A Bad Break - by Eric Mitchell

Make no mistake about it—the movement to decouple pari-mutuel licenses from electronic gaming is a bad deal for racing.

Efforts to weaken or even break this connection are now being debated by Florida and West Virginia legislatures (see page 14 of the Feb. 20 Blood-Horse). While both these situations are very fluid, the concern is that any movement toward reducing the requirement to conduct live racing in order to operate slot machines is going to harm horse racing and eventually the farms and training centers that support it.

In Florida, the bill being debated as part of a compact with the Seminole tribe does include provisions for continuing to fund breeders' awards and stallion awards from pari-mutuel handle. There are also a couple of provisions that require slot operators not conducting a live pari-mutuel event to pay into a purse pool for Thoroughbred races. One provision would allow Gulfstream Park West (formerly Calder Casino & Race Course) to operate its casino without having to offer live racing, but this casino would have to withhold 2% of its net revenue for Thoroughbred purses.

Also included is a provision allowing an additional license for a "slot machine facility" in Miami-Dade County and in Palm Beach County. Only licensed pari-mutuel operators are eligible to receive these licenses and will be required to set aside 1% of net revenue from slot machines and video race machines (historical racing) for Thoroughbred purses at tracks not authorized to operate slot machines, which means Tampa Bay Downs.

Just as in the early days of racinos, the first steps—at least for now in Florida—don't look so bad because money is being committed to purses and breeders' incentives. But the door will have been opened for a licensed pari-mutuel facility to operate slot machines without having to conduct a live racing event. Such a precedent is likely to haunt racing in the not-so-distant future. Helping keep the assault at bay are the owners of Gulfstream Park, Tampa Bay Downs, and Hialeah Park, all people with a personal commitment to horse racing. If these properties change hands, however, and a corporation takes over, the racing industry better brace itself for changes.

How worthwhile is it to casino companies to jettison the cost of running a pari-mutuel event? In 2014, casino companies in Iowa agreed to pay the greyhound industry $92 million in subsidies to stop racing.

The outlook for horse racing is more dire in West Virginia, where gaming companies own both Thoroughbred tracks. The West Virginia bill as written would no longer require live racing at Hollywood Casino at Charles Town or Mountaineer Casino, Racetrack & Resort but still allow these facilities to operate their casinos.

If casinos are allowed to opt out of live racing, it won't just be racing that suffer. One of the reasons the racing industry made its deal with the devil on racinos back in 1990 was to protect and preserve the vast agricultural industry that supports it. At risk are millions of acres of green space and tens of thousands of jobs. The political fight may be different, but that goal is every bit as important now as it was back then.

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