VLT Revenue Declines, and So Will Purses

Citing a decrease in gaming revenue, Mountaineer will cut overnight purses 10%.

The economy continues to take its toll on racetracks, including those with alternative gaming.

Mountaineer Casino, Racetrack & Resort in West Virginia said it will cut overnight purses 10% effective April 20. This year through March 15, purses have averaged $108,989 per program.

Mountaineer director of racing Rose Mary Williams said March 13 revenue from video lottery terminals, the primary driver of purses at the track, declined this winter because of “economic and weather conditions” that impacted business.

In its most recent earnings report, parent company MTR Gaming Group noted VLT revenue for the fourth quarter of 2008 was down $6.6 million from the same period in 2007. Net revenue at the facility, however, increased about 6%, officials said.

The 10% reduction means the bottom purse, currently $9,100 for $5,000 maiden claimers, will fall to about $8,100. Maiden special weight events will drop from $21,800 to about $19,600. Open allowance events, now $41,600, will be worth about $37,400.

Purses at Mountaineer began to increase dramatically along with the number of VLTs more than 10 years ago, but they have leveled off, as has revenue, in recent years.

In 1995, purses averaged $25,635 per night for 226 racing days, according to The Jockey Club Information Systems. In 2000, purses average $111,797 for 221 days, and by 2005 had increased to $151,642 per night for 216 programs. In 2008, however, purses averaged $143,546 for 215 programs.

The 2009 stakes schedule—28 events worth almost $3 million--remains intact and begins May 2. It’s highlighted by the $750,000 West Virginia Derby (gr. II) and eight other stakes scheduled for an afternoon program Aug. 1.