by Brian Kraft
The Ohio State Racing Commission met with four representatives from Penn National Gaming Inc. April 20 to question them on the proposed purchase of Beulah Park in Grove City, Ohio.
Also in attendance was an 800-pound gorilla—statewide elections in November that could authorize video lottery terminals at the state’s seven racetracks, including Beulah Park.
While OSRC members said they were grateful for PNGI’s interest in the suburban Columbus Thoroughbred track, they also questioned the company’s business plan in light of the uncertainty surrounding the November VLT vote.
“There is a lot of talk of November, November, November,” commissioner Thomas Zaino said. “To be honest, I see this as a $37-million gamble that VLTs will pass in November, or sometime in the future. That would be a concern that I would have.
“We are a horse racing commission, not a gaming commission. We are not the lottery. How is this going to help horse racing if November goes badly?”
PNGI representatives acknowledged the importance of the election but sought to assure commissioners and the nearly 40 people in attendance that their resources and experience at other tracks make PNGI capable of withstanding short-term losses better than most companies.
“This acquisition, it is a gamble,” PNGI vice president of racing Chris McErlean said. “But as you see with Raceway Park, we have stuck with Ohio racing. We will be frank: Raceway Park loses money—a substantial amount of money. However, we have continued to invest in Raceway and continued racing operations. Hopefully, this company has the resources to withstand these losses.”
Raceway Park is a harness track in Toledo.
McErlean acknowledged PNGI’s business plan could not be complete without knowing the results of the November elections, but he would not say the elections were a make or break proposition for Beulah Park.
“This November referendum is not the end of the line for us,” he said. “If it doesn’t happen this November, there are other opportunities down the road. We are not looking at this as a 10-month plan. This is not a flip or a short-term acquisition. If the right result doesn’t happen in November, we are not going to walk away from the table.”
McErlean cited the example of West Virginia, where voters initially rejected table games at the company’s Charles Town Races & Slots but eventually approved the games.
The commissioners also expressed concern PNGI was buying Beulah Park with the intention of shutting it down to eliminate competition with its full-scale casino, approved last fall to open in Columbus. McErlean and other company officials refuted the idea.
“The answer to that is no,” said Thomas Auriemma, PNGI vice president and chief compliance officer. “We are optimistic about November. And if it doesn’t happen in November, there are other alternatives. We are a patient company. We have been patient in other jurisdictions, and have been successful with that with both racetracks and stand-alone casinos. We are not buying this just to shut it down. That is not our intention."
Beulah Park wraps up its winter/spring meet in early May. It is scheduled to reopen in the fall. Like other Ohio racetracks, Beulah Park is suffering from continued declines in pari-mutuel handle.
