Study Says Racetracks Off-Base with Slots Assertions
Updated: Wednesday, November 12, 2003 2:36 PM
Posted: Wednesday, November 12, 2003 10:26 AM
A study to be released Wednesday out of Maryland says there is little evidence racetrack business would significantly decline if slot machines were housed at locations other than racetracks.
Citing business patterns in states such as Indiana and Illinois, where slots are legal, the study indicated pari-mutuel handle does not drastically suffer if slots parlors are opened. Jeffrey Hooke, an investment banker who conducted the study for a conservative tax policy group, told the Baltimore Sun
it is a "myth" horse racing can't survive if slots are introduced but aren't allowed at tracks.
"There may be some minor cannibalization," but no more than 10%, Hooke said.
He added this loss could be made up for by dedicating 3% to 5% of slots revenue to purses.
The study also counters the claims by Maryland racetracks that up to 50% of slots revenue is needed in order to be profitable for the tracks. Hooke cited the slots situation in New York, where tracks are moving ahead with slots parlors despite getting only 20% of revenue.
"This fact suggests that 20% of the win provides a satisfactory profit," the study says.
It also points out slots profits are rarely used to upgrade a track's racing program, using racinos in West Virginia and Delaware as examples. The ratio of dollars invested in slots as compared with horse racing is as much as 20-1 at some tracks, the study indicates.
Tim Capps, vice president of the Maryland Jockey Club, dismissed the studies assertions.
"Here's a guy who has absolutely no knowledge of horse racing other than from he research he has gleaned," Capps told the Sun
. "He seems to have some kind of anti-racing agenda."
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