Ohio Tracks, Horsemen Close to VLT Agreements

By law the percentage of revenue to purses will fall between 9% and 11%.

With a deadline fast approaching, Ohio racetracks and horsemen's groups indicated Dec. 19 they are close to having definite deals on the percentage of video lottery terminal revenue that will go to purses.

The parties have had more than two years to agree on percentages, which must be decided by Dec. 31. The VLT legislation in Ohio states that if tracks and horsemen can't agree on the number, the Ohio State Racing Commission will determine it.

A 2012 casino clean-up law set the purse share at a minimum of 9% and a maximum of 11%, and a 2013 law states that if there is no agreement as of Dec. 31, the OSRC must take action.

Ohio Horsemen's Benevolent and Protective Association executive director Dave Basler told the OSRC the organization has had recent talks with Rock Ohio Gaming, the partnership that owns ThistleDown Racino, and Penn National Gaming Inc., which is moving the Beulah Park license to the Youngstown area.

Concerning the track formerly known as Thistledown, Basler said: "We had several discussions last week with Rock Ohio Gaming management. We made progress, but there are a couple of outstanding issues. It's not so much the (VLT percentage) as it is the commencement date of the agreement."

ThistleDown Racino opened for live racing in April with VLTs. Because there is no agreement with horsemen, the minimum of 9% was placed into an escrow account overseen by the OSRC and paid accordingly.

The lack of a deal, however, led the Ohio HBPA to withdraw its approval for the track to export its signal outside of Ohio and a few advance deposit wagering outlets for the entire 122-day meet, so pari-mutuel wagering on the live product tanked.

Basler and PNGI vice president of racing Chris McErlean said the two parties recently signed a "non-binding term sheet" that covers various things including the number of stalls at the new Hollywood Gaming at Mahoning Valley Race Course and the VLT percentage. The deal calls for 988 stalls plus a receiving barn; PNGI earlier said it would build no more than 750 stalls unless business warranted.

"The term sheet addresses the economic terms," McErlean said. "It will be part of a definitive contract that we hopefully will have done by the next racing commission meeting (in late January)."

Though the idea was for there to be one VLT percentage for all tracks in Ohio, it appears the number will vary from track to track because of individual contracts and certain capital improvement considerations, though it must fall between 9% and 11%.

OSRC chairman Robert Schmitz warned the tracks and horsemen's groups about the impending deadline.

"Absent agreements by the end of the year, you will see from this commission rules promulgated to determine what the (VLT percentage) will be," Schmitz said. "We prefer to have this settled under the current framework."

On the pari-mutuel side, total wagering at Ohio tracks and one off-track betting parlor was down 13.2% from Jan. 1-Dec. 14 of this year. The total was $178.76 million.

On-site handle on live and simulcast races at the three Thoroughbred tracks totaled $69.31 million for the period, down 27.4% from the same period in 2012. The four harness tracks have fared better with total wagering of $109.45 million, down only 0.9% from last year, according to OSRC statistics.