Updated on 09/16/2011 8:27AM

In wake of slots, racing flourishes


WASHINGTON - When the West Virginia Breeders' Classic was run Saturday night at Charles Town, the track's old hands were watching with amazement. And people connected with racing in Maryland looked on with envy.

The eight races for products of West Virginia's modest breeding industry offered purse money totaling $850,000 - a formidable sum for any track, let alone one that is supposedly minor league. "It's hard to believe," marveled Charles Town's general manager Dickie Moore. "I can remember in the 1990's when we were giving away $21,000 a day."

If the Breeders' Classic epitomizes Charles Town's growth since the introduction of slot machines, it also highlights the contrast with slotless Maryland. Sam Huff, the football legend and racing aficionado, championed the creation of a big day for West Virginia horses, modeled after the Maryland Million. At its inception in 1987, the Breeders' Classic was a piddling imitation, with $200,000 in total purses. But while the Maryland event hasn't grown - its organizers struggle to maintain the purses at $1 million - West Virginia's gets richer and richer. The value of the minor-league event may one day surpass its counterpart in the major leagues.

That is the power of slot machine money. And that's the reason everybody connected with Maryland racing is preoccupied by the slots issue as well as the Nov. 5 gubernatorial election, which may determine whether the devices will be legalized in Maryland.

The magnitude of the slot business is a perpetual source of amazement. Charles Town got the machines in 1997 to bail out its failing racetrack operations. Since that time its parent company, Penn National Gaming, has been expanding the facilities - but it still doesn't have enough machines to satisfy the demand of its customers.

About 2,500 machines are now in operation, and during the week ending Oct. 5, Charles Town's customers dropped $54 million into them. These wagers produced revenue of $4.6 million for the week. Under the law, 14 percent of this total is earmarked for purse money at the racetrack - making Charles Town one of the most attractive places in the nation to race a Thoroughbred.

While the purses for the Breeders' Classic are eye-catching, it is the money in routine races that are the most significant aspect of Charles Town's operation. A field of $5,000 claimers raced Thursday for a purse of $14,700 - almost double the value of a comparable race at Laurel Park. The competition from Charles Town has destroyed whatever quality ever existed in the lower-level races in Maryland.

A hardheaded economist might question why revenue from slot machines should be used to subsidize a business that can't survive on its own. At Prairie Meadows in Iowa, the first racetrack to install slots, there has indeed been a backlash against handing so much money to horse owners. But there have been no such complaints in West Virginia; the voters authorized slots precisely because Charles Town is a beloved institution, which for decades had been a principal attraction and source of employment in the region. The public wanted it to be saved. Moreover, the track hasn't simply sucked money from slots; it has used the increased purses to create a viable racing operation.

In its new era of prosperity, Charles Town retains its essential character; it remains a five-eighths mile track, with many 4 1/2-furlong dashes and many races for cheap claimers. "We've tried to keep the small [owner] in the sport," said Moore. "With our purses, a guy can make a living in the racing business." Because it has made low-level races economically attractive, Charles Town is one of the few tracks that can boast a surfeit of Thoroughbreds; most of its races are full 10-horse fields. The betting public loves large, competitive fields - even if the horses happen to be cheapies.

As a result, Charles Town has established itself in the simulcast marketplace - a development that once would have been unimaginable. On an average night, it handles around $600,000 in wagers from out of state, and this figure is likely to rise. Dick Watson, president of the Charles Town division of the Horsemen's Benevolent and Protective Association, insisted: "We should do over $1 million a day." He noted that Mountaineer Park, West Virginia's other track, averages $1 million per day in simulcast wagering, and Charles Town's product is at least as good.

With the simulcast revenue supplementing modest ontrack betting (about $140,000 a day), Watson can boast, "We have become self-sufficient. Since April 2001, racing has been profitable and adds to the company's bottom line."

The bottom line will keep looking better, because Charles Town plans to install 1,000 more machines, and there seems to be plenty of unsatisfied demand for slots in the mid-Atlantic region. Watson noted, "The Baltimore-Washington-northern Virginia corridor is one of the most affluent areas in the country. They might as well come to West Virginia to spend their money."

Of course, the implications of this fact are not lost on politicians and racing leaders in other states. What could slots do for a racing industry like Maryland's, which has a solid foundation to build on, if they can bring Charles Town back from bankruptcy, increase simulcasting revenue from zero to $600,000, and make possible an $850,000 night of racing?

(c) 2002, The Washington Post