Prediction from a few racing industry executives: If you’re a racetrack without slot machines, you’re doomed.
And so it went April 27 on the final day of the Kentucky International Equine Summit at which, like many industry meetings, it was hard to find people with much visible passion or excitement for horse racing. Stagnation and dysfunction—as well as a lack of solutions--shadowed the business-oriented panel discussions.
Earlier in the day, it was suggested at another panel that the industry’s two weekly magazines, The Blood-Horse and Thoroughbred Times, would be out of business in five years because of declines in the racing and breeding industry. At yet another session, speakers offered no hope of fixing a pari-mutuel business model that sucks money from live racing.
In response to a question from the floor during the “New Business Models for Racetracks” panel on the future for racetracks without any form of gaming, racing executives were blunt.
“I think your days are numbered,” said Louis Cella, whose family owns Oaklawn Park in Arkansas. “Done.”
“Ditto,” said Penn National Gaming Inc. vice president of racing Chris McErlean.
Cella is a principal in RaceTech, the company that produces the Instant Racing machines operating at Oaklawn. McErlean’s publicly traded company pursues racetracks only if they have slot machines or have the prospect of getting slots.
So is their take on racing’s fate reality, or has the industry’s obsession with gaming revenue corrupted it?
The question wasn’t answered during the equine summit hosted by the University of Louisville in conjunction with the University of Kentucky.
Nick Eaves, vice president and chief operating officer for Woodbine Entertainment, offered a softer view, saying the prospects for racing aren’t good without a mix of products, including gaming. Woodbine Entertainment, however, is a non-profit with a mission of improving horse racing; the slots are operated by the Ontario Lottery Corp.
The panel discussion carried through on a theme addressed by National Thoroughbred Racing Association president and chief executive officer Alex Waldrop, who, in an earlier interview with The Blood-Horse on purses, said problems develop when racing allows gaming companies to control the discussion.
On April 27 during another panel talk, Waldrop said the NTRA has been busy tackling issues such as integrity and equine safety, and when those matters are satisfactorily addressed, the organization intends to spend more time marketing and promoting racing, which was its mission when it was formed in the late 1990s.
McErlean said PNGI’s goal is to make money—or at least not lose any—on horse racing.
“The demands are really great in getting racing operations to break-even status,” he said. “We are convinced the business model of racing does need to change. The status quo is not working.”
McErlean also said racing, particularly on a regional level, should be coordinated across state lines. He said he supports Monmouth Park in New Jersey for its plan to have a shorter meet with higher purses, but suggested it would only work if “everybody in the region was on the same page” as far as racing schedules.
Cella said Oaklawn has doubled purses to $300,000 a day in 10 years solely because of Instant Racing machines, which resemble video lottery terminals but are pari-mutuel in nature. Despite his comment on the future for tracks without gaming, Cella didn’t dismiss the value of live racing.
“Horse racing is bigger than all of us,” Cella said. “The key is how we package it. Our foundation (of live racing) has not changed.”
Eaves outlined the recent history of Woodbine Entertainment and how the operation’s business levels are almost back to 1990 levels because of a solid mix of live racing, simulcasts, off-track betting, advance deposit wagering, and slots. Woodbine also plans to construct a mix of retail shops, restaurants, and entertainment offerings on its property.