OPINION: SLOTS AT THE MALL WON’T HURT HORSE RACING; PETITION TO STOP THEM MIGHT
According to the the Baltimore Sun’s editorial board, fighting to have slots at Laurel Park over the current proposed site at Arundel Mills mall would actually be bad for racing. They claim that with 4,750 machines and potentially $100 million a year in revenue for Maryland’s racetracks, ‘the Arundel Mills proposal stands to pour a tremendous amount of money into the industry.
Click here to read the entire editorial and then come back to the Paulick Report to add your two cents worth.
Tags: Arundel Mills, Baltimore Sun, bradford cummings, editorial board, Maryland racing, Paulick Report
December 22nd, 2009 at 3:44 pm
Run the numbers folks: The racing industry needs slots because the “operator” gets 33% of the revenue. The MD Horse breeders, which pays bonuses to breeders of horses that win at the track, and the racing purses receive a total of 9%. Some of you have mentioned $100 million a year in revenue in slots. Nine percent of 100 is nine million. So you are going to spread 9 million between purses, the MD-bred fund and restore the decrepit, shabby disgrace that is Pimlico? Oh, yes, and keep Laurel running as well. Tried to buy a tractor lately, or a ton of sand?
So now Cordish Companies, who wasn’t involved in bringing slots to Md, gets all the money, excuse me, 33% of the money, after Maryland Racing spent years and extraordinary sums to bring slots into MD.
Mr. Leopold is NOT to be commended for his decision. But as someone commented earlier, we can thank Michael Busch for making all this happen. He blocked slots for years and years and not doubt he is laughing at the demise of MD racing. He hates racing because his father was a gambling addict.
Perhaps this was the plan all along. Soon, when Laurel and Pimlico close, there will be no place for Marylanders to race their horses. Then Busch and company can say there isn’t any Maryland race horse industry anymore, so we will just take that nine percent and give it to our favorite pork fund.
December 22nd, 2009 at 3:47 pm
The track would also get some beer and cigarette money from the sale of beer and cigarettes to grandma. I can’t think of a better way to advance to an enlightened culture.
December 22nd, 2009 at 4:34 pm
Sasscer,
Your points are well taken.
My question: if by law the “operator” gets 33% and 9% goes to purses and to fix up the tracks; how does the ratio change depending on whether or not the “operator” also owns the tracks? It seems that only 9% is going to “racing” regardless. Unless you’re assuming the “operator” dips into their 33% to spend on racing related expenses.
December 22nd, 2009 at 4:50 pm
Some confusion over the $100 million number exists. This is the MAXIMUM amount in any one year that will go to purse dedication and this amount is based on projections from all 15,000 machines in the state operating, not just Mr. Cordish’s machines at the mall. The $100 million is split 80% thoroughbred and 20% stadardbred with breeders getting 11% of the respective portions.
of course, there won’t be 15,000 machines up and running in Maryland for many, many years, so the horse industry must somehow keep itself together between now and whenever all the machines are cranking. Just make your own assumptions based on how many machines you think might be operating in say 1 year, or 2, or 3 and it isn’t nearly as splendid as Cordish and county executive John Leopold make it sound.
December 22nd, 2009 at 8:08 pm
Hi, Steve. I believe the “operator” gets 33% of the slot income they generate at their site. The purses and the Maryand-bred fund get 9 and 1/2% regardless. It is not part of the 33%, but a separate, small slice of the pie.
Whoever the operator is, they have to buy extremely expensive licenses and permits to do this. If the operator isn’t the track, but a slots Casino, they will spend their money on their non racing facility — they will not have to spend on track maintenance which is costly, or track employees like the gate crew. It will be just like Las Vegas, and like Las Vegas, will have no race track.
If the operator is the track, they will keep up their facility, and horses will continue to be bred and race in Maryland. Maryland racing has died because our race fields are so small and the betting product is not as good as the surrounding states with larger fields. Why are the fields so small? The purses are tiny compared to the surrounding states, so everyone races elsewhere.
December 22nd, 2009 at 9:47 pm
Andrew Beyer’s Washington Post column on the Maryland situation unintentionally summed up the state of horse racing:
“Slot money may subsidize owners, trainers and breeders, but their horses are still going to be running in front of near-empty grandstands.”
Right now, the horse racing industry is only concerned about owners, trainers, and breeders. They have abandoned the horseplayer, the customer that fuels the industry. Why are people so surprised this sport is dying?
December 23rd, 2009 at 9:04 am
Matt
without the aforementioned owners, trainers, breeders…there can be no players! Granted Racing has to do a better job of promoting their product but without field size and quality there will be few players to begin with and let’s face it…thereare many ways to play the game without showing up daily ADW’s, simulcast etc
December 23rd, 2009 at 10:04 am
And without the players, there will be no owners, trainers, and breeders.
