Posts Tagged ‘Slot machines’
Monday, February 8th, 2010
Barry Irwin, the founder and CEO of Team Valor International, has made no secret of his opposition to the racing industry’s reliance on revenue from slot machines or other casino games. The following piece not only cautions pro-slots advocates about the threat of a Trojan horse strategy by gaming companies but suggests racing would be better off in the long run by promoting the sport and not the financial aspects of horse ownership. While his proposals could lead to a reduction in the number of tracks, racing dates and Thoroughbred foals, Irwin says the industry needs to find a viable level at which it can sustain itself. — Ray Paulick
By Barry Irwin
David Greathouse once said to me "We made a big mistake telling people they could make money racing horses."
The "we" referred to by the bloodstock agent and partner in family owned Glencrest Farm of Central Kentucky were those folks that sold a bill of goods to newcomers by telling them that racing was a financially viable pursuit.
Greathouse made a very insightful comment, one that I have reflected upon for the last 3 decades.
As he pointed out, one only has to look at other equine sports to see how they have presented themselves. Trainers of sport horses, dressage horses and show horses rarely if ever promote their sport to participants based on how much money can be made. The ones that do are not around very long.
Yet, by and large, the cost of keeping a three-day event, dressage, jumper or show horse in training is not insignificant. Any parent of a son or daughter with a horse in training at a local riding academy or stable knows precisely what I mean.
Those involved in these disciplines, however, willingly pay the costs because they receive value from the enterprise. That value, in most instances, is not derived from the earning of prize money or the resale of their animals.
Not that these horses lack value. A top dressage horse or jumper or event performer or even a very good child’s pony can be quite valuable in terms of dollars. The best of these animals sell for prices in the hundreds of thousands to the millions of dollars, especially if they are World Equestrian Games or Olympic quality.
But somewhere along the line, marketers of Thoroughbreds shook the genie out of the bottle and promoted their horses as a means by which one could expect to make a buck.
And it wasn’t just the hardboots of Kentucky, the sharp-tongued bloodstock agents in Florida or the fast-talking middle men in California that focused on the dollars.
The scholarly Joe Estes, a staid, analytical and proper gentleman whose bent for statistical analysis made The Blood-Horse the must-read trade magazine of the Thoroughbred industry, in 1948 developed the Average Earnings Index as the measurement by which sires were rated and ranked. It was all based on how much money the offspring of those stallions earned on the racetrack in a given year.
Clever marketers grabbed the ball and ran with it. Racing, a prospective owner could read and see and hear, was a good way to get rich.
For sure, there is money to be made in the Thoroughbred industry. Owners of farms, especially the majors like Coolmore/Ashford, Darley, WinStar and Lane’s End, need to operate on a sound financial basis and they prosper.
Support staff for horses such as trainers, veterinarians, hospitals, rehab facilities, training centers, transportation and insurance companies all make money. Just as they do in all other equine disciplines.
But the people Greathouse was referring to are the consumers of the horses, and the notion that has been floated for the past century in the United States that owners of racehorses are involved in a money-making venture. We would be better off today, he said, if we had never introduced the notion that one should expect a return on investment in a racehorse.
Can and do some owners of racehorses make money?
Of course.
But the percentage is so small that anybody getting into the game must be realistic and understand that these successful owners are the exception, rather than the rule.
If the marketers of racehorses promoted the enterprise based on racing’s intangibles, rather than the tangibles, it would be better for all concerned. Expectations could be better managed and the inevitable turnover rate of owners would decrease. Also, a lot of pressure would be taken off of the marketers themselves.
So if one cannot count on making money by racing horses, where is the value? Where’s the beef!
NO. 1 REASON TO BUY HORSES? THE THRILL OF RACING
I have been forming racing partnerships since 1987, so I have learned a lot about why people want to race horses. Invariably, the prime motivating factor is the prospect of racing a good horse and experiencing all of the magic and excitement that goes along with it.
