Baffert was on hand throughout the afternoon, making an in-house television appearance while chatting up well-wishers and passersby. The room was jammed with horsemen, local dignitaries, and horseplayers, including a charter bus of high rollers from the Twin Spires program who had traveled for the day from Louisville.

Mike Pegram is the most well known of the Lookin At Lucky owners, having previously raced horses such as Real Quiet, Silverbulletday, and Captain Steve under the same red and gold silks carried to victory by Lookin At Lucky. Pegram is a native of Princeton, Ind., in the southern part of the state, and thereby comes by his pride in Indiana naturally.

“This is a great day for Hoosier Park,” said Pegram, who professes an abiding love for Kentucky, having won the 1998 Kentucky Derby with Real Quiet. “It’s good to see them doing so well.”

Officials at Hoosier, where admission is free, estimated on-site attendance last Saturday at 12,000 to 13,000, which publicity director Tammy Knox said is a track record. But even with the big crowd, a 14-race card, and all the national interest in Lookin At Lucky, the all-sources handle was just $2,676,618, the second-largest in track history – but not even half of what Keeneland or Churchill might handle on a typical 10-race Saturday card.

Clearly, the racino business model has rendered moot the cyclical racetrack maxim that good horses beget large handle, which begets big purses, which draw good horses, and back around again. Hoosier and Indiana Downs still are not major draws in the national simulcast market, but the ripple effect of their slots-fueled purses – like all North American racinos – are being felt in enormous ways in neighboring areas.

“I always like coming to Kentucky,” Baffert said. “Everybody knows that. But you’ve got to follow the money, man.”