Saturday, January 16, 1999

Turfway sold for $37M

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Keeneland, Harrah's buying track

BY PATRICK CROWLEY and JANE PRENDERGAST
The Cincinnati Enquirer

Jerry Carroll at Turfway Park Friday. (Yoni Pozner photo) | ZOOM |

        FLORENCE — Turfway Park, which Jerry Carroll took from a beaten-down horse track to a showcase for thoroughbred racing, is being sold for $37 million.

        The buyers are three equal yet unlikely partners who offer interesting possibilities for the future of a track that in several incarnations and two locations has operatrf in Northern Kentucky for more than a century.

        Purchasing the track in a deal announced Friday are:

        • Keeneland, the venerable Lexington race track that is known as a gathering spot for central Kentucky's blueblood social set.

        • GTECH Corp., an operator of state lotteries, including Ken tucky's, and provider of on-line lottery games, investing through its Florida-based Dreamport Inc. subsidiary.

        • Harrah's Entertainment, a Memphis-based operator of casinos in the United States and Australia, buying in through its Dusty Inc. subsidiary.

        Mr. Carroll, 54, of Fort Mitchell, bought the track in 1986 for $13.5 million. Over the years, he invested $30 million in the track, including $5 million on a high-tech race book where races from across the country are simulcast daily at Turfway.

        He also attracted some of racing's top horses and breeders with larger purses, started high-stakes races like the Jim Beam Stakes — which this year is changing to the Gallery Furniture.com Stakes — and the Kentucky Cup.

        The sale gives Mr. Carroll and the track's other majority owner, Nashville businessman John Lindahl, more time to concentrate on their other venture, building a $150 million auto speedway near Sparta, Ky., in Gallatin County.

        “It's been a great run and I'm proud of what we've done here with Turfway,” Mr. Carroll said Friday. “But with everything I've ever bought and operated, the idea is to build value and make money. That's what we've done with Turfway.”

The buyers: William Greely, CEO of Keeneland; Larry Bunch of Harrah's, and Robert Vincent of Dreamport Inc. (AP photo) | ZOOM |

        The Turfway deal, in the works since June, is contingent on financing and approval of the Kentucky Racing Commission, but is expected to close by the end of March, said William Greely, president and chief executive officer of Keeneland Association.

        Keeneland, a historic and genteel Lexington institution known around the world, will operate the track. But Harrah's and GTECH are equal partners.

        The purchase gives Keeneland, which now runs only in April and October, many more racing dates. It's an aggressive business move for a park that for years was known for focusing more on selling horses and offering fewer, but high-quality, meets.

        There is symbolic significance, too, in tying together two very different parks. Keeneland, opened in 1936, is in the heart of the Bluegrass and known for ivy-covered walls, better-dressed bettors and white parasols. Its slogan: “Racing as it was meant to be.”

        “Keeneland is a different atmosphere than Turfway or (Louisville's) Churchill Downs,” said Florence attorney Burr Travis, a thoroughbred-horse breeder and owner. “It's a social climate there as much as a racing climate. Turfway doesn't have that social atmosphere, and maybe Keeneland will bring that kind of atmosphere here.”

INFOGRAPHIC

Turfway timeline

        Turfway has a rich history, too, dating to 1883, when its predecessor, “Old Latonia,” opened in Covington and moved to Florence in the early 1960s. It attracts more average Joes, many looking for simulcasting over live racing.

        Bernie Hettel, executive director and chief steward of the Kentucky Racing Commission, said the sale offers interesting possibilities.

        “Keeneland is the best race track, bar none,” he said. “Harrah's has a standard of excellence, in a different business. I'm sure GTECH does too.”

        The threesome could be particularly positioned, he said, to deal with what he said was the horseracing industry's only opportunity for growth — using new technology to send racing directly into people's homes.

        Executives from Harrah's and GTECH would say little about specific plans. But they do plan to utiliize their expertise and products to enhance and improve racing at Turfway.

        “For thoroughbred racing to continue to grow and prosper, it must make use of the significant marketing and technological innovations that have been suc cessful in the broader gaming and entertainment market,” Mr. Greely said.

        Billions are being gambled just a few miles from Turfway at two riverboat casinos in southeastern Indiana.

        None of the new owners would address the possibility of lobbying the Kentucky General Assembly to allow video slot machines to operate at race tracks, something Mr. Carroll has tried repeatedly.

        It was Keeneland that used its influence to help kill the efforts by Mr. Carroll and others, including Churchill Downs, to win legislative approval for video slots.

        But Dreamport, the GTECH subsidiary, is part owner of Suffolk Downs near Boston and makes video slots, online lottery games and other gaming devices.

        Harrah's is one of the world's largest casino operators.

        Harrah's plans to install a system to track customers' wagering and then reward the bigger spenders with free or reduced meals and hotel rooms — a program used by casinos to reward and attract so-called “high-roller” bettors.

        The relationship between Harrah's and Turfway dates to at least 1993, when they became partners in hopes that the Kentucky General Assembly would legalize casino gambling.

        That ended last year with Harrah's calling in a $25 million loan it had made to Turfway. A judge ordered Turfway to give Harrah's 50 acres of land near the track and control of a third of Turfway's stock.

        Mr. Carroll said the 50 acres satisfied about $9 million of the debt. The rest will be retired through the sale.

        Turfway is one of Northern Kentucky's largest employers, taking on more than 500 people during its racing seasons. The full-time management staff of 80 or so will remain with the track.

        President Mark Simendinger of Edgewood, the only other owner of the track with a 4 percent stake, will probably leave the track but will stay with Mr. Carroll's properties.

        Mr. Carroll sold all the assets of Turfway and its 200 acres with the exception of some frontage along Turfway Road, which he still plans to develop, and a building he owns that houses the Regal Theater, which is in Turfway's parking lot.

        Turfway's 24 percent stake in Kentucky Downs on the Tennessee border in Franklin, Ky., is part of the sale. It will first be offered to the existing owners of the track, which includes Churchill Downs, and then to the partnership buying Turfway.

        Patrons at the track Friday seemed pleased with the sale.

        “If they could make (Turfway) more like Keeneland, that would be all right,” said Pat Donahue, 27, of Florence.

        But forget the slots, said Bob Dearth, 46, of Anderson Township.

        “That just ruins the atmosphere at a race track,” he said. “They don't need 'em here.”

Keeneland brings Turfway prestige, historian says
Turfway buyers are big in casinos, lotteries
Carroll has Midas touch with property

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