The Forgotten Player
Updated: Tuesday, January 14, 2003 9:38 AM
Posted: Thursday, January 2, 2003 12:35 PM
Legislators in a number of financially challenged states across the country soon will be discussing budget shortfalls and possible solutions. With new or increased taxes anathema to most politicians, expanded gambling is becoming the number one choice to stem the tide of red ink.
In many of those states, video lottery terminals (a nice way of saying slot machines) at racetracks have been floated as the best way to expand gambling without turning Anytown, U.S.A., into Atlantic City. That argument makes a lot of sense, since racetracks already are licensed and regulated gambling establishments built on sizable parcels of real estate in or near major cities. The addition of slot machines to those venues will not change the landscape appreciably.
An even more important reason to make the racing industry a participant in a state's expansion of gambling is the agricultural business of breeding, raising, and training Thoroughbreds, an activity that takes place in nearly every state with a racetrack.
Purses, the economic engine that fuels demand for Thoroughbreds and keeps horse farmers in business, have grown over the past decade as tracks gained access to a larger market through interstate simulcasting and, more recently, account wagering. But that growth stage is over.
A number of states, notably West Virginia, New Mexico, Delaware, Iowa, and Louisiana, have married racing to slot machines or casino gambling to the benefit of the horse owner through higher purses and to the state via increased revenue. Some New York tracks, including Aqueduct, have the legal right to install slot machines, but the enabling legislation was so flawed that it currently makes no economic sense for them to do so.
Other legislatures, including those in Florida, Kentucky, Maryland, Pennsylvania, and Texas, are looking at the possibility of putting slot machines at tracks, and the Thoroughbred Owners of California has made the issue a priority.
The involvement of the TOC in California and breeder and owner organizations in other states is extremely important as the legislative process unfolds. In too many states, track officials and their lobbyists have been the central players, and in some cases it has backfired.
In Maryland, for example, the recent sale of Pimlico and Laurel Park from principal owners Joe and Karin De Francis to Magna Entertainment has not smoothed over some of the feathers Joe De Francis ruffled in the state capital. Instead of focusing on what slot machines can do for the state's horse farmers, some legislators are chagrined over how many millions of dollars the De Francises stand to gain if slots are approved.
The last time slot machines were discussed in Kentucky's capital of Frankfort, there was precious little talk about the importance of the state's leading agribusiness--Thoroughbred horse farms--and more about the arrogance of Churchill Downs officials for sending campaign contributions to politicians on the eve of a legislative session.
Momentum for slot machines has picked up steam in Texas, although the influential Dallas Morning News in a Dec. 29 editorial called the proposal a "bad bet" for the state. The newspaper said advocates of the gaming devices saw them as "economic catalysts for struggling racetracks" (of which there are three in Texas for Thoroughbred racing) but made no mention of the thousands of Texas owners and breeders who must be looking with envy to tracks in neighboring Louisiana and New Mexico, where slots have allowed the racing industry to compete with Indian casinos or riverboats. The editorial also failed to mention the tens of thousands of people in Texas whose agriculture-based livelihoods depend on the racing and breeding industry.
This is no time for horse owners and breeders to sit back and let someone else tell their story. If they do, chances are their story will never be heard.
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