The thrill of racing is the number one reason why people buy a racehorse. Yes, there is a lot of posturing about wanting to make money and getting the best deal, but mostly, in my experience, those people making this type of chatter feel they must treat it seriously, because they fully realize (consciously or even subconsciously) that they are totally indulging themselves and find a need to justify their purchase of a racehorse.
I know that many reading this will scoff at what they have just read, but I know it to be true in virtually every instance. And here is another reason I know that money is not the primary reason that people buy horses: even if these folks that are so concerned with dollars are offered a reasonable profit, they invariably do not take it. They will come up with any number of sound reasons for not accepting the profit, such as the tax man’s bite or capital gains holding periods. But in reality, they do not sell because they bought the product to consume it, not primarily to profit from it.
For these people, who form the vast majority of racehorse owners throughout the world, the value is not in the vaunted and much ballyhooed ROI, but in the intangibles, such as pride of ownership and race day thrills.
Have I taken the time to write the preceding 1,000 words just to make a point that people buy racehorses just for the excitement of it all?
C’mon … gimme a break! This is just laying the groundwork. Now, here comes the good part.
Racing is at a critical crossroads in its history, much like it was a third of the way through the last century, when horseracing’s very existence was threatened by those seeking to outlaw it.
The pari-mutuel system of betting, despised by those who wanted to bet with bookmakers, changed the entire face of racing and offered a financial boon to troubled states at a time when the nation faced a worse financial crisis than it does now.
Today, three forces threaten to shut racing down or at the very least, reduce it to a pitiful sideshow. The entities are, in no particular order, racetracks, state governments and gaming interests. In some instances, the racetracks and the casino interests work together. In the future, all three have financial reasons to join forces and work against horseracing.
Right now, there are plenty of people inside of horseracing that see the way to stemming the downward slide and growing the sport is to get in bed with the casinos. There already has been enough evidence on record to indicate that the casinos represent a Trojan horse. They want access inside a racetrack in order to gain a foothold, which they can use to entice both the racetrack and the state to eliminate the expense of horseracing.
Horseracing interests have spent entirely too much capital, time and energy trying or getting into bed with interests whose ultimate goal is to snuff out the game.
Given that the people attracted to horse ownership find more value in the sport than the money involved, I would like to suggest that racing consider making two adjustments that can lead it on a different path, one that hopefully can go some way in establishing a more viable future for the game.
PROMOTE THE SPORT, NOT THE FINANCIAL REWARDS
If I am correct in my contention that the sport trumps the dollar, let’s start by reframing the goals of horse ownership by concentrating on promoting the sport and not the financial rewards to newcomers.
Those marketing horses can take a lead from the top racing partnerships like Dogwood, West Point and Team Valor International. When communicating with newcomers, these outfits stress the intangible aspects of the sport and let neophytes know right up front that if they are getting into racing with the expectation of making a fortune, they are being unrealistic.
Believe me, we are selling our sport short if we think that we must rely on greed and the false promise of life-changing riches in order to attract newcomers and keep them. People, guess what? This sport really is this good!
Secondly, and more importantly, if the sport does indeed trump the dollar and purses are not the end all and be all of the game as we have been told, I suggest that it behooves racetracks to stop pursuing partnerships with casinos and return to their original purpose, which is to promote the sport of horse racing.
I think the non-profit racing associations would be more receptive to this concept, as the for-profit groups seem bent on providing the most return to their shareholders no matter how adversely their actions impact horseracing. Some tracks right now act like they would like to stop producing a live sport altogether.
In the final analysis, the only way our game is going to prosper at a high level again is for the sport to thrive, because it is the sport that provides the driving power, not alternative gaming. Casinos are great for racetracks. They are not good for racing. In the short run, horsemen will be compensated. But in the long run, the casinos will drive them out of business.
MAKE PEACE WITH HORSEPLAYERS
Racetracks that want to stay in business should promote racing. Otherwise, they should not apply for a license and go into the casino business and leave racing alone, so that it can find others to promote it that have their heart in it.
High purses are good, but they are not critical. Racing for years has prospered in many locales where prize money has been very low. It is not ideal to have low purses. But one of the reasons racing in America in particular could use a high purse structure is that expenses to have a horse in training are too high. A lower purse structure, however, could have the benefit of giving a break to gamblers that have supported our enterprise for years.
