Pinhook of the Year

Trivia question: Which of the following racetracks sold for the most money in the last four years?

(a) Calder Race Course; (b) Delta Downs; (c) Gulfstream Park; (d) Santa Anita Park.

Another question: Which of the following racetracks sold for the least amount of money in the last four years?

(a) Calder Race Course; (b) Delta Downs; (c) Gulfstream Park; (d) Santa Anita Park.

If you answered (b) Delta Downs to both questions, you were right. Boyd Gaming, a publicly traded company, paid a total of $130.1 million in 2001 to acquire the 200-acre Delta Downs in Vinton, La., from a partnership of Shawn Scott and Jinho Cho, who bought the track in 1999 for just $10 million. That certainly qualifies Delta Downs as the pinhook of the year.

By comparison, Santa Anita sold for $119 million, Gulfstream Park for $87 million, and Calder for $86 million. The sellers didn't make any money on those deals.

Delta Downs may be best known as the track where the Jean Lafitte Futurity is run. Over the years, horses coming out of the Jean Lafitte have outrun their odds when they show up for early season 2-year-old races in Kentucky and elsewhere. Some may remember Delta Downs as the bullring where jockey Sylvester Carmouche was said to have hidden his mount in a bank of fog near the top of the stretch while his opponents were circling the oval. When the field approached him, Carmouche burst out of the fog and romped to an apparent victory, only to be disqualified and suspended for his trickery.

What could possibly make Delta Downs worth more than Santa Anita, Gulfstream, or Calder? And what could fuel a 1,300% appreciation in value in two years?

The answer to those questions, obviously, is slot machines. In 1999, when Scott and Cho bought Delta Downs, the track had video poker machines, which by then were a poor stepsister in Louisiana's expanding casino gambling industry. In 1997, the state legislature paved the way for slots at Delta Downs, Louisiana Downs, and Evangeline Downs, but installation of the devices was contingent on passage of a local referendum. Voters in Calcasieu Parish, where Delta Downs is located, rejected slots by a 2-to-1 margin in 1997. That vote put the track on life support.

Casino riverboats in Lake Charles, La., about 20 miles east of Vinton, were attracting gamblers from the southwestern portion of the state and from Texas. Houston, the fourth-largest city in the country with a metropolitan population of more than four million, was just two hours away via Interstate 10. To get to the boats, Texans drove right past Delta Downs.

Scott, a Las Vegas businessman who owned truck stops and motels, enlisted local horsemen to support the slots referendum, which came up for a second vote in November of 1999, six months after he and Cho had bought the track. Horsemen went door to door, asking local citizens to support the measure. This time it passed--narrowly--getting 51% of the vote.

There have been red tape and delays since that vote, frustrating horsemen and the track's new owners. But Boyd Gaming cleared what looks like a final hurdle recently, and upwards of 1,700 of the machines will soon be in operation. Thoroughbred purses are expected to increase to $150,000 per day within a year--a 500% increase from early 2001. Legislation mandated that horsemen receive 15% of the net revenue from slots.

Soon, many of those cars with Texas license plates will be stopping at Delta Downs rather than driving on to the Lake Charles riverboats. That makes me wonder, though: If Texans ever realize how much money is leaving the state, and if racetracks there are permitted to have slot machines, how much will Delta Downs then be worth?