Let’s not forget that all the track operator had to do was submit the license fee, and this deal was signed, sealed, delivered to Laurel.
December 23rd, 2009 at 11:11 am
Looks like Jerry Abramson’s favorite developer, Cordish, is in the middle of that Maryland soup. Hey, wouldn’t a Fourth Street casino make more sense for Kentucky coffers than Churchill? Surely smart people like Bill Farish and Brer Jones and Tracy Farmer know that once your partners include politicians and developers and “gaming” corporations that your dance never ends. PS What good does it do for Farish to keep talking about some hidden poll showing 70 per cent approval for slots at tracks. If true, why so afraid of a vote by the people?
December 23rd, 2009 at 11:24 am
PS And to make myself clear to Eugene Levey LET THE PEOPLE VOTE!!!!!!
December 23rd, 2009 at 11:53 am
Under the circumstances that Maryland racing is in, the Arundel Mills location is the best available location. Management of the Maryland tracks has shown over 2 regimes that it is not capable of making a soun business decision, much less be in charge of the revenue that will benefit many.
December 23rd, 2009 at 12:03 pm
John,
I’m well aware of the importance of owners, trainers, and breeders. However, everything starts with the handle generated by horseplayers. Beyer put it perfectly, slot money subsidizes owners, trainers, and breeders, but the sport does absolutely nothing for the horseplayer except raise takeouts and block signals. Unfortunately, this sport will continue to die until the powers that be realize that the horseplayer is the lifeblood of the sport.
December 23rd, 2009 at 12:47 pm
Matt,
You said a mouthful about the horseplayer. In Virginia Colonial Downs got a house delegate in their pocket and he got a law passed requiring CLN get 12% take out. It breaks down this way, 5% to Colonial, 5% to horsmen and 2% to the Virginia Racing Commission.
Now when Youbet, Xpressbet, Twinspires want to get Colonial’s product, they can’t negotiate in good faith for a better take out because Colonial sits back and says, “we can’t do anything about it because its a State law”. Yea, one they got pushed through! Wonder why you didn’t have Colonial on your Internet bet site, that’s why, Tracknet LLC wouldn’t pay the rate.
What this means for me a Virginia horseplayer is, if I go to one of their OTB’s and place a bet on Santa Anita, CLN gets the 12%.
They’re really looking out for us aren’t they?
P.S. This has backfired on Colonial, they lost major handle this past meet.
You might be interested in going online and reading the minutes of the last couple of VRC meetings. You can google it.
Thanks, I just had to vent a little.
December 23rd, 2009 at 12:48 pm
Matt is right. In any business, you must begin with the customer in mind. Of course owners, trainers and breeders are important. But “the customer’s always right” is a cliche for a reason.
December 24th, 2009 at 12:45 pm
Anyone who thinks that putting a casino at a track will cause more investment in improving the racing side of the business (for either the fan or the horse player) should go to Delaware Park, where the stands are empty, the fields and racing product are average at best, and the casino is full. The people who run that track have no incentive to make it attractive to players (both serious and casual fans)…and over time, they haven’t and won’t.
Both MEC and the DeFrancis’s did nothing in the past 10 years to improve the fan’s experience at either Laurel or Pimlico–and MEC fired the head of the Jockey Club shortly after he tried experimenting with a lower take-out to appeal to horse players. That person has now gone on to Steeplechase racing, where he is in the process of transforming it into a more prominent facet of horse racing. MEC ruined Gulfstream as a race track, and managed to also lose money on its slots! All they have consistently demonstrated as track owners is arrogance and incompetence, and deserve nothing but an unceremonious exit from Maryland racing.
As far as the MJC’s recent emergence in the fight over slots at the Mall, does anyone think that is anything other than an attempt to juice the proceeds of the coming auction of the Maryland tracks–by creating the illusion that there is some chance that MJC might still receive these licenses?
Horse players will show up when they are treated fairly, the handle is serious money, and the entire experience of being at the track is compelling–otherwise it is all too easy to bet from home on dozens of better options. Fans care less about the handle and take-out–most don’t even understand it. But their casual bets contribute to the handle (and attractive overlays) and their presence makes it a rewarding “experience”…Saratoga and Keeneland come to mind as examples of getting it right.
Where racing cannot stand on its own as a viable business, no amount of slots subsidies will compensate for a poorly run business, and the politicians who created and passed those subsidies will find other more worthy uses for them–particularly when the state’s cut of the take-out isn’t worth protecting.