For racing to prosper again, here is what needs to happen:
1. MEDICATION: racetracks need to take charge of all veterinary supplies to gain control over the use and cost, so that the public is better protected from unscrupulous practitioners and owners can have their horses treated by drugs at as close to cost as possible. Vets can make their money diagnosing and treating horses, like human doctors have forever. They should not look for their compensation from middling strapped owners on the difference in the wholesale and retail price of drugs such as GastroGard and hyaluronic acid.
2. FEED: racetracks need to buy the feed and make it available to horsemen at as close to cost as possible to lower the expense to owners.
3. TAKEOUT: it should be reduced on all wagers to 12 percent, with the state getting 2 percent and the horsemen and the track getting 5 percent each. The states have been greedy for too long and they mostly have budgets inflated by expenses for racing commissions that are woefully inept. Horseplayers have carried the game on their backs for far too long and we need to cut them some slack. It is more important to cater to the bettor than to have higher purses.
So by adjusting to lower purses, horsemen can accomplish a lot. They can make peace with horseplayers. They can keep the casino wolf at bay and improve the chances for the longevity of the sport. And they can concentrate on promoting the game, which in the end is the only thing that can offer it salvation.
In conclusion, racing needs to do whatever it can to concentrate on the core activity, which is racing. The sport must be promoted first and foremost. Secondly, the game must realize that contraction is its friend. By reducing the number of horses bred, the number of tracks in operation and the sheer number of races run, the concentration in quality will only aid the game. Bad horses, bad racetracks and lousy races help nobody. There are too damn many tracks that are nothing but an excuse to have simulcasting.
If by having lower purses the result is that the game contracts, so be it. That way, at least we will find a viable level at which the sport can be sustained. The subsidies from gaming are temporary, no matter what the law says, because as we have all seen, when state budgets get low, the legislators simply amend the law and grab what they need.
Racing must change its focus to promote itself, seek its viable level and send out the best product we can to the bettors that support our game. We need a new model. The present one is broken. It is time to get real.
Tags: barry irwin, gaming revenue, Horse Racing, Paulick Report, racehorse ownership, racing partnerships, Ray Paulick, Slot machines, team valor international, vlts
Posted in Medication, Slot machines, Thoroughbred Business, Thoroughbred Ownership | 99 Comments »
Tuesday, December 22nd, 2009
Joining the fray by painting a dark and morbid picture of the Laurel Park situation, legendary turf writer Andy Beyer points out what not having slots will do to racing at one of Maryland’s historic tracks. Stating that "Laurel desperately needed slots because its horse racing business is no longer viable", Beyer lays out the reality that there may not be a buyer for the track if there are no slots.
Click here for the story and then come back to the Paulick Report and let us know what you think.
- Bradford Cummings
Tags: Andrew Beyer, Andy Beyer, bradford cummings, laurel park, Paulick Report, Slot machines
Posted in Maryland Horse Industry, Slot machines | 11 Comments »
Monday, December 14th, 2009
Press Release
(LEXINGTON, Ky.)— In a meeting held this morning, the Kentucky Equine Education Project Board of Directors unanimously voted to redouble their efforts to protect Kentucky jobs and put our signature horse industry on a level competitive playing field.
“As we all know, our competitor states are using revenue from expanded gaming to enhance their purses and breeders incentive funds, which is causing a severe loss of Kentucky racing and breeding stock to those other states,” commented KEEP Chairman Brereton Jones. “When horses leave our state, jobs go with them, from the farmer who grows the hay, to the veterinarian, feed supply salesperson, equipment manufacturer, groom, equine insurance agent and on and on.”
“One-hundred thousand Kentuckians depend on the horse industry for their livelihoods. We have a duty to make our industry as healthy as possible, to bring back the jobs that have already left the state, and to protect and create new jobs right here in Kentucky. We have no choice but to keep fighting for our industry.”
