Wednesday, July 21, 1999
Horse tracks bet on video lottery
VLTs seen as casino alternative
BY JANE PRENDERGAST
The Cincinnati Enquirer
FLORENCE — As Kentucky's horse tracks continue to build their case for video lottery terminals (VLTs), officials are talking up the financial boon the computerized slot machines have been to other tracks.
Slot machines helped pay off an $89 million debt in 18 months for Prairie Meadows, Iowa's only thoroughbred track. At Delaware Park in Wilmington, VLTs helped boost daily purses from $75,000 in 1995 to $250,000 this year.
“Unbelievable,” said Steve Berry, Prairie Meadows spokesman. “It was a do-or-die situation. It's been beyond our wildest expectations.”
Kentucky tracks hope for the same result. But first they have to persuade legislators when the General Assembly convenes in January to allow VLTs. They see it as the best way to bolster the state's venerable horse racing tradition, now threatened by the aging of its patrons and by the hugely popular riverboat casinos that dot the Ohio River.
Churchill Downs and Keeneland collaborated on a memo to lawmakers in which they pushed for a law that would allow more than 8,000 VLTs in the commonwealth to be divided among the racetracks. The plan is viewed as perhaps more palatable than a proposal by Gov. Paul Patton to consider a dozen or more casinos tied to hotels.
Turfway Park in Florence is finding its place in the debate. Sold in March to Keeneland, Harrah's and Dreamport, Turfway remained without a president until last month. But now, Bob Elliston is catching up.
“Unfortunately, we were a little late to the dance,” he said, referring to the period in which the track operated without a new boss. “But we're pressing forward. We need to form an in-depth standpoint, develop our case.”
Turfway may be uniquely positioned in the matter, with Harrah's experience in running casinos and Dreamport's expertise in creating game technology. Dreamport also owns a Delaware harness track, Harrington Raceway, which has slot machines.
The companies initially said they would hang back when the debate started, wait for a leader to emerge and then inject their comments.
“We are doing a good job as an industry of building our case,” Mr. Elliston said. “Our partnership understands what it takes to do this in a proper way.”
Amid the research is proof that VLTs and slot machines have helped bail out other tracks.
When voters around Prairie Meadows were faced with a referendum to allow slot machines, they had an attractive incentive: money.
After the track's original bondholders forfeited, the state Supreme Court determined that taxpayers would have to assume the track's then $65 million debt. Slot machines offered another way to pay that money back, and despite a debate over whether Iowa horse racing should be saved, voters went for it.
Now, average daily purses are up to $143,000, from $20,000 in 1994. After-tax profits are divided among several entities, including the county and Iowa breeders. The track has 1,164 slot machines open 24 hours a day, seven days a week.
As Kentucky tracks prepare their game plan, anti-gambling forces continue to preach the ill effects of betting. Nancy Jo Kemper, executive director of the Kentucky Council of Churches calls VLT-type betting machines the worst kind of gambling, saying their immediacy is so seductive.
Gambling foes will never be persuaded, said Mr. Berry of Prairie Meadows, cautioning Kentucky officials not to try. Focus the debate instead, he said, on the benefits to horse racing.
Horse people “are now starting to come to Iowa to breed, which was unheard of,” he said. “Horse racing wouldn't be here except for the acquisition of slots.”
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