OH Racetrack Developers Put Through Ringer

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Companies that plan to construct new racetrack gaming facilities in Ohio have been summoned to appear before the Ohio State Racing Commission for a third time March 27.

After initial presentations in February and early March, the companies–Penn National Gaming Inc. and the partnership of Churchill Downs Inc. and Delaware North Companies–returned before the OSRC March 20 with revisions. Racing commissioners weren't satisfied.

The OSRC has expressed repeated displeasure with the amount of indoor seating with views of live racing. To a lesser extent, the number of stalls for horses or lack of a barn area has been met with resistance.

PNGI, which operates full-scale Ohio casinos in Columbus and Toledo, has requested to move Beulah Park near Columbus to Austintown Township in northeastern Ohio, and Raceway Park, a harness track in Toledo, to Dayton. The plan is to build racetracks with video lottery terminals to take advantage of new markets in the state and to avoid competition with its own properties.

CDI and Delaware North purchased the racing licenses of Lebanon Raceway, a harness track that would move to a location between Cincinnati and Dayton. The track would have VLTs.

For the relocated Beulah Park, to be called Hollywood at Mahoning Valley Race Course, PNGI told the OSRC it would add about 650 outdoor bleacher seats to bring total racing-related seating to about 1,400. The OSRC, however, questioned having outdoor seats during a meet that would run from October through April in a snow-prone area.

The new track in Dayton would have about 850 seats exposed to the elements. The track probably would race in the fall, winter, and spring depending on how the circuit is structured.

"I still have concerns about the number of seats," OSRC chairman Robert Schmitz said. "If you could take a look at that, I would appreciate it."

Schmitz said the same thing to the partners in the Miami Valley Gaming & Racing project. Neither of the relocated harness tracks would have barn areas.

"I'm very disappointed," Schmitz said. "I can't over-emphasize the need for more seating."

The plans for the new facilities must be approved by the OSRC and the Ohio Lottery Commission, which oversees racetrack VLTs in the state. Scioto Downs, a harness track in Columbus, opened its VLT casino in June 2012; Thistledown, near Cleveland, will begin its VLT operation April 9.

It remains to be seen how far the OSRC will push the racetrack developers on their facility plans.

PNGI already has said any major adjustments to existing structural plans would be difficult because of the economics of the project. At the March 20 OSRC meeting, John Finamore, PNGI senior vice president of regional operations, said each new facility would cost about $250 million: $125 million for construction, $75 million for a relocation fee, and $50 million for the licensing fee.

"It's a significant commitment Penn National intends to make here in the state of Ohio," Finamore said. "We're proud of our record of acquiring and developing racetracks around the country.

Meanwhile, Pinnacle Entertainment told the OSRC of its plans for a rebuilt racetrack and VLT facility on the grounds of River Downs, which was demolished earlier this year and is supposed to reopen sometime in 2014. The new River Downs will have only 1,450 seats, some of them covered with a canopy.

The OSRC didn't balk at the River Downs plan, noting the track races in the spring and summer. None of the four planned facilities will have dedicated dining rooms overlooking the racetrack.