by Frank Angst

The Kentucky circuit faces a large summer gap after Ellis Park owner Ron Geary decided to close his Henderson, Kentucky, track, citing a disagreement with horsemen regarding the distribution of account wagering revenue.

Geary has no plans to reopen the 86-year-old Western Kentucky track affectionately known as the “pea patch.” The meet, which Geary had already characterized as make-or-break before the dispute, was scheduled to begin Friday.

“It is shocking to think that the [Kentucky Horsemen’s Benevolent and Protective Association] would choose to close down Ellis Park rather than take advantage of the additional revenue already negotiated with the ADWs for 2008,” Geary said. “They know it and they don’t care. All the KHBPA is focused on is hurting the ADWs this year so they can negotiate a higher percentage next year. What they are doing is a scorched earth strategy with huge collateral damage to the Tri-State.”

With their negotiator, the Thoroughbred Horsemen’s Group, horsemen in Kentucky and several other states have pursued an increased share of ADW revenue. Similar to deals being sought in other states, Kentucky horsemen want 7% of account wagering revenue. Churchill Downs did not agree to this plan and the horsemen refused to allow the Louisville track to distribute its signal to account wagering outlets.

While Geary and the horsemen failed to reach an agreement on the ADW percentage, Geary does support their push for increased access. Ellis Park had negotiated broadcast deals with both of the country’s horse racing channels, Television Games Network and HorseRacing Television. Despite those agreements, Geary said Kentucky horsemen informed Ellis Park on June 26 that they would block the track’s signals to account wagering outlets.

On Tuesday, Geary filed for a restraining order with the federal court in Owensboro, Kentucky, to prevent the horsemen from blocking the racing signal. On Wednesday, the judge ruled against issuing a restraining order, clearing the way for the horsemen to block Ellis from participating with ADWs. Ellis had reached deals with ADWs that would have tripled Ellis’s ADW revenue compared to last year.

“They cut off their own nose to spite their face,” Geary said. “Ellis Park was at a critical point. Since I purchased the track, I have invested millions and lost millions getting her back to her old glory. We were set to open this Friday, the Fourth of July, and it was going to be a spectacular year. I love this track and I love horse racing. I am not, however, in the business to continue to spend millions of dollars per year keeping her going just to have the Kentucky HBPA pull the rug out from underneath us. It is a tragedy.”

The Kentucky HBPA suggested Geary was using the ADW dispute as an excuse to close the park and shifting blame to horsemen. In a letter to its members released Thursday morning, the Kentucky HBPA points out that Geary and Ellis are involved in a labor dispute with mutuel clerks. Also, the Kentucky HBPA said only about 300 horses currently are stabled at Ellis.

“It is hard to understand the logic behind the decision after all. The lost ADW revenue amounts to approximately $5,000 a day in purses,” the HBPA letter said. “If the daily purses at Ellis Park are estimated to be between $130,000 and $140,000 per day, why would Ron Geary decide to close down the racetrack based on a 3.8% loss in revenue?"

Kentucky horsemen plan to meet with the Kentucky Horse Racing Authority today in an effort to have the regulator intervene on behalf of horsemen and Ellis employees.

In March, Geary reported losing $2.2-million last year. At that time, he said the track needed a strong 2008 meeting to continue. He cited the increased competition from Indiana racetracks, which have been able to attract more horses with purses inflated by slot machine revenue. Kentucky has not approved expanded gaming at racetracks.

Ellis Park said the closure will affect hundreds of families and the region, as the track has an economic impact on the area of about $60-million annually. Ellis Park employed more than 500 workers during live racing and another 300 to 400 worked on the backstretch. In 2008, more than 1,000 horses were to be stabled at Ellis Park and more than 150,000 fans were expected this summer.

Ellis Park’s office will remain open for the next several weeks to handle refunds of pre-paid reservations and sponsorships. Meetings will take place immediately with all employees and vendors. Geary has not released information regarding the future use of the track and its property.