Tom LaMarra<br>News Editor

Tom LaMarra
News Editor

Lee Thomas

Commentary: Take Route 2

<i>By Tom LaMarra</i> - Gaming has kept racetracks open, put money in horsemens pockets, and encouraged breed development. Whether it has done anything to spark long-term interest in horse racing is dubious at best.

"It’s about the jobs.” That was the rallying cry for the successful bid by Mountaineer Race Track & Gaming Resort to get voters in Hancock County, W.Va., to approve table games, which will be added to thousands of video lottery terminals and create a full-­service casino.

It’s easy to be cynical when companies push for expanded gambling given the potential financial rewards. But drive along Route 2 from Weirton to Chester in the state’s northern panhandle and you can clearly see why Mountaineer is so important to a county with an unemployment rate of 7%.

The campaign was believable.

Sometime this summer, Kentucky residents probably will begin hearing a lot about expanded gambling in the gubernatorial race. Republican incumbent Gov. Ernie Fletcher opposes it; Democratic challenger Steve Beshear supports it. Where the public stands won’t be known until a constitutional amendment appears on the ballot, perhaps next year.

In Kentucky, gaming supporters claim it’s about hundreds of millions of dollars in tax revenue being lost to casinos in neighboring Indiana and Illinois. The horse industry, meanwhile, says it’s losing ground to other states with gaming-­supported programs.

Gaming in West Virginia and other states has kept racetracks open, put money in horsemen’s pockets, and encouraged breed development. Whether it has done anything to spark long-term interest in and stability for horse racing is dubious at best.

Look around. Despite a much-improved racing product, crowds of fewer than 200 aren’t uncommon on the racing side at many racinos. At Philadelphia Park Casino & Racetrack, on-track handle is down in the double digits only six months after slots were added. At Delaware Park, $240,000 a day in purses can only buy 6.7 horses per race. Harness tracks crow about a rebirth of the sport, but live pari-mutuel handle at some facilities contributes less than 10% to the purse account. If that’s not scary, nothing is.

Kentucky dubs itself the “Horse Capital of the World,” and it’s worthy of the title in many respects. But there also is a cloud of arrogance—real or perceived—hovering over the horse industry, particularly in Central Kentucky. The cloud needs to blow away before the public can believe the industry needs help.

Administratively, the Kentucky Horse Racing Authority is under-funded. The Livestock Disease Diagnostic Center needs financial assistance. There is no statewide marketing or promotional plan for the horse industry or horse racing. And racing industry practices may be impacting revenue on the pari-mutuel side.

For most of the year, Mondays and Tuesdays are dark days at simulcast facilities in Kentucky. In some markets, nighttime Thoroughbred simulcasts are limited or nonexistent. On July 2, only one track in the state, Ellis Park, was open on a day when Hollywood Park had a record $10-million pick six pool.

Ironically, Louisville-area horseplayers who like to play on track rather than through wagering accounts gave their pick six revenue to Indiana at an off-track betting parlor located across the Ohio River.

Eventually, some Kentucky legislators are going to ask, “What have you done to help yourself lately?”

Last year’s failed racetrack gaming legislation provided some evidence Kentucky likes the status quo in that it closely resembled legislation in other states—a percentage for purses, a percentage for breed development, and a little for backstretch and gambling addiction programs.

In 2006, the Kentucky Equine Education Project’s “Keep It In Kentucky” plan estimated gaming would produce $150 million a year for purses and $33 million for breed development. Based on gross revenue of $1.25 billion a year, racetracks, which would have to build casinos, would get about $600 million.

If each segment gave up only 2.5%, the industry would have about $19 million in funding for things like the KHRA, LDDC, equine drug testing and research, a statewide marketing program, insurance and benevolence programs, and capital and technological improvements to enhance the pari-mutuel experience and seriously attempt to do something meaningful with the relationship between racing and gaming. Don’t ask the state to pay for it.

Expanded gambling is public policy, but if the racing industry is the vehicle for gaming, it should put its money where its mouth is.

KEEP should rent a bus and organize a field trip for board members, horsemen's representatives, racetrack executives, and legislators to Mountaineer one weekend. Take Route 2. Tour the joint. Talk to management, horsemen, and employees to find out what works and what doesn’t work. Get some first-hand experience.

Win or lose, make it believable.