KENTUCKIANS: KNOW WHO YOUR FRIENDS ARE
By Ray Paulick
There were several byproducts of the Kentucky General Assembly’s special session called last month by Gov. Steve Beshear to tackle the state’s budget crisis and consider a bill to allow video lottery terminals or slot machines at racetracks.
One of those was anger, an emotion directed largely at Republicans in the Kentucky Senate who defeated House Bill 2, the VLT legislation that would have leveled the playing field with so many other racing states in the region. Another was a feeling of abandonment by the government at a time when people in various parts of the horse industry are hurting. Yet another was a belief among many that the end is near for Kentucky’s year-round racing circuit, with Ellis Park and Turfway Park the tracks most vulnerable to being closed.
The anger many of us felt in the wake of the defeat of the VLT legislation is perfectly normal. The Republicans, led by the bully of the Senate, David “Blackjack” Williams, are the villains in this saga. Williams, who likes to gamble at casinos in nearby states like Indiana and Mississippi, is one of those politicians who wants to “protect us from ourselves” and legislate morality. But Williams can’t, and hasn’t, stopped countless Kentuckians from driving across bridges into Illinois or Indiana or West Virginia and gambling to the tune of hundreds of millions of dollars a year, or more—to the benefit of horse racing in those states and to the detriment of Kentucky’s signature industry.
He’s enlisted people like Damon Thayer, the “Senator from Scott” who was jeered during a horse industry rally at Keeneland held after the Senate Appropriations & Revenue Committee voted to kill House Bill 2. I’ve known Thayer for more than 20 years, and like him. We’re about as far apart on the political spectrum as two people can be, but we both want to see the horse industry succeed.
I’m amused that Thayer, who comes from a Republican Party that believes government should stay out of people’s lives, feels Frankfort politicians should keep Kentuckians from gambling on slot machines in their home state to the benefit of the horse industry. He would rather raise taxes on (guess what?) other kinds of gambling, including the lottery and horse racing. In a speech on the Senate floor during the special session, Thayer said he favored raising taxes on these other forms of gambling so the horse industry would get temporary, Band-Aid relief. He was simply hawking Blackjack Williams’ alternative to VLTs, and I’m sure Williams will reward him for his loyalty.
I encourage you to view Thayer’s speech, which can be seen by clicking here, and decide for yourself if he is a friend or foe of racing.
The interesting thing about the inability to get more Republicans behind this bill is that so many powerful horse breeders in Kentucky are major contributors to the Republican Party on the federal level. Perhaps there is a disconnect between people like Kentucky Sen. Mitch McConnell, the de facto head of the Republican Party in Kentucky, and Blackjack Williams, the strongman of the state Senate. (Williams, according to many sources, takes his direction from homebuilder Don Ball, who as former head of the Kentucky Thoroughbred Association owes an explanation to the horse industry for his opposition to leveling the playing field with VLTs or slots.)
The feeling of abandonment was countered at that same horse industry rally at Keeneland when more than 20 Republicans and Democrats from the state House and Senate came to show their support to the crowd of about a thousand people. As Keenelend’s Nick Nicholson said, people in the horse industry should know that they have more than a few friends in Frankfort. There seemed to be no quit in those who gathered inside Keeneland’s sale pavilion that night, and let’s hope the enthusiasm they showed can carry forward to 2010 and beyond, if necessary.
The industry didn’t have enough friends, though, and it’s more important now than ever to get involved politically, to contact those Senators and Representatives who voted against House Bill 2 and let them know your feelings but to also contact those who supported the industry and thank them for what they did. Respectfully tell the opponents of the VLT legislation that you will work to replace them with people who are willing to support the horse industry in Frankfort.
Finally, there is the issue of how long this industry can maintain a year-round circuit without the economic necessity of slot machines at the tracks. Racing in Kentucky experienced significant growth during the late 1980s and early to mid 1990s when tracks capitalized on in-state and out-of-state simulcasting, but it’s been stagnant in recent years as other states have improved their purse structure thanks to slots.
Ron Geary, the owner of Ellis Park, has said 2009 would be the Western Kentucky track’s final year, but he’s apparently reconsidered that stand after hearing an appeal from local government officials. It’s a good thing that Turfway Park, which sits on land more valuable for development than for racing, is owned in part by Keeneland. Racing will not thrive at either track until the legislature recognizes the need for help, but perhaps it will survive another year or two.
