Philly Horsemen: Purse Revenue Must Be Protected

by Linda Dougherty and Tom LaMarra

Live racing at Philadelphia Park could be suspended Jan. 1, 2003 if management and horsemen are unable to come to terms on a new live racing agreement, which expires at the end of December. Horsemen are particularly concerned over language in the contract that protects their share of purse revenue.

With slot machine legislation looming on the horizon, the Pennsylvania Thoroughbred Horsemen's Association wants to sign a one-year deal with Greenwood Racing that includes construction of a training track. Greenwood wants horsemen to sign a multi-year agreement in order for the track to be built, and also wants the PTHA to make a commitment it will help "maximize revenues" for it as part of any new deal.

"The horsemen have thrown their support behind Chester Downs (a Standardbred track proposed for Chester County), and they've also proposed their own racetrack, which is in direct competition with our application for the Thoroughbred license to build Seaport Park (in Chester County)," Philly Park chief executive officer Hal Handel said.

In a Dec. 23 letter to Mike Ballezzi, executive director of the PTHA, Handel writes: "The actions of the PTHA with respect to support for Chester Downs, and advocacy of a Thoroughbred license applicant designed to compete with Philadelphia Park, constitute conduct leading us to conclude that our economic well-being and legal standing require that PTHA make a similar covenant to protect our economic well-being in order for us to agree to continuing to covenant with PTHA to maximize revenues."

Ballezzi said the current live racing agreement calls for the racing association to maximize fees, receipts, and revenue from live racing, simulcasting, and account wagering. He said the PTHA is concerned about Greenwood's account wagering operation that has its hub in Oregon. (Greenwood continues to operate PhoneBet in Pennsylvania.)

For the third quarter of 2002, handled $33.9 million. Horsemen are concerned they won't get their fair share of revenue from hubs located in other jurisdictions if the live racing agreement is altered.

"My concern is they want us to take that language out of our live racing agreement," Ballezzi said. "Without that language, they can run this hub and not pay our purse money. There is no way we can remove that language if we expect to survive in the next three to five years."

On the subject of Seaport Park, Ballezzi said horsemen believe the plan is not acceptable because the facility would have a five-eighths-mile track, no turf course, and no barn area. In addition, Seaport would race June through August using dates that normally would be run at Philly Park, Ballezzi said

"We would have no turf racing in eastern Pennsylvania--that's unacceptable," Ballezzi said. "And why should we give up mile-track handle?"

Ballezzi suggested that, rather than move 50 days of racing from Philly to Seaport, Greenwood should maintain the Philly summer schedule and race 50 additional programs at night at Seaport on Philly's dark days of Wednesday, Thursday, and Friday.

He also said the PTHA supports the Chester Downs project because the principals already have a live racing agreement in place, and have agreed to a fair split of any gaming revenue should racetrack slot machines be legalized.

Should the two sides be unable to come to terms on a new live racing agreement, Handel has advised the PTHA the racetrack will be closed for racing and training as of Jan. 1, 2003; that the backstretch must be vacated and all horses and property removed by 5 p.m. Jan. 6, 2003, and any horses shipped to race elsewhere between Jan. 1 and Jan. 6 will not be allowed to return to the stable area.

Benjamin Nolt, executive director of the Pennsylvania State Racing Commission, sent a letter requesting that Greenwood accept entries Dec. 27 for the program of Jan. 1, which Greenwood has agreed to do.

"I am not amenable at this point to an interim extension of our current agreement pending further negotiation," Handel said in the letter.

Ballezzi said the PTHA had expressed a willingness to continue racing during negotiations.