NEWS
Gaming boosts revenue, does not create racing fans, panel says
Posted: Tuesday, February 19, 2008 1:26 PM
by Ed DeRosa
Expanding gaming at racetracks has helped some operators stay in business, but several key racing executives have expressed concern that the subsidy from expanded gaming may disappear if the racing end of operations continues to lose money.
Revenue from expanded gaming helps fund capital improvements at racetracks and fatten purses from horsemen, but handle on racing has not increased and there is very little crossover between slots players and horseplayers.
Member representatives from the Thoroughbred Racing Associations and Harness Tracks of America discussed the racino dynamic on Tuesday in St. Petersburg, Florida, during the fifth annual joint meeting of the two groups.
“Slots have been tremendous for increasing purses, but haven’t done much for creating new fans,” said Chris McErlean, vice president of racing for Penn National Gaming Inc., which owns Thoroughbred racinos Charles Town Races, Penn National, and Zia Park. “Slots give racetracks the tools to expanding patronage. We need more people spending more money.”
“The lack of a live bettor doesn’t bother me because a better product attracts more betting dollars,” Delaware Representative Bill Oberle (R-Beechers Lot) said. “There’s not a lot of crossover with slots and racing, but we have taken revenue and invested it in the industry by creating jobs and developing facilities.”
As important as the off-track betting dollar is in today’s market, track executives from both breeds want to see on-track business increase.
Brock Milstein, chairman of Northfield Park, noted the trend in retail toward shopping versus specialized stores, and McErlean and Oberle both agreed that same model plays out in the racino model.
“We’re offering entertainment all under one roof,” McErlean said of Penn National’s complete renovation of its flagship facility in Central Pennsylvania with the arrival of slots this year and the possible further expansion of gaming in coming years. “We’re integrating the casino, simulcasting, and racing. That’s why we rebuilt the facility.”
Still, the bottom line at many of these facilities is that while expanded gaming has helped horsemen and operators make more money, racing itself costs more to operate than the revenue it generates.
“There are several tracks, and I own two of them, that wouldn’t be open without racinos,” said Jeff Gural, owner of Standardbred racinos Tioga Downs and Vernon Downs in New York. “We can’t always rely on this handout. Yonkers Raceway gets $30-million from slots, but they’re laying off teachers in Yonkers. Year-round racing doesn’t work. The more you race, the less you race for.”
“We want racing to be successful from a profit-loss standpoint, and that is difficult at some facilities,” McErlean said. “There’s too many racing dates. The major issue is that the horsemen do well, but the product available is not necessarily important. Slots sometimes create an insular community where the horsemen do well but the product hasn’t improved.”
Ed DeRosa is news editor of Thoroughbred Times
