The state rewards programs in the Southwest are getting as hot as the summer weather in the bayous of Louisiana and as spicy as the food served in New Mexico. The addition of expanded gaming has revved up the breeding and racing programs in those states and is changing the landscape of the Thoroughbred industry in that region. "Louisiana has a very rosy program right now," said Tom Early, executive secretary of the Louisiana Thoroughbred Breeders' Association. "As long as those slot machines keep generating money, Louisiana is a wonderful state to breed and race in." For the first six months of the year, slot revenue in Louisiana has generated $19.8 million for purses. By law, 15% of the adjusted gross revenue from slot machines is designated toward purses, and 2% is given to the LTBA to pay breeder rewards. Currently, Delta Downs, Louisiana Downs, and Evangeline Downs have slot machines. Fair Grounds should have slot machines online by 2005. Last year, the LTBA awarded $11,454,020 in bonus award money to owners, breeders, and stallion owners, compared with $5,264,421 in 2001 and $8,537,513 in 2002. Breeder awards are paid at the rate of 20% of the winner's share of the purse to runners finishing in the top three at any track in the state or in a stakes race outside the state. Horses finishing in the top three in non-stakes races outside the state participate in a $400,000 fund set up to pay breeder awards for those horses. The new fund was established in 2003. The awards were paid at a rate of 14.95% of the winner's share of the purse. Stallion awards are paid on allowance, handicap, or stakes races in the state and stakes races outside the state. The awards are paid on a pro-rated basis, based on a total of $500,000 that is distributed annually. In addition to handing out hefty breeder rewards, the Louisiana program also spotlights the best state-breds on three separate occasions: the Louisiana Breeders' Festival of Racing at Louisiana Downs with purses for eight races totaling $500,000; Louisiana Premier day at Delta Downs with purses for 10 races totaling $1 million; and the $1-million Louisiana Champions day at Fair Grounds, which features 10 races. Evangeline Downs is the only track not to offer a state-bred championship day. "It's always been my dream to offer four state-bred days," Early said. "One day I would like to see four $1-million state-bred days. I would also like to see a point system created where the horses earning the most points throughout the year would receive some kind of reward." In 2003, Louisiana had about 200 stallions with an average book of 13.3 mares, up from 11.1 in 2002 and 10.8 in 2000, according to The Jockey Club. Other statistics show that the number of mares bred last year was 2,608, up from 2,268 in 2002. The foal crop also continues to rise. It topped 2,500 in the mid-1980s, steadily fell through the 1990s, but rose from 1,396 in 2001 to 1,419 in 2002. "Stallions like Afternoon Deelites, Kipper Kelly, and Keats are moving here," Early said. "Stallions that were major runners are relocating down here and in turn the mares are following." The increased breeders programs are doing more than reward breeders on the track. They are also being rewarded when Louisiana-breds enter the auction market. A ridgling son of Tejano Run topped the 2004 Fasig-Tipton Texas yearling sale with a final bid of $130,000. Jimmy and Kathy Davis of Oklahoma purchased the ridgling on behalf of Jack Sweesy of Dallas. Terry Gabriel consigned the ridgling to the sale. Gabriel had privately purchased the ridgling from his breeder, Folsom, La., resident Paul Sita. "We're hoping that the positive effects of the breeders programs are reflected in the sale results from the (Louisiana Breeders Sales Co.) sale in Shreveport," Early said. "We would like to see the average jump, but the trick is getting out-of-state buyers here for the sale." Thanks in part to a healthy breeders program fueled by expanded gaming, New Mexico has seen an upswing in the prices paid for state-breds at auction. Tyger Norway, a yearling colt from the first crop of Storm Cat stallion Norway, took the New Mexico market to new heights this year when he brought $127,000 to top the Ruidoso mixed sale. The price was a state record for a Thoroughbred yearling sold at public auction, according to the Ruidoso Select Sales Co., which conducted the auction. Stan Fulton, who operates Sunland Park Race Track and Casino, purchased Tyger Norway, who was consigned by R. Doug Mills of Pampa, Texas. According to The Jockey Club, New Mexico represented 2.1% of the North American foal crop in 2002, producing 658 registered foals. As of Aug. 1, a reported 156 stallions bred 1,492 mares for an average book of 9.6 mares last year. "The program is growing and continuing to do well," said Anna Faye Davis, executive director of the New Mexico Horse Breeders' Association. "I think a lot of people are anticipating the opening of Zia Park, which is bringing more people into the industry." Zia Park, owned by a partnership group headed by Ruidoso Downs owner R.D. Hubbard, is scheduled to open a slot machine parlor as early as November, with live racing planned for the fall of 2005. The track will be located in Hobbs, N.M., which is near the New Mexico/Texas state line. New Mexico awards owners whose runners finish in the top three in any race within the state. Breeders and stallion owners receive money for any horse that finishes first in any race within the state. The amount of money awarded is based on the class of the race, with trials, futurities, allowances, handicaps, or stakes races receiving the highest amount of bonus funds. Maidens receive the lowest amount. In New Mexico, 20% of the net take from slot machines at the racetracks is designated to purses. Of that 20%, the New Mexico Horsemen's Association (NMHA) distributes 80.7% to the existing purse structure. The remaining 19.3% is distributed to the NMHA gaming purse fund. That fund is divided evenly among the incentive awards fund, New Mexico stakes fund (breakage), and the overnight purse fund. The New Mexico stakes fund and overnight purse fund are distributed back to the racetrack where the funds were generated. While Louisiana and New Mexico flourish, Texas and Oklahoma are caught in between. The issue of expanded gaming at three of the state's four racetracks will be put to a statewide vote in November in Oklahoma, while the issue has been floated around Texas with little to no result. If Oklahoma voters approve the issue Nov. 2, Remington Park could see 750 machines, with purses expected to average between $200,000 to $300,000 per day. "It's basically life or death for horse racing as we know it in Oklahoma," said Joe Lucas, president of the Oklahoma Horsemen's Benevolent and Protective Association. "There is no way the Thoroughbreds will stay in Oklahoma without gaming, especially when there are so many other alternatives. This would put the Oklahoma Thoroughbred industry competitive with other states." The gaming issue was discussed during a special session of the Texas state legislature, but the session ended without a vote. The Texas legislature is scheduled to reconvene Jan. 11. "Our numbers the last three years have slid a bit," said Dave Hooper, executive director of the Texas Thoroughbred Association. "The business at the tracks decreased due to increased competition from New Mexico and Louisiana, who have slot revenue to increase purses." The Jockey Club reported that 381 stallions bred 3,166 mares in Texas in 2003, compared to 438 stallions breeding 3,640 mares in 2001. Texas represented 5.8% of the North American foal crop in 2002, with 1,864 live foals. "There have been quite a few stallions and mares relocating to New Mexico and Louisiana because there is more money available," Hooper said. "If legislation were passed in Texas legalizing slot machines, the Texas program would be like a space shuttle taking off. Texas could offer purses comparable to those in New York, Louisiana, and Kentucky. That could have a tremendous effect on the breeding program. The growth would be exponential." Texas did away with its breed-back requirement with the introduction of a new owner bonus award, which was created as a way to encourage racing in open company. Owners of Texas-bred horses finishing in the top three against open company receive an additional award over and above the regular 40% paid to owner awards on these races. These awards come from a deduction of the available awards fund for a meet. In 2002, the amount equaled an additional 10% of the winner's share of the purse, increasing annually by 2.5% to a maximum of 25% in 2008. Pete Spanos and Amy Whitfield contributed to this story.