12/06/2012 1:26PM

Ohio racing industry in state of uncertainty


Ohio’s racing industry seems to have a lot of promise. Owners of the three Thoroughbred tracks have promised to spend half a billion dollars on new racing facilities and casinos. Horsemen have been guaranteed approximately 10 percent of the casinos’ net revenues for purses. Ohio breeders will share in the largesse with rich additions to the state’s breeding fund.

So how come it’s hard to find anyone smiling?

Despite bright lights on the horizon, Ohio horsemen remain troubled by the condition of the state’s racing industry, which has been in decline for decades. Even though the deep-pocketed owners of the tracks have made fancy promises about rebuilding the facilities next to grand casinos, horsemen and regulators alike have come to realize the racing operations at the new properties are going to be a low priority, creating unease about whether the industry will be able to use slot-machine subsidies to recapture a bit of the industry’s long-gone relevance.

Certainly, horsemen in Ohio feel better now than they did three years ago, when the state’s leaders had yet to authorize slot machines and it looked as if the Ohio Thoroughbred industry would finally perish. And they are eagerly anticipating the day when the casinos have opened and the money has started to roll in.

But getting there is proving to be rough.

“It’s not going to turn overnight,” said Chris McErlean, the vice president of racing at Penn National Gaming Inc., the casino company that owns Beulah Park. “The next 18 months, it’s going to be a struggle.”

Horsemen, tracks, and regulators have yet to sign off on a 2013 racing calendar, in large part because Pinnacle Entertainment, the owner of River Downs in Cincinnati, plans to demolish the track this spring before building a new $250  million casino-racetrack facility on the same picturesque property on a bend of the Ohio River. With River Downs out of the mix, horsemen are hoping to convince Beulah to race additional dates, but Beulah doesn’t even want to run the statutory minimum in 2013.

Uncertainty over dates is not the only unresolved issue. Penn is planning to “relocate” Beulah from Columbus to a site in Austintown, near Youngstown and the border with Pennsylvania, with a target of opening the new casino and track midway though 2014. That could mean splitting the track’s dates next year between two locations. Thistledown’s owner, a partnership called Rock Ohio Caesars, has made overtures of moving the track from its Cleveland location, even though the company announced that it was planning on $88 million of renovations at the track. Both relocations, which are being contemplated to exploit untapped casino markets, threaten to uproot horsemen.

The situation is not helped by what appears to be a lack of communication between the track owners and the racing industry. Although Dave Basler, the executive director of the Ohio Horsemen’s Benevolent and Protective Association, said the organization remains in discussions with the track owners over dates, it is clear that the priorities of horsemen do not align with the priorities of the casino owners.

The most obvious source of conflict is going to be racing dates, and not just for 2013. When the casinos begin providing subsidies to purses, perhaps as early as late 2013, horsemen are going to want tracks to offer more racing opportunities. McErlean, the Penn National official, said the smart move would be to go the opposite direction and cut racing days.

The same conflict is being played out on many circuits where gambling revenues subsidize purse operations. Track owners, mindful that most racing days do not generate enough revenue to cover their costs, are continually seeking to cut days. But horsemen, seeing big purses and a better chance of winning the awards in shorter fields, push back.

This year, Beulah applied for 88 days. The track is statutorily required to run 114 dates unless horsemen agree to a reduced schedule. McErlean and Basler said early in December that negotiations on the dates remained ongoing.

McErlean said Penn would probably push for 200 dates of racing between Thistledown and the old and the new Beulah next year. Thistledown has asked for 122 dates for 2013, a figure the horsemen support.

“Between Thistledown and the new Austintown track, you could run 52 weeks a year, four days a week, for 200 days of live racing, all within 60 miles of each other,” McErlean said. “Honestly, I think that’s too much live racing, but that’s a reasonable proposal, we think.”

Spokespersons for the companies that own River and Thistledown did not return phone calls.

Once owned by companies or families with strong connections to racing, all three Thoroughbred tracks in Ohio have been sold within the last three years to casino operators. Presciently, several of the owners bought the tracks before former Gov. Ted Strickland signed the order to authorize video-lottery terminals at the state’s seven racetracks.

Robert Schmitz, the chairman of the state’s racing commission, said it was naive to believe the new owners of Ohio racetracks would make their racing operations a priority, but he said he would push the operators to at least invest adequately in the racing facilities.

“My emphasis with the owners, particularly on the folks who are revamping racetracks, is to spend money on the racing side,” Schmitz said. “I want the racing side to look as good as the casino side, though we both know that’s not ever the case.”

In the meantime, Schmitz said he is busy trying to referee the disputes over racing dates. At the last commission meeting, in late November, Schmitz sent the two sides home to work out a deal, giving the tracks and horsemen until Dec. 13 to come to the commission with an agreement.

“It’s like trying to mediate a fight between a dog and a cat,” he said.

Basler said horsemen continue to look on the bright side.

“2013 is a transition year,” Basler said, “but 2014 and beyond, I’m very optimistic that the future is much brighter for Ohio Thoroughbred racing than at any time in the recent past.”