Ohio Horsemen Force Issue on Account Wagering
Updated: Saturday, December 20, 2003 2:59 PM
Posted: Friday, December 19, 2003 8:48 AM
A two-month shutdown of Beulah Park was averted Dec. 18 when the Ohio Horsemen's Benevolent and Protective Association and track management agreed to at least negotiate revenue splits from account wagering. If no deal is in place by Feb. 10, horsemen will withdraw permission for Ohio's live racing product to be sent to account-betting providers.
The move by Ohio horsemen is expected to have ripple effects as the racing industry nationwide struggles to get a handle on signal pricing and piracy, among other issues. The deal was hammered out in the hallway during a marathon Ohio State Racing Commission meeting that laid bare the issues that plague the racing industry in Ohio and beyond: a glut of live racing, declining handle and revenue, cuts in breed development, convoluted racing laws, and animosity between the breeds.
Beulah Park in November had said it would request to open Jan. 10, 2004, but on Dec. 18, track general manager Mike Weiss asked for a late-February opening date. The revision was in line with a call from the racing commission for all tracks to reduce live racing dates within reason, but horsemen claimed the track wasn't operating in good faith.
In a memo, Beulah Park told horsemen the barn area would be shut down by the end of December. The track is said to have collected all the condition books for January and made an abrupt announcement about the barn-area closure over the public address system.
Weiss, when asked about the plan to open in late February rather than early January, said horsemen weren't threatened with eviction. He said he spoke with some who didn't even understand the Ohio HBPA situation.
A few horsemen, meanwhile, said anytime small owners and trainers are unexpectedly asked to leave a barn area for two months in the winter with no alternative, it's a threat.
The Ohio HBPA--even the racing commission--wants more information as to how much money is handled through account wagering and where the revenue goes. The situation is bit complicated because America TAB, which operates through a hub in Oregon, is owned by Beulah Park and River Downs, two of Ohio's three Thoroughbred tracks. In addition, Ohio has no account-wagering law on the books.
The Ohio HBPA would like all of Ohio to get source-market fees rather than only locations within 25 miles of a racetrack. Specific figures weren't discussed at the commission meeting--it remains to be seen how detailed the handle information will be--but clearly Ohio horsemen believe not enough revenue is going to purses from account wagering.
"We're asking to look at a fair share," Ohio HBPA president Gus George said. "We're looking at ways the purse fund can get a little more money."
"We simply don't have the information," said Ohio HBPA executive director Dan Theno, who advocated use of the California Horse Racing Information Management System, known as CHRIMS, to track handle and revenue. "We're dealing in the blind right now."
Norm Barron, a member of the racing commission, said he has been asking for similar information for years and hasn't gotten it. "We don't know where signals are going," Barron said. "We don't know who's paying what. We don't know what the split is."
Weiss indicated the situation is dicey because Beulah Park and other Ohio tracks "have to beg" for out-of-state outlets to take their signals. He said if horsemen pull the plug, Ohio racing would suffer greatly.
"(Account-wagering companies) don't need Beulah Park," Weiss said. "Beulah Park needs them. The horsemen are cutting off their nose to spite their face. If our export starts getting cut ... that's what has kept us alive. If we lose the export, we'd go to the minimum number of days and run for $2,000 purses."
Beulah Park was awarded 143 live racing days for 2004. The racing commission debated whether the track could come back and request a reduction in dates should horsemen withdraw approval for export of the signal, which they can do under the Interstate Horseracing Act. Apparently the track can make such a request, but some commissioners indicated it wouldn't be looked upon favorably.
Three Standardbred tracks in Ohio requested fewer racing dates for 2004, while Northfield Park requested and was awarded 220 days, the same as this year. The harness track near Cleveland has come under fire from other track operators because the more days it races, the more it gets from a common purse pool for dark-day simulcast revenue. (The more live racing, the more revenue tracks keep at home.)
Northfield general manager Tom Aldrich again defended the track's business model and said it shouldn't be punished for providing live racing opportunities. He also said Northfield, now the top exporter in Ohio in terms of handle on its live races, has raced more than 200 days a year since the early 1990s, and pays its share into the purse pool by offering an aggressive simulcast program that at times lasts until 2 a.m.
"We're not going to apologize," Aldrich said. "We don't stand up and criticize tracks for mistakes they make in their market area."
River Downs, which has lost almost $10 million in revenue generated since 1996 to the common purse pool, in particular has targeted Northfield. Thoroughbred and Standardbred tracks and horsemen agreed on the common-pool statute as part of full-card simulcasting legislation that passed in 1996, and the only way it can be changed is through new legislation or an agreement by all industry parties.
There were faint hints Dec. 18 the seven tracks and two horsemen's groups might be amenable to some sort of deal. Perhaps no one drove home the point of how complex the situation is more than commissioner Scott Borgemenke, who abstained from the vote on Northfield's racing dates because he didn't understand all the ramifications.
"I understand the motions, but I don't think I'm the only person in the room who doesn't understand why it's being done," Borgemenke said. "There are always references to past deals made with people who aren't even in this state anymore. If I ran my business based on things I did even three years ago, I'd be out of business.
"You all need to get your acts together. I'm going to do everything I can to balance these inequities. That statute isn't going to keep you alive forever. We're all going down--it's just that some are going down a steeper hill than others."
The seven tracks in Ohio--three Thoroughbred and four Standardbred--will offer almost 1,000 live racing programs in 2004. Handle in the state is down about $30 million this year, and is projected to decline about 6% in 2004.
Meanwhile, it was announced the Ohio Thoroughbred Race Fund would be reduced 15% ($500,000) in 2004 because of declining revenue from handle. The two Best Of Ohio 2-year-old races have been scrapped and will be replaced on the program by two other 2-year-old stakes in an effort to reserve funds.
Also, the Thoroughbred industry's share of grant money to Ohio State University for research was cut from $200,000 to $100,000 for 2004, and the Standardbred industry's share was increased from $65,000 to $100,000 despite objections from the harness community.
The Ohio HBPA has said the Thoroughbred industry for too long has carried the Standardbred industry in the state, and continues to work on ways to, in its words, level the playing field.
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