Magna, Florida Horsemen OK Slot Revenue Split
Updated: Saturday, July 15, 2006 2:28 PM
(Edited Florida Thoroughbred Breeders' and Owners' Association release)
Posted: Friday, July 14, 2006 9:39 PM
After months of wrangling, Magna Entertainment Corporation and the Florida horseman agreed Friday evening to the percentage of slots revenue that will increase horseracing purses at Gulfstream Park.
"This is a fair agreement for all parties -- the breeders, the horseman, and Gulfstream," said Sammy Gordon, president of the Florida Horsemen Benevolent and Protective Association. "We're looking forward to continue to improve the industry. We appreciate Fank Stronach's participation in the final days of negotiations."
The agreement calls for 500 machines to be installed by Oct. 15 at the Hallandale facility owned by Magna, which also owns seven other tracks around the country.
The contract specifies that the FHBPA will receive 7.5% of the earnings of Magna's initial installation of 500 machines. Once 1,500 machines--the maximum allowed under law--are installed, the share drops to 6.75% of revenue less than $200 million and 12.6% for revenues over that amount.
"I am proud that the industry was able to get together and put horseracing first. It just shows that, when we all get together, this industry can make things happen," said Donald Dizney, president of the Florida Thoroughbred Breeders' and Owners' Association.
Slots will result in larger purses over the 80 days of Thoroughbred racing at Gulfstream. After a full year of operating the 500 machines, the estimated daily purses, which are currently at about $300,000, would increase to just under $400,000. At 1,500 machines, the purse estimate grows to more than $500,000, which would be among the highest distribution in North America.
"The agreement was essential to get slots operating in Gulfstream," said Bruce Green, attorney for the FHBPA. "Under state legislation, Thoroughbred racetrack operators must have signed deals with both the FHBPA and the Florida Thoroughbred Breeders' and Owners' Association before slots operation can begin. The contracts govern how much of the revenue from slots would go toward increased horseracing purses and breeders' and owners' awards."
The FTBOA and Magna made their agreement in December.
The State of Florida, with the nation's highest tax rate at 50%, could clear upward of $50 million the first full year of slots operation. A major benefactor to that windfall will be the state's education program. Year-round employment for local residents is another benefit.
"I think this is a wonderful day for Florida Thoroughbred breeding and horse racing," said Richard Hancock, executive vice president of the FTBOA. "Everyone is satisfied, and we can now all focus on additional methods to improve Thoroughbred breeding and racing."
A similar measure to allow slots in Miami-Dade County, where Calder Race Course is located, was defeated at the polls.
The Ocala Breeders' Sales Company's board of directors voted last month to pledge $15,000 to the Florida Horsemen's Benevolent and Protective Association to help in their stalemate. At the time, Gordon called the move between the horsemen the FTBOA and OBS a show of unity among the different entities involved in the Thoroughbred industry.
"From my perspective, we have come a long way over the past several months and in the process have gained a better understanding of each other's views regarding the future of our industry," Frank Stronach, Magna chairman of the board said in a statement.
Gulfstream, Pompano Park, Dania Jai-Alai, and Hollywood Greyhound Track--now known as the Mardi Gras Gaming Center--are the only venues allowed to offer slots under the current rules.
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