04/18/2013 11:04AM

Penn National statement puts Beulah Park relocation in doubt


Penn National Gaming Inc., the owner of 22 casinos and nine racetracks across the United States, said Thursday in a release accompanying financial statements that it will not go ahead with plans to relocate Beulah Park, which is in Columbus, Ohio, if the state’s racing commission holds the company to a demand to increase the size of the track’s grandstand.

The release stated that the company is in “active dialog” with the state racing commission over the commission’s demand that Penn National add 650 grandstand seats to its plans for a facility in Mahoning Valley, near the border with Pennsylvania, that would use Beulah’s racing license for a new casino and racetrack. But the company also said that that its blueprints for the new track “reflect current market demand” and that it does not intend to go forward with the relocation of Beulah and a harness track in the state facing similar demands unless the commission backs down.

“We remain committed to achieving reasonable returns on invested capital on these projects and do not currently expect to proceed if the Ohio State Racing Commission requires extraneous expenditures on portions of the facility that detract from this objective,” the release stated.

The statement by Penn National Gaming is the latest indication that horse racing is taking a back seat in Ohio to the casino plans of racetrack owners that are designed to capitalize on the state’s authorization of slot machines in 2011 at Ohio’s seven racetracks.

Little more than a blip on the national racing radar, Ohio’s racing industry has been moribund for years, but the 2011 legalization of slots at the state’s racetracks generated hopes among horsemen that they would soon be competing for outsized purses subsidized by slot-machine revenue. However, only two racetracks – Scioto Downs in Columbus, a harness track, and Thistledown outside Cleveland – have opened casinos, as many of the rest of the tracks contemplate relocations to areas in the state that would best serve casino patrons.

The racing commission has taken issue with some of these plans, including Penn National’s, with demands that the tracks add seating for horse racing patrons in the grandstands affixed to the planned casinos. On Tuesday, the owners of the harness track Lebanon Raceway, which includes Churchill Downs Inc., agreed to increase the racetrack seating in the blueprints for its relocated racino, but Penn National has resisted the commission’s calls.

No racetrack in Ohio currently has an agreement with either Standardbred or Thoroughbred horsemen on subsidies from the slot machines. State law requires that the track owners distribute a minimum of 9 percent of slot-machine revenue to horsemen.