Management at Colonial Downs has reportedly told shareholders it will consider closing its four off-track betting centers in Virginia and rely upon other revenue sources, such as management of video lotteries at truck stops in the state of Louisiana, to help supplement purses at the track.
According to the Richmond Times-Dispatch, the possibility of closing the OTB parlors came up during Colonial’s annual meeting Wednesday. Also during the meeting yesterday, shareholders of the New Kent, Va. track voted to drop the "Downs" from the company name to reflect its expanding interests beyond pari-mutuel wagering.
"For the first time, given the political climate of the state, I'm recognizing that probably the best way to grow quality, live horse racing at the racetrack probably involves some formula that includes closing down the OTB parlors," Jeffrey P. Jacobs, the company's chairman and chief executive officer, told the Times-Dispatch after the meeting. "This is a very highly regulated industry, and when you combine that with a tough political climate for gaming, we have to go outside of that little box that this company is in to grow cash flow."
The newspaper reported that Jacobs said closing the OTB parlors, coupled with turning in the track's off-track betting license, would allow the track to end its relationship with the Virginia Racing Commission, a position disputed by commission chairwoman Robin Traywick Williams.
"It doesn't matter where you conduct it," Williams said. "If you have pari-mutuel wagering in any form, then you come under the regulation of the Virginia Racing Commission."
Colonial’s publicly-traded stock hit a 52-week low Wednesday, closing at 65.6 cents, down 15.6 cents.