10/08/2001 11:00PM

Slots slump puts future in flux


Prairie Meadows Racetrack and Casino in Altoona, Iowa, concluded its 2001 racing season Saturday, but several business issues that will impact the track's future remain unresolved

Prairie Meadows's handle declined this year, but perhaps of greater importance is that the casino's 1,500 slot machines fell short of revenue projections, due in part to a weakened economy and competition from two other local casinos, track officials said.

Also, Prairie Meadows, which is located in Polk County, faces a county-wide referendum next year to determine whether its slot machines, the profits from which primarily fund horse racing purses, will remain in operation.

Polk County owns Prairie Meadows and leases it to the Racing Association of Central Iowa, a nonprofit organization that runs the facility. Two of Polk County's five supervisors have recently expressed an interest in selling the facility rather than continuing the lease agreement. The Racing Association of Central Iowa held a board meeting Monday, at which they voted to research a possible purchase of the track from the county.

But any sale of the track will face several obstacles, including the slots referendum and an escalating state tax on slot machines for racetrack casinos. The rate is currently 30 percent and will rise 2 percentage points a year for the next three years. In 1998, Circus Circus offered to pay approximately $300 million for Prairie Meadows, but several recent estimates place its current value at about half that amount.

Purses and the quality of racing at Prairie Meadows have steadily risen for the past several years because of a five-year purse agreement, which concludes next year. Purses for next season are guaranteed at nearly $20 million.

The purses have been a source of contention between the Racing Association of Central Iowa and the county, which must agree on purse contracts. A new purse agreement must be negotiated for 2003 and beyond, and purse decreases and a shorter meet are possible results of those negotiations, according to a high-ranking track official.

Prairie Meadows ended its 44-day mixed meet Saturday night with total handle down 1 percent from the corresponding meet last year. Total average daily handle for the meet was $362,291, compared with $366,312 in 2000. Most of the decline in daily handle came ontrack, where handle dropped over 7 percent, from $64,090 last year to $59,433 this year. Offtrack wagering for the meet was about the same as last year.

The more high-profile 53-day Thoroughbred meet earlier this year suffered more than an 18 percent decline in total handle compared with last year.

On the track, Prairie Meadows's all-time leading trainer Dick Clark won a tight race for the crown, saddling 21 winners. Tim Gleason and Paul Pearson tied for second in the standings, one win back. Glenn Corbett easily defended his mixed-meet riding title.