Despite VLT Order, Turmoil Continues in Ohio

The live racing schedule for Ohio in 2010 will have to wait.

After witnessing the Aug. 20 meeting of the Ohio State Racing Commission, an observer wouldn’t know the state’s horse racing industry is in line for a potential windfall from alternative gaming.

Five of seven racetracks failed to have their 2010 applications for dates approved because they don’t have an agreement with horsemen or have other conflicts; several requested fewer racing dates than were scheduled for this year; and one facility—Raceway Park, a Toledo harness track--indicated it wouldn’t mind closing its barn area.

Racing commissioners and commission staff expressed annoyance over the developments given the potential of racetrack video lottery terminals and the fact racetrack officials and horsemen were warned last year to resolve dates issues early. Final approval of 2009 dates lingered into this year.

On the Thoroughbred side, Beulah Park was granted its request for 125 days of live racing in 2010, the same number slotted for this year. Thistledown requested 122 days, and River Downs 107 days.

A year ago, Beulah Park and River Downs requested huge reductions in dates for 2009 because of disputes with horsemen. There are no lingering issues this year, but River Downs and Thistledown still have no official deal with the Ohio Horsemen’s Benevolent and Protective Association.

The Ohio HBPA wants Thistledown to apply for 187 days, the minimum number required for the Cleveland-area track to offer full-card simulcasts in 2011 absent an agreement with horsemen. Thistledown general manager Brent Reitz said track owner Magna Entertainment Corp. is in the process of selling Thistledown to an unidentified buyer and wouldn’t apply for more dates than it requested for 2009.

“We did what we felt was best,” Reitz said.

River Downs also is below the minimum number of dates—119—required for it to offer full-card simulcasts in 2011. When asked by the OSRC if the track has a deal with the Ohio HBPA, River Downs general manager Jack Hanessian said: “I haven’t heard from the horsemen.”

Ohio HBPA executive director Dave Basler, who attended part of the OSRC meeting, said there is no official agreement with River Downs on 2010 dates but he believes the request for 107 days of racing will be accepted by the membership. “I don’t think (Hanessian) will have to resubmit his request,” he said.

Dates for River Downs, Thistledown, and three harness tracks were deferred until a special meeting Sept. 3. Aside frorm Beulah Park, only Northfield Park, a harness track, had its 2010 schedule approved.

The OSRC reserves to right to deny any request for dates, and could do so at the special meeting.

“It just frustrates me the horsemen can say, ‘Yeah, we think it will be fine, but you’ll get a decision by Sept. 3,’ ” said racing commissioner Tom Zaino, who last year pushed for quick resolution of racing dates.

Penn National Gaming Inc.-owned Raceway Park, one of the tracks asking to cut dates next year, has only 53 horses in its barn area, general manager Bill McLaughlin said. The other horses ship in from farms or other tracks.

“We’re trying to investigate ways we could consolidate costs,” McLaughlin said. “We’re basically a ship-in facility now; we keep the backside open for three or four entities. It’s quite expensive to keep it open.

“I don’t think it would have a negative impact at all on our operation.”

The Ohio Harness Horsemen’s Association indicated it’s open to discuss the issue, but OSRC executive director Tom Fries Jr. said that isn’t a good idea given the current climate in Ohio. The OSRC must approve any track’s plan to close a barn area.

“For the betterment of the racing industry and horsemen, and with the potential coming down the pike, staff would urge them to do everything they can to keep the backside open,” Fries said. “With the opportunities that could be coming (because of gaming), it would be a tragedy to let that happen.”

PNGI is one of the backers of a November referendum to authorize casino gambling in Ohio’s four largest cities, including Toledo. The company hasn’t yet said it intends to install VLTs at Raceway Park, though the first licensee fee payment of $13 million is due to the state by Sept. 15.

When asked after the meeting about the apparent disarray that continues in the racing industry despite the VLT directive signed by Democratic Gov. Ted Strickland, OSRC chairman Willie Koester said much hinges on the developments of the next few weeks. The Ohio Supreme Court Sept. 2 will consider a legal challenge to Strickland’s directive.

“It’s going to be a while (before things straighten out for racing),” Koester said. “We’re all waiting to see what happens (in court), but we’re confident it will go the right way.”

Also pending is a deal between racetracks and horsemen on VLT revenue that will go toward purses and breeding programs. The tracks are offering to start at 4%; Thoroughbred horsemen have pushed for 10%.

Another meeting will be held the week of Aug. 24. It remains possible the OSRC, all members of which are appointed by Strickland, may have to use its power to bring about a deal.

“We have not been invited to participate in (those negotiations) as yet,” Koester said.

Basler later said the Ohio HBPA asked Koester to attend the latest negotiating session, but racetrack officials balked at having the commission chairman in the room.

"I'd have these negotiations as a public hearing," Basler said. "I want to get a deal done."