“The KEEP Board voted unanimously to pursue a legislative strategy that would save jobs and provide immediate relief by putting our industry on a level competitive playing field,” continued Jones. “The Board also voted unanimously to further engage our 15,000 members statewide in the political and fundraising process, and to continue the trend of growing our membership across the state. Our industry is committed to recruiting and supporting candidates that will support the horse industry.”
“This will continue to be an industry wide effort,” concluded Jones. “Seventy percent of Kentuckians agree that our industry should be put on a level competitive playing field, and a bill passed the House of Representatives for the first time ever this past June. We are so close to reaching our goal, and our resolve has only strengthened. We will not quit until the fight is won.”
Savvy businesses recognize value. Advertise in the Paulick Report.
Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick
Tags: brereton jones, keep, Kentucky, kentucky equine education project, Paulick Report, Slot machines, VLT
Posted in Kentucky, Slot machines | 4 Comments »
Friday, December 4th, 2009
By Ray Paulick
It is no secret that the Democrat/Republican team here at the Paulick Report has been pushing for slots to be added at Kentucky’s racetracks since the legislative session earlier this year. It’s a reluctant position, wishing our sport could dig itself out of the hole on merit alone. But with all the other competing factors, it is obvious something must be added to the revenue stream to give racing a fighting chance to survive in this strange new world. Let’s face it, it ain’t 1973 anymore.
And so hopefully, this will be the last column I will have to write about David “Blackjack” Williams, the Republican president of the Kentucky state Senate who has steadfastly opposed legislation allowing Kentucky’s racing industry to compete on a level playing field with surrounding states. For those of you tired of this conversation, that possibility alone is enough for this to be labeled a Good News Friday piece.
On Tuesday, Kentucky will be holding yet another special election for a vacancy in the 14th Senate District after Democratic Gov. Steve Beshear appointed former Republican State Sen. Dan Kelly to a cushy judgeship. Covering much of Central Kentucky, this district certainly leans Democratic in registration numbers, but, like much of Kentucky, the voters are quite conservative. This is no slam-dunk for the pro-slots movement, but with a dominant lead for Democrats in fundraising, especially when combined with money brought in by the horse industry, there is a very good chance the Republicans will lose another seat in the Senate, and the balance of power will get ever closer to tilting to the Democratic side.
Both candidates have experience in Frankfort, with Republican Jimmy Higdon currently the state representative that encompasses a good portion of the 14th Senate District. From what I can tell, he is a hardworking and honest legislator. However, only three paragraphs into the ‘About Jimmy Higdon’ section of his website, Higdon draws a line in the sand on the slots issue. “On gambling, Jimmy Higdon voted against the governor’s slots-in-racetracks bill during the 2009 special session and he is committed to oppose the legislation as it is currently drafted.”
On the hand, former Democratic state representative and city councilman Jodie Haydon understands the issues our industry faces. Haydon rightly points out that “over 100,000 people have jobs in the Kentucky horse industry” and does an expert job of explaining the relevance of this number. “If you put Toyota, Ford, Delta and UPS all together, their employees would only amount to 1/3 the number of employees in the horse industry.” That’s a strong statement from a bold leader.
In reality, this race isn’t about Jimmy Higdon or Jodie Haydon. Instead, this election needs to be a referendum on the bully politics that David Williams has displayed over the past decade. A win for the Democrats in this election will spell doom for Williams’ once-mighty majority. This final nail in the coffin would most likely awaken the sleeping giant, United States Senate Minority Leader Mitch McConnell, who will surely do everything in his power to keep the Republicans in the majority in Kentucky’s state Senate.
Why would the country’s most powerful Republican U.S. Senator care about this outcome? Whichever party holds the Kentucky Senate in 2010 also controls the redistricting of the U.S. Congressional seats based on the upcoming census. Currently, Republicans enjoy a 4-2 advantage but if the Democrats grab a majority after the mid-term elections that number could flip. Nothing would be more embarrassing for McConnell in a year that is certainly trending Republican.
