Cooperation Urged on Racing, Gaming

The relationship between racing and gaming was examined at a Pennsylvania conference.

An executive with experience working at racetrack casinos said Feb. 25 that even though slot machines are the revenue driver, horse racing has value and can have even more if gaming and racing factions work together.

“There’s no argument there is a one-way synergy,” Jim Rafferty, president and chief executive officer of New Hampshire Charitable Gaming, said of the relationship between gaming and racing. “But horse racing is worth saving.”

Rafferty, who spent three years with Delaware North helping design and develop racetrack casinos, was one of several speakers during the Mid-Atlantic Racing Forum, part of the Pennsylvania Gaming Congress in Harrisburg, the state capital. Rafferty, while with Delaware North, also served as vice president of marketing at Wheeling Island, a West Virginia Greyhound track with casino gaming.

Rafferty acknowledged the challenges faced by horse racing. But he said a lack of cooperation is a major hindrance; at Wheeling Island, management and kennel owners couldn’t even agree on a United Way campaign for charitable purposes.

“We’ve never acted as a team in approaching the marketplace,” Rafferty said of casinos and racing. "Working together and common ground is the key. Why can’t we all work together?”

Such friction is common around the United States. When asked after the meeting why he believes horse racing is worth saving, Rafferty said it’s a component of a “multifaceted complex” of entertainment. In other words, people need to look at the big picture.

“These divisions are what are wrong with the model,” Rafferty said. “(Progress) is not going to happen when there are too many disparate interests.”

Rafferty cited New Hampshire poker rooms as an example of how racetracks without gaming can utilize their facilities to generate traffic and revenue. Though the New Hampshire poker rooms are classified as “charitable,” they have generated about $50 million in play in only one year.

“We’re seeing tremendous synergies between poker and the racetracks,” Rafferty said.

Shonette Harrison, vice president of casino marketing for Harrah’s Chester Casino & Racetrack in Pennsylvania, said simulcast handle increased about 30% and live handle 20% when slots began operating. The company, she said, expanded its rewards program to pari-mutuel wagering.

Harrison said slots and racing customers are quite different, but slots players often come in groups and are exposed to harness racing at the integrated facility.

“In our opinion, the casino has introduced new people to harness racing,” she said.

Joe Santanna, president of the National Horsemen’s Benevolent and Protective Association and the Pennsylvania HBPA, said demographics indicate owners and trainers have similarities to casino customers. He said of Thoroughbred owners and trainers, 70% are older than 50; 87% use the Internet in some form; 55% have cell phones; 36% have at least two homes; 70% eat at restaurants at least four times a month; 35% gamble $500-$2,500 a month; and 63% have a household income of $50,000-$250,000 a year.

John Finamore, senior vice president of regional operations for Penn National Gaming Inc., said the company took a chance--and was hit with criticism--when it opted to not build a temporary facility at Penn National Race Course and instead demolish and rebuild the grandstand/clubhouse. The new facility opened Feb. 12 as the Hollywood Casino at Penn National.

Finamore said PNGI “learned valuable lessons” from its Charles Town Races & Slots in West Virginia. That facility was remodeled and built out as more slot machines were added.

“From a design standpoint and integration of racing and slots, it doesn’t work as well (as Penn National),” Finamore said. “Frankly, at Charles Town, it’s hard to find (the racing).”

Hollywood Casino at Penn National is integrated with easy access between slots, racing, dining, and a sports bar. The dining room that overlooks the racetrack already has been a big hit, Finamore said.

“We’re not ready to give up on trying to promote (racing and slots together),” Finamore said. “A lot of racing customers want nothing to do with slots, but if a facility isn’t truly integrated, it makes it harder. There’s no question horse racing will prosper and derive great benefit from this facility.”

The Mid-Atlantic Racing Form and Pennsylvania Gaming Congress is organized and produced by the Spectrum Gaming Group, which offers research and professional services to the gaming industry.