Greyhound 'Cessation' Bill Sends a Warning

The following appears in a 10-page bill that has been introduced in the West Virginia legislature.

“The legislature finds that legislative cutbacks in deposits to the Greyhound track purses and to the Greyhound Development Fund for workers’ compensation debt reduction, for balancing the West Virginia state budget, and for helping to safeguard the bond rating of the state of West Virginia in the 2000s were necessary and appropriate.

“The legislature finds that these cutbacks helped create a hardship on Greyhound breeding and ownership investors to produce a return on investment and recoup their investment. Accordingly, the legislature finds it is in the best interest of the state of West Virginia and the West Virginia Greyhound racing entities to cease Greyhound racing in West Virginia and to compensate the West Virginia Greyhound racing entities for the investment in West Virginia Greyhound racing.”

The bill, which creates the “West Virginia Greyhound Racing Cessation Program,” might as well say this: “We continued to reduce the amount of money we statutorily awarded you years ago as a means to open racetrack casinos, and those reductions have made it almost impossible for you to continue operating your business successfully. So in effect, we’ve killed your business.”

The legislation outlines a $37.5 million buyout that would go to those who own, breed, and race Greyhounds. It’s similar to a bill that became law in Iowa last year.

When racetrack video lottery terminals were legislated statewide and via local referendum, the law awarded 14% of VLT revenue for purses and breed development. That percentage is roughly half of that now for Greyhound and Thoroughbred racing.

The painful slide of pari-mutuel Greyhound racing in the United States is well-documented, and the industry itself is largely responsible.

Though it was ahead of the horse racing industry when it came to welfare, adoption, and re-homing programs for dogs, the backlash from targeted efforts by animal-rights groups to destroy it was too much to overcome. At many racetracks, particularly those with casinos, promotion of Greyhound racing was minimal or non-existent. Little was done to grow the pari-mutuel side of the business.

If you visited Wheeling Island Hotel, Casino & Racetrack three or four years ago, you would have seen a remodeled apron just off the first floor simulcast area. On a nice day it wouldn’t be unusual to see good crowds outside watching the races.

If you went last year, you would have found a deserted apron, because management closed the first floor, moved all simulcast wagering to the third floor, and made it a nuisance for patrons to visit the apron.

Sound familiar?

A legislature-commissioned study of the West Virginia Greyhound industry detailed how live handle has plummeted yet export handle for the state’s two dog tracks has grown given the closure of other dog tracks around the country, and notes that 95% of purses come from the statutory share of VLT revenue.

Sound familiar?

The Spectrum Gaming study also sheds light on the racetrack casinos’ position.

“Nonetheless, Wheeling Island executives told us that Greyhound racing offers their customers another gaming option, and, although the crossover is limited, they believe it is important to continue to offer it,” the Spectrum study says. “However, they added that if they could eliminate the $10 million to $11 million annual subsidy payment (for purses), they would take a different position on whether to offer Greyhound racing. They acknowledged that Greyhound racing is close to a break-even proposition for them.”

And this:

“Casino management at Mardi Gras and Wheeling Island both told Spectrum that their support of a buyout plan would depend on whether the subsidy money they currently pay would go to state government,” the study says. “Such a plan would make no sense, they argued, as it would eliminate an amenity they currently offer to gaming customers without a financial benefit to them. However, if the casino operators were allowed to retain the subsidy money they currently have to pay (to purses), their positions would change from opposition to support.”

Whether you like or dislike Greyhound racing, or even care about it, isn’t the issue here. But if you’re a stakeholder in the horse racing industry—anywhere—you should care about this bill, its language, and the comments in the study. And you don’t have to read between the lines to figure out why.

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