Indiana Racetracks to Split Casino Subsidy Equally

by James Platz

The Indiana Horse Racing Commission sided with Indiana Downs Sept. 26 when it voted 4-1 to split riverboat casino admission tax revenue 50/50 with Churchill Downs Inc.-owned Hoosier Park. The move guarantees $5.4 million a year to Indiana Downs indefinitely.

During an Aug. 20 commission meeting, Indiana Downs' petition for an Indianapolis off-track betting parlor was denied, but several commissioners said a rule change was necessary. They followed through on their intentions Sept. 26 by adopting rules that call for an equal split of the subsidy in 2004 and beyond.

"We have two tracks," commissioner Alan Armstrong said. "I want two tracks to succeed and survive."

This year, the subsidy is being split 50/50 between the two tracks. The formula for distribution in 2004 had called for half the subsidy to be divided equally, and the other half divvied up based on purse money generated. Without an Indianapolis OTB facility, and the Kentucky simulcast signal being withheld from its Evansville OTB parlor, Indiana Downs said it could not compete with Hoosier Park for the other half of the subsidy.

"It's not a level playing field," commissioner Pete Beck said. "It probably never will be. But 50/50 is the only way this should be distributed."

Hoosier Park officials argued that without a purses-generated formula, mediocre racing would plague the state.

"I now understand what horse racing in this state is about," said John Long, chief operating officer for Churchill Downs Inc. "It's not about competition. It's about mediocrity."

The new rules reinstate a framework that originated in October 2001. The racing commission changed the allocation rules in 2002 after Indiana Downs submitted projections that said it would equal Hoosier Park in handle and purses generated. Soft business led Indiana Downs to fall short of projections.

"In that context, a purses-generated model makes all the sense in the world," commission executive director Joe Gorajec said. "The reality is that Indiana Downs has failed, and failed substantially. What the expectations were just hasn't materialized. No matter the outcome, there are no winners."