McAlpine, Landsburg Bring Opposing Views to ARCI

After listening to Magna Entertainment president Jim McAlpine and California Horse Racing Board member Alan Landsburg speak about racing's future Friday, executives gathered for the Association of Racing Commissioners International conference must have wondered if the two industry leaders were talking about the same sport.

McAlpine told the group, meeting at the Seattle Grand Hyatt Hotel for its annual conference, that regulators need to come together as a group on issues to open horse racing up to "make it what it could be, the No. 1 entertainment industry, bar none."

In the panel discussion, Landsburg argued that it is time for racing to stop the "money funnel" spiral before it chases off all of its remaining fans and the sport is played out on "a two-dimensional television screen in an empty arena."

Clearly troubled by the problem of regulation, McAlpine noted that Magna now owns tracks in 13 jurisdictions and yet was forced to go through the regulatory process each time it applied to take over a license, a process that took several months each time. He listed 15 or so major issues where separate state jurisdictions take precedence.

"There are too many people involved in this business and we've got to get these groups working together," McAlpine said. "If not, the casinos are going to manuever right around us."

Going toe-to-toe with rebaters and signal pirates, expanding Internet and television opportunities, bringing the product to customers where they are rather than hoping they come to racing, and pursuing the international market could make horse racing a $100 billion dollar-a-year industry, he said. None of that is possible, though, with so many regulators.

"We're making this game really difficult," McAlpine said. "Our customers say they don't want to play by your rules anymore. We've got to find them and go get them."

Magna's philosophy, he said, is that horseracing can be a leader in gaming, sports and family entertainment. The proliferation of slot machines at tracks, he said, has changed things.

"There's a new reality," McAlpine said. "Companies that weren't even around or were on death's door 10 years ago are now big players in this country."

Landsburg contends racing "is drowning in electronics" and continues to suffer across the country even as it churns more dollars. He believes the sport's beauty, personality and stars are being sacrificed.

"Our racing arenas are mostly empty caverns," said the longtime Hollywood producer and horseman. "We've invested our future in two-dimensional TV screens."

He warned that the industry is moving ever closer to "virtual racing" where the sport serves as a "profit center for digitalized recreations."

Landsburg and McAlpine spoke as part of a panel on regulating the pari-mutuel industry.

Charlie Gardiner III, executive director of the Louisiana State Racing Commission, spoke of the positive effect slot machines have had at tracks such as Delta Downs, where purses have increased in four months from $35,000 a day to $173,000. But the success has a price, he said.

"Gaming companies are not your grandfather's racetrack owners," Gardiner said. "They have very little racing experience, but they are very well heeled and very well funded.

"If you walk into Delta Downs, you will see banks and banks of slot machines in the 15,000 square feet (where they are allowed), but you would not know you are at a racetrack."

Racinos were a hot topic. Dr. Richard Thalheimer, of the University of Louisville, described the economic benefits experienced by racino states and the overwhelming influence slot machines have had on the Thoroughbred industry at tracks such as Mountaineer in West Virginia, where revenue has jumped from $3.2 million to $206 million since 1991.

Thalheimer noted, though, that his study showed that while "horse players played VLTs, new VLT players did not play horses.

"I don't know why you are looking for other customers," he told the commissioners. "These are your customers."