High-Stakes Games - By Eric Mitchell

(Originally published in the July 31, 2010 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.

By Eric Mitchell

By Eric MitchellMonmouth Park’s great experiment may all be for naught. The Jersey Shore racetrack was told last year it needed to do something bold to prove that Thoroughbred racing has a future in the Garden State. It rolled out a 50-day meet with $50 million in purses. The meet has been a rousing success as far as attendance, field size, and handle goes. But before Monmouth can complete its experiment, a state advisory committee July 21 recommended that the state get out of the racing business altogether. Sell Meadowlands. Sell Monmouth Park.

No one has to dig too far into Monmouth’s numbers to realize the handle figures aren’t high enough for the track to support a 50-day, $50 million meet on its own. The state is surrounded by racinos, so continued success still depends on a share of the Atlantic City gaming revenue.

Why support an industry that cannot sustain itself? Because wherever this debate occurs, it’s important to see that the racetrack is only part of the equation. State Sen. Jennifer Beck, R-Monmouth, points this out in a recent editorial.

“The report wrongfully dismisses horse racing as less important to the state than casino gaming, when in fact this $4 billion industry brings in a proportional share of revenue, as well as supplying 13,000 jobs and protecting approximately 200,000 acres of open space,” Beck wrote in a piece that appeared in the Asbury Park Press.

It’s about jobs. It’s about highest and best land use and quality of life.

Even if Monmouth Park is sold to a private company, what is that racetrack worth without the prospects of alternative gaming? Quick, name the companies that have been the most active in acquiring racetracks over the past four years. Answer: Harrah’s and Penn National Gaming Corp. Would a private owner have the leverage to get Atlantic City to continue paying a $20 million gaming subsidy? Not like the kind of leverage Trenton wields. So if the state wants the tracks in private hands, then give those hands the tools to compete. Not only in the gaming market in New Jersey, but in the entire region. Beck supports putting a casino at Meadowlands and makes this important point: racing and casino gaming can no longer be treated as separate entities. “As long as we continue to ignore this trend and refuse to look at gaming from a statewide point of view, we will continue to lose gaming dollars to other states,” she wrote. The good news is that this battle has only begun. The state General Assembly must approve any plan, so let the bargaining begin.

Farther west in Kentucky, the state’s signature industry was thrown a ring buoy in the form of Instant Racing, a video lottery-type machine that uses the outcome of historical Thoroughbred races to generate the number combinations a player wagers on. It’s meager relief from the once-mythical and now very real armada of riverboat casinos on the Ohio River and in easy driving distance from Lexington, not to mention the racinos in numerous other states. The armada has battered Kentucky’s supremacy as the epicenter of the Thoroughbred industry and brought segments of the once-proud industry to its knees. Instant Racing might not be the answer—indeed it might be akin to putting a bandage on a gushing artery—but the Kentucky Racing Commission should be lauded for its July 20 approval of the game.

Recent events in Kentucky underscore that any relief cannot come soon enough. Keeneland, which for years had among the highest daily purse distribution in the country, has slashed fall purses by $1 million. And Turfway Park, which has one of the country’s largest riverboat casinos located just minutes away, gutted its fall stakes program and eliminated the Kentucky Cup races. Meanwhile, Churchill Downs officials have coyly suggested the future of racing in Louisville is no guarantee.

Instant Racing’s success is unproven in a “mature gaming” market, meaning people may not want to play it much when they have a lot of other choices. Kentucky racing executives anticipate it will generate only modest revenue. Slot machines or VLTs have more proven success. Yet even the modest relief offered by Instant Racing must clear the courts and the legislature, with its myriad of opponents weighing in, by the end of the year for it to be most effective. Remember that Ohio has already approved a land-based casino for Cincinnati. Time is not on our side—for Kentucky or for New Jersey.

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