In the meantime, channel the emotions that came out of this special session in a positive way by supporting those individuals in state government that support our industry. And let’s work to replace those who aren’t willing to give racing the tools it needs to compete. Know who your friends are…and aren’t.
Copyright © 2009, The Paulick Report
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Tags: blackjack williams, damon thayer, david williams, Don Ball, ellis park, house bill 2, Keeneland, kentucky slots, kentucky vlt legislation, mitch mcconnell, nick nicholson, Paulick Report, racinos, Ray Paulick, ron geary, turfway park
July 2nd, 2009 at 12:26 pm
We may be entering an era where government will need to be the owners of racing facilities. As repugnant as that may sound - and I recall the shambles that was Cleveland Municipal Stadium when it was owned by the city of Cleveland - it may be the only way for some tracks to survive and the only means that will bring political focus on the industry in many states.
I see it in Ohio; the demonization of the industry by politicians, but then an outcry when tax revenues decline at the tracks. Having a vested interest - like that in a state-operated lottery - should bring stability where chaos now reigns.
July 2nd, 2009 at 12:33 pm
Certainly nothing wrong with supporting politicians who may be “helpful” and opposing those who are not. Vested interests do it all the time. Unfortunately the pay-off in this instance is away in the future. In the meantime, the horse business needs to do more to help itself.
The recent comments of Ken Ramsey should be noted by everyone. It is a mature industry. It should be able to pull itself up and move along, without steroids from slot machines.
Kentucky could have a very viable circuit concentrated on the Keeneland/Churchill/Turfway triangle. Kentucky Downs and Ellis Park should be closed - the owners had no intention of continuing to stage live racing if slots were not legalized. They gambled and lost.
All political effort (meaning MONEY) should be pumped into Federal politicians so as to amend the Interstate law and give the host tracks the major share of revenue, as repeatedly argued by Fred Pope.
There are countless ideas out there in the Thoroughbred community. Somebody with magnetism should pull them all together for a brainstorming session.
July 2nd, 2009 at 12:35 pm
Ron Geary’s whining is getting REALLY obnoxious. He bought a discounted track on the come bet of racinos. Sometimes you win and sometimes you lose, Ron. You bought a race track. Let the people decide or KEEP on losing.
July 2nd, 2009 at 1:39 pm
Although I am a life long Republican, I am tired of some Republicans trying to be the moral authority for me on how to live my life. Look at Senator Ensign from NV and Governor Sanford from NC. They were two of the leading moral voices of the party. I live in Virginia and I really do not need elected officials telling me how to live, when they do not lead a proper life themselves.
We need slots to survive, whether in Kentucky or Virginia and if certain politicians cannot see that, then it is time to elect those who do, regardless of party.
July 2nd, 2009 at 1:50 pm
PS Check out the three special elections in Kentucky recently where expanded gambling was a big issue, especially the Newberry Senate loss in Glasgow and Mongiardo’s seat picked up by a Republican. Be careful with threats if you’re afraid to let the people decide.
July 2nd, 2009 at 2:04 pm
Paulick, you’re not writing about saving the racing industry, you’re only writing about shoveling some unearned money to owners/breeders. Slots do not add to racing handle. The question should be, “how do we get racing fans to contribute to the racing handle?”. How do we get more fans betting more money? The answer to that is the only long term solution to the racing industry. As Ramsey said, “a mature industry should be able to support itself.” I enjoy racing, but I absolutely will not bet into a 20%+ takeout. You would doing racing a bigger service if you became a protagonist for the bettors instead of a shill for owner/breeders.
July 2nd, 2009 at 3:01 pm
If we are going to quote Ken Ramsey
then I gotta say his article was…well…?? misleading at best. A mature Industry should stand on its own? Sure glad to…except when the forces around us have an unfair advantage. Level the playing fields and I will go along..since the other States didn’t ask us what we wanted and thought the Slots were the best idea to get our Green Business then one has to say they are right…Ramsey goes on to say that he sends his mares to other States and races at Presique Isle cause he can’t make enough money in Ky!!! I believe we have a HUGE contradiction in terms here.
