In the aftermath of the failed passage of the legislation that would have allowed video lottery terminals at Kentucky racetracks, several Thoroughbred industry members voiced their opinions on how they will survive without the extra boost to the state’s purse structure and breeders’ incentive programs.
Ken Ramsey, who owns Ramsey Farm near Nicholasville, Ky., said that without additional funds to bolster the industry and keep it competitive with surrounding states, he will be forced to cull a portion of his 190-member broodmare band, as well as cut back on his racing operation.
Although Ramsey believes the state needs the additional revenue to keep its signature industry competitive, his opinion on the slots matter is quite different than most horsemen.
“I’m a businessman and an entrepreneur, and I think a mature industry like the horse industry should be able to support itself and not have to be placed on life support,” he said. “I’m not in favor of a bailout or subsidies except in an extreme emergency. However the horse racing industry now qualifies for some sort of assistance, and if we don’t get it, it’s going to be a drastically changed game.”
Ramsey called the slots solution, however, a “tax on the poor” and a “drain on the people.”
“The casino operator has almost all the money,” he said. “You have a trickle-down effect that would benefit the people associated with the industry. The slot machines will certainly help, but it’s a short-term solution for a long-time problem. The racetracks would be more interested in promoting the casino than they would the racing, because that’s where the profits are.”
Ramsey used examples of the dog track in Hallandale Beach, Fla., as well as nearby Gulfstream Park, which have both acquired casinos. The dog track’s facilities, which used to be well maintained, are now in disarray, while the casino has all the frills. Gulfstream’s makeover, which included the addition of plush slot machine area, neglected to leave adequate room to watch the races.
“Frank Stronach built a racino, and the horses are sideshow because they’re necessary for him to get a license to operate a casino,” said Ramsey.
Ramsey offered several solutions in lieu of letting casinos take over Kentucky’s racetracks. The taxes on claiming horses, track licenses, cashing tickets, takeout percentages, and stallion fees could all be reduced or removed, he said. The same taxes don’t exist in other such states as New York.
“People seem to forget is who actually supports horse racing,” said Ramsey. “It’s the $2-bettors. The (Kentucky) pari-mutuel takeout started out at 10%. It’s now gotten up in some places to 30%. Reducing takeout does not require a constitutional amendment or an act of the legislature. It just requires the state to mandate the takeout is going to be reduced to 10 or 15% on all wagering. If we had this in Kentucky, the gamblers from New York and California, would place wagers on Kentucky racetracks because the takeout would be so much less.”
Ramsey said he is currently campaigning horses at Presque Isle Downs in Pennsylvania even though Churchill Downs is still holding its meet because he can make twice as much at the former track, which is subsidized by slots.
“I enjoy winning at Churchill—I’ve been leading owner 15 or 16 times, but I can be leading money over there and still lose money, because it costs a lot of money to maintain and keep a racehorse, especially if you breed and race him all the way through.
“To take advantage of the other incentives the other states are offering, I bought a van, so I transport my own horses. This year, I sent seven mares to New York, seven to Illinois, seven to Pennsylvania, and seven to Canada to foal. They are now eligible to run in those state-bred programs where they have all the incentives. You get almost double the purse by the time you get the owners and breeders awards, stallion awards, etc. which makes it very lucrative for me.”
Doug Cauthen, president of WinStar Farm near Versailles, Ky., called the recent failure of the VLT bill “detrimental” to the Kentucky horse industry as a whole.
“We’re at a competitive disadvantage with other states, and that puts Kentucky in a dangerous position,” he said. “We’re going to try our best to make things work, but that can entail taking advantage of those other states, which it already does.
“We love running in Kentucky at Keeneland and Churchill, but we have to make a business decision, and most of the time right now, that means sending horses to Presque Isle and Woodbine and other places to try and take advantage of those programs, because they are lucrative. We’re going to do what’s best for the horses and the farm, and we’re going to work very hard to survive. Our revenues are off 40%, so I think that’s evidence.”
Cauthen said his operation is currently about 80% finished with building a new training track and an additional barn, a multi-million dollar project they had planned before the industry began its current decline.
“We’re a for-profit business, and we’ve got to adjust, and we have had to make some adjustments, but we did continue that project, because it was basically already in shape,” he said. “We think it could help us as far as our preparation of horses for racing.
“I run a horse farm, so we’re working hard to do what we can here with promotions, marketing, dropping prices, etc. to handle our customers’ needs. The tracks are trying to do the same things. There are a lot of positives with Trackus (technology at Keeneland) and night racing (at Churchill), but it seems unfair, and it seems like we’re a basketball team playing with four players right now against other states. I think that’s a tough game to win.”
Conditioner Eric Reed, who runs a 115-horse training center on the old Spenthrift Farm property near Lexington, is also sending horses out of state to race for bigger purses.
“A couple of weekends ago, I had 15 horses race, and 10 of them raced out of state for the purse money, from Presque Isle, to Mountaineer, to Arlington,” he said. It’s a shame (to send horses out of state), because I really don’t like going six hours away when I can run in my own backyard, but they’re taking that away from us. I’ve had to start taking to horses to Oaklawn in the wintertime, and I haven’t traveled in 15 years, but some of the owners weren’t satisfied with the purse structure at Turfway, and in the summertime that’s going to start happening as well. I’ve got children in school; I don’t want to be on the road every day going to a new state to race my horses. It’s really given me a lot to think about.”
Reed even went as far as to say he may have to relocate his operation somewhere where there’s year-round racing so he can be with his family more and not spend so much time on the road.
“The miles I’m putting on my trucks is unbelievable,” he said. “There are a lot of things the industry needs to do. The VLTs are going to be a big help and they’ll keep us in the game, but we’ve also got to find a way to make the business more attractive to younger people and to everybody and make it more economical to go to the races. Spending Friday evenings at Churchill is showing what can happen if we give people the opportunity. I think the tracks need to kick in…the dollar beer night at Turfway is a huge success…they need to look at things like that to get more fans to the track to help build the handle that way too. There are a lot of things they can do without the VLTs, but I don’t see how we can survive without both.
“The local people that live in Kentucky and race here year-round, I think (traveling to other states) is going to become a necessity, because we’re losing Ellis Park, and we’re being threatened with losing Turfway, and that’s scaring future business away. I don’t know if we didn’t have Turfway—that’s six months of racing a year. It’s really starting to scare a lot people, including myself.”