Racing Needs to Rethink Slots Revenue Strategy

It comes as no surprise that legislators around the country are looking at racing's share of gaming revenue to balance budgets.

The latest developments are in Pennsylvania, where breeders and horsemen have issued a call to action to protect the Race Horse Development Fund they say could be raided to support other programs in the state.

West Virginia has been through it, and so has Delaware. The list probably will continue to grow.

Horse-related organizations in various states are realizing the importance of educating lawmakers and the public on the benefits of such programs--jobs, boosting agriculture, and preserving open space. One thing tracks and horsemen haven't been able to do in gaming states, however, is use revenue others don't have to market the pari-mutuel aspects of horse racing.

For too long, slots revenue has been allowed to mask the fact handle is heading south. If that was a problem before slots, it's worse now. There's more public scrutiny. 

It might be easier to protect gaming subsidies if it can be documented efforts are being made to spur growth in the core product, which is pari-mutuel wagering. Instead, we see very little put into racing marketing and public relations, and lots of, "We tried that, but it doesn't work."

If you say it doesn't work, that simply provides more ammunition for money-hungry legislators to say, "Why the heck are we doing this?"

No one told horse racing groups they had to spend all their slots money on purses and breeding programs. But that's what has occurred, and now we have a competition over who has the highest purses rather than a thoughtful approach that looks at the big picture. Capital improvements and racing-related marketing have suffered.

Would you trade $2,000 of an inflated purse for $25,000 a day more in pari-mutuel handle? It wouldn't take a whole lot of cash to hire a few people to focus on that aspect of the business. And a track with slots really shouldn't cry poor given the privilege it has been awarded.

It's pretty sad. Many racino tracks, particularly those on the East Coast, are providing incomplete past-performance information in simulcast programs because it's "cheaper." You'd think tracks with gaming revenue would have the best PP program information for the most reasonable price. After all, they own the data.

Maybe the horsemen can cough up one-hundredth of 1% of slots revenue to provide quality simulcast programs that encourage wagering.

It's funny. As horrendous as the situation in Ohio could become--currently there is no provision for revenue from video lottery terminals to go purses and breed development--there could be a silver lining. The percentage may be so low horsemen and breeders wouldn't have to worry about anyone taking it away.

Slots can work for racing, but racing needs to seriously look at how it uses the money.





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