11/25/2003 12:00AM

Slots and settlements hang over new season

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NEW ORLEANS - Meet-opening press conferences are supposed to showcase fluff. Welcome. We hope to have a great meet. See you out at the track.

But at Fair Grounds late Tuesday morning, at a press luncheon, the track's president and general manager, Bryan Krantz, found it impossible to sidestep the issues dogging his racetrack. At Fair Grounds right now, one does not go long without hearing the words "slots," "lawsuit," and "settlement," and they came up again Tuesday.

The Louisiana State Legislature approved Fair Grounds for slot machines this year, and voters in Orleans Parish gave their approval to racetrack slots last month. A best-case scenario has Fair Grounds operating a 400-machine slot parlor before it begins its 2004-05 racing season.

"If the Fair Grounds is going to survive, we've got to get slot machines," Krantz said in an interview earlier this week.

But before Fair Grounds can close in on that goal, it most likely will have to get out of Chapter 11 bankruptcy, which the track declared in August to protect itself from the effects of a Louisiana Supreme Court decision last spring. The Supreme Court ruled in favor of the Louisiana Horsemen's Benevolent and Protective Association, which filed a lawsuit in 1994 claiming that Fair Grounds was inadequately disbursing profits from video poker machines into the track's purse structure. Using a formula employed in settlements between the state's other three Thoroughbred tracks and the HBPA, Fair Grounds could owe horsemen about $100 million.

No one expects Fair Grounds to come up with that kind of money, and discussions about a settlement between Fair Grounds and the HBPA are ongoing. Krantz calls a settlement a "linchpin" to a reversal of the track's fortunes.

"All I can say is that talks are ongoing," Krantz said. "Right now there's some educating going on as to what's financially feasible."

It's possible Fair Grounds could be approved for a slots license - one of the final pieces in the slots puzzle - without reaching a settlement, but Krantz called the bankruptcy "an impediment."

And Krantz stressed that Fair Grounds cannot continue to exist in its current form. According to Krantz, the Supreme Court's interpretation of video poker disbursements keeps Fair Grounds from realizing a profit on the machines, and revenues from horse racing alone won't keep the business afloat.

It was not just the lawsuit that brought Fair Grounds to this impasse. Business here crested in the late 1990's, and purses were cut during each of last two meets as field size and handle shrank. Slots came on line at Delta Downs early in 2002, and increased purses there have lured Louisiana horsemen away from New Orleans. Meanwhile, Kentucky-based outfits that winter at Fair Grounds can run in an open maiden right now for a purse of $43,900 at Churchill. Here, the purse is $28,000.

Fair Grounds hopes to tread water this year. "I think that this season is going to look a lot like last season," Krantz said.

If it looks worse, the track could be in trouble.

"If the Fair Grounds were to cut purses again this year, I think the major stables that have the ability to go somewhere else will," said Tom Amoss, among the leading trainers here each season.

In fact, the face of Fair Grounds could change radically by next season. Krantz insists the track isn't for sale, but he said Fair Grounds would consider forming "partnerships for developing the slots facility."

Krantz declined to name prospective partners. "Let's just say it's everybody," he said. "There are players within and outside the racing industry."

Thursday's opening-day program did fill well, with a nice mix of statebred and open horses. If Fair Grounds can weather this storm, the assets that allowed it to climb from a lower-tier facility to a major winter destination still are in place.

"There's some light at the end of the tunnel," Krantz said.

How to reach it is the problem.