Calder Handle Rebounds From Troubled Year
All-sources handle at Calder Race Course rose 48%, from $131.4 million to $195 million, during this year’s second quarter, according to parent company Churchill Downs in a report to the Securities and Exchange Commission. But Calder’s handle for the quarter ended June 30 was 22% below its handle of $249 million for the second quarter of 2007.
Calder’s first-quarter 2008 handle sank to $131.4 million because of contract disputes between track management and the Florida Horsemen’s Benevolent and Protective Association. Horsemen’s groups in several states prevented the Florida track from sharing simulcast signals with several tracks, and prevented several major advance deposit wagering companies from carrying Calder races.
Calder opened its 2009 meet April 24 with all purse and distribution contracts signed with the Florida HPBA. That has helped Calder post a significant bounce back in off-site handle. But Calder’s on-track handle has declined this year amid an economic depression that is impacting almost all Thoroughbred tracks.
“We expected more, but we are not terribly disappointed,” Calder vice president and general manager of racing John Marshall told The Blood-Horse Aug. 1.
Marshall noted the impact of the economy and said an abnormal period of heavy rain, especially in June, reduced Calder’s estimated attendance and the number of turf races, which in turn impacted pari-mutuel handle. Calder was able to hold turf races on only five of its 16 June race dates. Through July 26, the track had taken 102 races off the turf, compared with 55 through that date last year.
“But handle began coming back a bit in July,” partly because rains have been less severe, Marshall said.
Marshall and Kent Stirling, executive director of the Florida HPBA, said if the handle trend continues, they expect Calder will be able to avoid making cuts in overnight purses. Marshall also noted Calder is coming into the stronger part of its eight-month live season, and that the track is preparing to add a poker room in October and open a slot machine casino in January.
Marshall provided partial Calder handle figures year-to-date through July 26. That includes first-quarter numbers, when Calder is open for full-card simulcasts only. For that seven-month period, Calder all-sources handle rose 37% from $190.5 million in 2008 to $260.5 million this year. Data for that period in 2007 was not readily available.
Calder’s interstate handle rose 238%, from $35 million to $119.7 million, for that period between 2008 and 2009. That covers simulcasts and ADW. But Marshall said on-track betting was down 19% year-to-date. He didn’t provide numbers on that or Calder’s intertrack handle at other Florida pari-mutuel outlets.
Calder began its meet with a target of $160,000 for average daily purses, excluding graded stakes. “We started out at $180,000 (a day),” Marshall said. “But we soon determined that was too high. So, we moved back to the $160,000 level that we feel we can approach.”
Marshall said Calder was “dangerously close” to announcing a purse cut in June. But he and Stirling said at their regular weekly meetings, Calder officials told the Florida HBPA they would hold off on any cuts.
“We are seeing a positive trend,” Marshall said. “That has lessened the chances of any potential cuts. The purse account is not in a deficit.”
Stirling said Marshall and Tom O’Donnell, Calder’s president and general manager “are listening to the concerns of the horsemen.” Both joined Calder late last year.
Calder in July began construction of the Studz Poker Room it plans to open in October, with 29 tables. It has put in the outer walls for that room on the west side of the ground floor of its grandstand.
“We are working on developing and implementing strategies for our Studz Poker Room to build synergies with poker and our live racing and simulating,” Marshall said.
Under state law, 47% of Calder’s monthly card room net proceeds are designated to supplement purses, and 3% will supplement breeders’ awards. Net proceeds are a card room’s gross receipts (money players pay to participate) minus direct operating expenses.
The Florida HBPA anticipates that Calder poker could contribute about $1 million to purses and breeders’ awards next year.
Calder expects to open its $85-million casino in late January. The 104,000-square-foot building will have 1,225 Class III Las Vegas-style slot machines.
The planned opening is partly timed to generate traffic from attendees of Super Bowl XLIV. The game will be held Feb. 7, 2010, at Land Shark Stadium (formerly known as Dolphin Stadium), which is one mile south of Calder.
Calder is using the name “Calder Casino & Race Course” on most of its promotional materials.
A state law passed in May would reduce the state slots tax from 50% to 35% at pari-mutuel casinos in Miami-Dade and Broward counties. Gulfstream Park in Hallandale Beach, Fla., has had a casino since November 2006.
However, the law will take effect only if the Seminole Tribe of Florida, which has seven casinos, accepts it as part of a gaming compact it is negotiating with Florida Gov. Charlie Crist. The tribe has until Aug. 31 to approve a compact. The Seminole Tribe reportedly is objecting to the gaming law because it would allow black jack and baccarat at only four of its casinos.
If the Seminoles do not agree to a compact, it is possible the Florida legislature, which would meet in a special session, might not be able to pass an amended gaming law this year. That scenario is raising concerns the rate will stay at 50% at least into early 2010.
Calder and CDI formed the business plan for a casino based on a 50% rate even though they are hopeful the rate will be 35%, Marshall said.
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