PNGI: Status Quo on Ohio Tracks for Now

by John Kady and Tom LaMarra

Penn National Gaming Inc., which owns two racetracks in Ohio, said it will run full live racing schedules at both tracks for the rest of this year and possibly next year depending on resolution of a legal challenge to a 2011 racetrack gaming law.

PNGI is seeking to move Beulah Park near Columbus to the Youngstown area, and Raceway Park, a Toledo harness track, to Dayton. The gaming and racing company is building casinos in Columbus, and Toledo, and believes that racetrack video lottery terminals would put it in competition with itself in those markets.

Bob Tenenbaum, an Ohio-based PNGI spokesman and consultant, said it would take almost a year to build new racetrack casino facilities in the new locations. The company plans to spend about $250 million, including license fees, on each project.

Beulah Park races from early October through early May.

The constitutionality of the Ohio Lottery Commission authorizing racetrack VLTs has been challenged by the Ohio Roundtable; the case is making its way through the courts. It is expected the outcome will be challenged.

Meanwhile, during a May 8 conference call on first-quarter earnings for 2012, a Churchill Downs Inc. official noted the company won’t invest much money in an Ohio venture with Delaware North Companies until the legal challenge is resolved.

CDI and Delaware North earlier this year announced plans to purchase for $60 million two racing licenses at Lebanon Raceway, a harness track located at the Warren County Fairgrounds between Cincinnati and Dayton, and construct a new racetrack with VLTs closer to Dayton.

Bill Carstanjen, president and chief operating officer at CDI, said the “next big event is expecting a ruling on the legal matter, and we expect something around Memorial Day. While we’re working very hard on the pre-planning of what we can do, we’re not planning to sink any money into the ground until we have much better visibility” as to the legality of VLTs.

Of the seven racetracks in Ohio, only one—Scioto Downs, a Columbus harness track owned by MTR Gaming Group—has moved forward with its VLT plans and obtained a preliminary license. The casino at the track, which opens for live racing May 10, is well under construction; company officials still say gaming could commence this summer depending on the court ruling.

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