Prairie Meadows Racetrack and Casino estimates its horse racing program ran a $29,215,000 deficit in 2006.
The estimate was presented at the Nov. 28 board meeting of the racetrack/casino. It listed $4,583,000 in net revenue from wagering on live racing and simulcasts, with expenses of $33,798,000.
The cost of racing has been an often-debated question since the not-for-profit Prairie Meadows turned from a white elephant to a cash cow after adding slot machines in 1995. And now that there is at least a ballpark figure to consider, it’s sure to get more debate.
“It’s definitely concerning,” board member Michael Galloway said. “It’s something that we have to watch. At Prairie Meadows, there is a commitment to horse racing, but obviously, when you see a $34-million expense and approximately a $4.5-million profit out of that, it raises concerns.”
Horse interests maintain their statewide support was crucial in Prairie Meadows getting enough votes to get the slots legislation passed in 1994. That law stated a share of casino profits should go to horse racing, but was vague and didn’t say how much. So, whether Prairie Meadows is a horse track with a casino or a casino that pours too much money into horse racing depends on the point of view.
“By law, we’re required to support a viable racing program if we’re going to have a casino,” board member Ron Morden said. “It doesn't get specific, so the job of this board is to balance the necessity of providing that program with the necessity of providing community betterment. And that’s always a judgment call.”
The report estimated casino operations produced a $34,185,000 profit in 2006, with just under $181 million in revenue and nearly $147 million in expenses.
The biggest chunk of the horse expense was for purses. Prairie Meadows paid $18,073,000 for purses in 2006, with another $1.3 million going to harness purses on the Iowa fair circuit. Since Iowa law requires 11% of casino revenue, less Polk County’s obligation to Vision Iowa, to go to purses, how much the board could cut from horse racing if it wanted to is uncertain.