On top of this Garrett says two tracks should close…I notice he left Turfway open…how are they going to stay open?
One thing I agree with is the take out needs to come down. 8.5% would be a number that people would really bet into…Can it ever get there? Doubt it
July 2nd, 2009 at 3:34 pm
Slots legislation is dying in Ohio.
Russia this closes several casinos because they reckon this type of gambling is bad for people when it is made too accessible. They are moving casinos out to the desert.
There is a message out there if anybody cares to listen.
By the way, i doubt that religious fervor was involved in the Russian decision.
July 2nd, 2009 at 4:20 pm
Well said Picksburg Phil-
I’m a fan of Mr. Paulick’s Blog,but it is obvious that Mr.Paulick has owners and breeders above the Horseplayer.
I would also say that Horseracing would be better off if half or more of the racetracks went out of business.Just think about the size of the Pools!
July 2nd, 2009 at 4:22 pm
I think it is a mistake to throw Senator Thayer under the bus. I’ve had my differences with the Senator and I’ve spoken to him about them. However, he is much more a friend than a foe. At the end of the day the bill did not come to the Senate floor which was not his fault and he didn’t have a chance to vote. There are others that absolutely need to be replaced including those on the committeee that refused to let this bill come to the floor. Give him the benefit of the doubt. He raises some valid poiints and he has the potential to assist us. There are others that don’t have that potential and won’t ever support us. We should concentrate our efforts towards them.
cb
July 2nd, 2009 at 5:24 pm
I always knew that Bandoroff feller was a Mensch!
(Look that up in your Funk & Wagnalls!)
July 2nd, 2009 at 5:45 pm
Phil and Steve,
I’m not sure how the addition of slot machines to a racetrack’s wagering menu hurts horseplayers in any way. If anything, the resulting higher purses attract bigger, more competitive fields that will be more attractive betting races. In addition, the revenue racetracks should make from slots might actually allow them to reduce takeout, something that is an economic impossibility given the current economics of pari-mutuel wagering.
I’d love to see takeout reduced, but I have yet to see any examples where reduction in takeout has led to enough of an increase in handle to make up for the lost revenue of lower takeout. Bill Nader, the former NYRA exec now with the Hong Kong Jockey Club, gave a good presentation at last year’s Asian Racing Conference on a rebate program that effectively lowered takeout for the biggest players. (See the section under “Do Lower Prices Increase Sales?: at the following link: http://www.paulickreport.com/blog/why-does-racing-hate-us-old-men/)
I do agree with anyone who says slots are not the answer…I consider them an economic necessity. I would like to see a specified percentage of slots revenue earmarked to promote racing, something that isn’t done at many racinos. Pari-mutuel handle has fallen at many tracks since slots were introduced, suggesting either a) that horseplayers have converted to slots players (unlikely), or b) horseplayers feel like they are being treated as second-class citizens behind the slots players.
I would hope that Kentucky’s horse heritage would convince track owners to use slot revenue to invest in what has been their core business: pari-mutuel wagering. Maybe that’s a naive thought, but I see a difference between the ownership of Kentucky’s tracks and those in West Virginia, Indiana, or Pennsylvania.
As John Greathouse said in a comment above, the playing field isn’t level. Take slots away from all the other states that have them and I’d bet Kentucky racing would do just fine, but that’s not going to happen.
July 2nd, 2009 at 6:12 pm
Ray, Ron Geary would be right at home running a track in W. Va. Pa. or Indiana. Ellis Park is a joke of a race track and Geary is a corporate raider who sells to the people like a bad cheese.
July 2nd, 2009 at 7:37 pm
Ray said, “I’m not sure how the addition of slot machines to a racetrack’s wagering menu hurts horseplayers in any way.”
