01/10/2003 12:00AM

Staying ahead of the gambling curve

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Racinos, the hybrid of racetracks and slot machines, are a hot topic in both the horse racing and gaming industries.

When Prairie Meadows and Delaware Park added slot machines, the results were immediate - higher purses and more money for state government. The act itself may have been born out of desperation, but many point to racinos as the savior of the sport.

Three Las Vegas gaming impresarios are intrigued by racinos, but with a caveat.

"If these states are going to bank on racinos, they're going to have to transform what racinos are," said Steve Wynn recently in a story in the Las Vegas Review-Journal. "I think the people who play slots and want to have an evening at a casino are different from the people who play the races."

Wynn helped reinvent Las Vegas when he built the Mirage, Bellagio, and Treasure Island properties. So, Wynn knows what he speaks of in re-energizing a tired gaming model. Wynn currently is developing two multi-billion-dollar mega-resorts, Le Reve on the Las Vegas Strip and an unnamed property in Macau.

Wynn's name came up with racinos due to his Eastern travels promoting the IPO of his casino company, Wynn Resorts. He was mentioned in regard to possible racinos in Maryland and Pennsylvania. Wynn and Pennsylvania Gov. Ed Rendell both graduated from Penn and are long-time friends.

However, Wynn's caveat is: "If all they're offering is to throw some slot machines into a clubhouse, then I'm not interested."

Wynn and Terry Lanni, chairman of MGM Mirage, are on the same page. Lanni has helped grow MGM Mirage into 66th-place in Fortune magazine's fastest growing companies list.

Lanni is already on record at last fall's National Thoroughbred Racing Association Marketing Summit, saying, "I think the business model has to be changed for the racing industry if it wants to ever grow."

"I honestly believe that slot machines at racetracks are a short-term benefit. Once politicians allow the expansion of slots at racetracks, it's pretty easy to allow them to expand everywhere."

Lanni explained how the casino industry became broad-based, and that entertainment, food and beverage, rooms, high-end retail, and conventions all became profit centers. It took the pressure off gaming, which remains a racetrack's main source of income.

"It needs to be a broad-based form of entertainment," Lanni said. "Racing really needs to approach it that way."

Meanwhile Frank Fahrenkopf, president of the American Gaming Association, a gaming industry lobbying group, said racetracks may not be thinking in terms of offering more than rows of slots.

"There's really no demand for the resort model," he said.

Whether the racing industry adjusts its racino model depends on what happens in the coming months when states such as Kentucky, Maryland, Massachusetts, New Jersey, Ohio, and Pennsylvania seek racinos.

The landscape has changed with Tribal gaming gaining deep inroads, budget-challenged governments seeking a bigger percentage of the profits, and anti-gambling forces fighting the expansion of gaming on all fronts.

In the near future, it might require a trend-setting racino model as Lanni and Wynn project to rise above the current bickering.

- Richard Eng is the turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap Up Show.