08/08/2001 11:00PM

Philly's civilized OTB's are envy of all the land

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PHILADELPHIA - Any out-of-town horseplayer who walks into the Center City Turf Club is likely to ask the same question: Why doesn't every city have something like this? People from Maryland surely will wonder why their state's racetracks haven't erected a similar offtrack betting facility in downtown Baltimore, Washington, or Bethesda.

Center City, one of five so-called "Turf Clubs" operated by Philadelphia Park, televises races from as many as 32 tracks a day, including ones in Australia and Hong Kong. It is nicely appointed, with mahogany paneling and attractive carpeting. It has a restaurant, a bar, and a deli. Patrons are admitted free and they can sit at tables or desks with individual TV monitors and tabletop betting terminals.

But the factors that make the Center City Turf Club most notable are location, location, location. It occupies three levels of a large downtown office building across the street from the Philadelphia Stock Exchange, and sits atop one of the city's busiest subway stations. This is what offtrack betting should do everywhere - bring the racing product to the customer in an attractive, convenient facility - but most states haven't allowed it. Pennsylvania did it right, though not without a struggle.

When the state passed legislation in the late 1980's to allow offtrack and telephone wagering, it already had an excellent model of how not to do it. New York City's no-frills OTB shops were so despicable that they poisoned the public image of Thoroughbred racing. The New York tracks didn't own them and couldn't control them. So Pennsylvania set up an antithetical system, allowing each track in the state to build and operate six OTB's. The legislation specified that these were supposed to be reasonably civilized facilities.

Greenwood Racing, the parent company of Philadelphia Park, was eager to exploit the potential of OTB. It recognized that simulcasting was the future of the sport. It never seemed to care much about live racing and was content to put on colorless, generic racing cards, with few stakes races or signature events.

Greenwood's view of horse racing has an important economic corollary. If the live product is not especially important, then the concept is antiquated that tracks and their horsemen are equal partners in the racing show.

"The economic structure with a 50-50 split is an economic model that no longer works in the current age," declared Bob Green, chairman of Greenwood Racing. If Greenwood was going to spend millions to build OTB's and operate them 365 days a year, it wasn't going to split the revenue evenly with horsemen who weren't putting up anything.

Its tough stance led to bitter battles between management and horsemen, who now settle for a 31.25 percent cut of racing's revenues. Horsemen in other states may choke at that figure, but Philly's horsemen now at least have a share in a thriving industry instead of an equal partnership in a moribund one.

A week ago on Friday, the Center City Turf Club took $148,000 in bets. The largest and poshest of the five Turf Clubs, in south Philadelphia, produced a handle of $361,000 the same day. Overall, the five establishments run by Philly Park bring in an average of $700,000 a day in wagers. It would seem that well-run OTB's in almost any busy urban area ought to generate big numbers. So why are they such a rarity?

In many states, of course, political opposition and anti-gambling sentiment has blocked offtrack betting. In Maryland, where the legislature generally has been supportive of its horse industry, offtrack betting has been legal for years. Yet its potential has barely been exploited. "We're dying to go into places like downtown Baltimore and Bethesda," said Joe De Francis, president of the Maryland Jockey Club. But racing-industry politics stand in the way.

Any OTB built by the tracks would be a joint venture between Thoroughbred and harness interests, with an 80-20 split of costs and revenues. However, Thoroughbred horsemen historically have been distrustful of their Standardbred counterparts and are reluctant to agree to the 80-20 split in perpetuity. They have the legal power to block the construction of any OTB within 35 miles of the track. Moreover, Maryland's horsemen are a strong political force and almost certainly would not accept as small a slice of the pie as their Pennsylvania counterparts did.

To build an OTB like Philadelphia Park's, De Francis said, "We'd need to go to the bank and borrow $5 million and show them a business plan." But it is unlikely that a business plan could be viable with horsemen getting half of the revenues, so it is unlikely that Marylanders will enjoy the pleasure of betting 32 tracks a day at a comfortable and convenient downtown location.

(c) 2001, The Washington Post

EDWARD More than 1 year ago
It is now 2015 and still no progress?