Only to the extent that it continues to mask the problems. I actually would like to see full casino/resorts, including blackjack, poker, nightclubs, hotels, etc. at the racetracks. Some are already doing that. But, like the owner/breeders, I am selfish. I want to bet on horses. But not with a 20%+ rake. It is insane to bet against such an enormous takeout. Like owner/breeders, I want more money for my efforts and “investment”. I read your post about HKJC. Interesting, but not conclusive. I’m not sure the effective drop in rake was enough to change behavior that much. It also didn’t state the timeframe. I think Laurel had a 10% takeout for a 14 day meet a few years ago. Not long enough to cycle through an average fans attendance. As far as economics, perhaps owner/breeders have to adapt to the “new normal”. The $40,000 stud fee becomes a $20,000 fee. The $200,000 yearling becomes an $80,000 yearling. After all, they weren’t always at the current elevated level. I own stock in an oil tanker company. Since oil prices have dropped, ship prices have been halved. Why shouldn’t that be the case with horses?
July 2nd, 2009 at 8:54 pm
Ray,
Do you actually think that people like Geary,Fields and others would have purchased their racetracks with out the prospect of Slots or Casinos.They are gambling,If It fails I don’t feel sorry for them.(Fields will get his casino next year)
Horseracing is Secondary to these people.
I also would like to say that any state that passes Slots/Casinos (with benefits to a Racetrack) should have to give back to the Horseplayer.
I recommend one pick 3 and one pick 4 a weekend with zero Takeout.
What do you think,any takers?
July 2nd, 2009 at 9:15 pm
Whether or not reducing takeout is an “economic impossibility given the current economics of pari-mutuel wagering,” that doesn’t absolve any of the racetracks in Kentucky or elsewhere from gouging their customers all these years, in good economic times or bad. If they had truly cared about stopping the hemorraging of the fanbase when the going was better earlier in the decade (or earlier), they would have implemented price cuts then.
Ray said, “If anything, the resulting higher purses attract bigger, more competitive fields that will be more attractive betting races.”
I would say this depends on where the extra money goes. If, as is the case at many racinos, the money goes to fatten the purses of $5,000 conditioned claiming races, events restricted to statebreds or other races where the animals participating are typically slow and frequently undependable from race to race, I and many other horseplayers would still find those races unworthy of time and investment.
July 2nd, 2009 at 11:12 pm
Holy crap! There are serious suggestions that we listen to Ken Ramsey and the Russian Govt? we are in trouble1
Yeah sure Putin and gang are closing (actually “relocating” them to Siberia) those casinos for the ‘good’ of the russian people. How much you wanna bet Barry that in a year or two those same casinos reopen under new management of Putin’s cronies?
July 3rd, 2009 at 10:02 am
Wesly, you are pissing in the wind with your comments on Putin.
My point is that, if you look at the history of casino gambling, there has been an ebb and flow of public and governmental sentiment for the past couple of hundred years.
I think what is interesting in Russia is that in the midst of a global recession, they are willing to take the move they did.
Racing would be making a big mistake to get in bed with casino people. It is unsafe on several levels.
July 3rd, 2009 at 6:14 pm
Barry
I know and respect you…we both have our livelhood’s tied up in this game…but please don’t compare Russian Casion to regulated Gaming in the USA…THE MONEY is already crossing the river…Ramsey’s article was a joke…I send mine elsewhere but you should stay here…you have horses that race at Tracks that support Gaming…If you are a hay, oats and water guy like our other friend…then do it ..race here and treat your horses with nothing!
I don’t like slots any more than anyone else but level the playing field and try to come up with something except NO SLOTS will you!
July 4th, 2009 at 3:16 pm
Wow ! I never thought that this would become an incestuous family feud ! It is all about “who’s ox is being gored”. It is all about blind cash without a business plan. Not knowing how the village will benefit. Just desperation ! It is interesting to read RP quoting Nader and stating . ” I’d love to see takeout reduced, but I have yet to see any examples where reduction in takeout has led to enough of an increase in handle to make up for the lost revenue of lower takeout. Bill Nader, the former NYRA exec now with the Hong Kong Jockey Club, gave a good presentation at last year’s Asian Racing Conference on a rebate program that effectively lowered takeout for the biggest players. (See the section under “Do Lower Prices Increase Sales?)
Rebating was the hottest topic in horseracing history in this country! Rebating was the most effective tool for lowering takeout to volume players in history!
Allowing rebating, horseracing in this country had the largest surge in handle in the shortest period of time in history! Nader must have learned something as NYRA stopped rebating in 07 and went broke. It is so typical in our business that people can be so passionate for and against something and never research the benefits. Here we go AGAIN !