With that in mind, David Williams is grasping at his last straw on Tuesday. A win and he probably holds on to his position. A loss and the McConnell machine will most likely push another candidate for Senate President during the run-up to this year’s general session. For those of you not familiar with Kentucky politics, McConnell has previously taken this type of matter into his own hands when dissatisfied with his party. He recruited former Louisville Congresswoman Anne Northup to run against sitting Republican Gov. Ernie Fletcher in the primary for the 2007 gubernatorial election. While she lost, the primary delivered a final blow to an already scandal-ridden Republican who then lost big in the general election to current Gov. Beshear.
More recently, McConnell used his power to cut off fundraising to Hall of Fame pitcher and Sen. Jim Bunning, deeming him unelectable in the 2010 Senate elections, opting instead to support Secretary of State Trey Grayson. Bunning decided not to seek reelection.
If the bell tolled for a Hall of Fame pitcher and veteran Senator and the first Kentucky Republican governor in 32 years, David Williams will be gone faster than you can say VLT. The clock is ticking on the heavy-handed reign of Kentucky’s current State Senate President, a man who for some reason has taken it upon himself to try and destroy Kentucky’s signature industry. Let’s hope after Tuesday’s results, Williams’ time is up.
Copyright © 2009, The Paulick Report
Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick
Liberation Farm celebrates the many horsemen and horsewomen who strive each day to make things better for horses and those who work with them. To learn more about Liberation Farm, click here.
Tags: Anne Northup, Census, congress, Dan Kelly, david blackjack williams, david williams, ernie fletcher, Good News Friday, Jimmy Higdon, Jodie Haydon, kentucky democratic party, kentucky republican party, liberation farm, mitch mcconnell, Paulick Report, Ray Paulick, Senate, Slot machines
Posted in Good News Friday, Kentucky, Slot machines | 20 Comments »
Friday, November 13th, 2009
By Ray Paulick
Oh, the irony. Damon Thayer, the Republican state senator in Kentucky who opposes legislation permitting slot machines that would benefit the state’s horse industry, is a former racetrack and Breeders’ Cup executive who, for now, makes his living as a Thoroughbred industry consultant.
One of Thayer’s clients is the Millennium Farms owned by former Dell Computer executive Ro Parra. On Thursday, Millennium Farms announced it was forming a partnership with Louisiana-based Moon Lake Farm and would be sending 30 of its Kentucky-based mares to Louisiana. It previously announced that two of its Kentucky stallions would move to Louisiana.
“We will likely move more mares over time,” said Parra. “We feel that the Kentucky program is not as competitive as other regional programs like the one in Louisiana.”
(Click here to see the complete press release, published by Thayer Communications and Consulting LLC.)
Louisiana’s racing and breeding programs are supported by revenue from slot machines. Kentucky’s breeders’ incentive program, developed by Thayer, is funded by the sales tax on stud fees, which are sinking almost as fast as the senator from Scott County’s approval ratings among Kentucky owners and breeders.
Thayer has opposed slot machine legislation in Kentucky though he recently announced he would be sponsoring a constitutional amendment to permit Kentuckians to vote on whether VLTs should be permitted. If that legislation is approved by the Kentucky House and Senate (a longshot at best), and the referendum is passed by Kentucky voters, the proposed constitutional amendment would then require local referendums in the counties where the VLTs would be authorized. If the measures are approved in those locales, there would then be a lengthy licensing and bidding process.
Some have estimated that, if all these measures are approved, Kentucky might not get VLTs installed until late 2013 or early 2014.
By then, you have to wonder how many stallions and mares will be left in Kentucky and how many horse industry clients Thayer Communications and Consulting will have in the Blue Grass State.
Copyright © 2009, The Paulick Report
Savvy businesses recognize value. Advertise in the Paulick Report.
Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick
Tags: damon thayer, Dell Computer, Louisiana, Millennium Farms, Paulick Report, Ray Paulick, Ro Parra, Scott County, Slot machines, Thayer Communications and Consulting, VLT
Posted in Kentucky, Slot machines, Thoroughbred Business | 33 Comments »
Thursday, November 12th, 2009
Not all is well in the kingdom of David Williams, Kentucky’s State Senate President and the state’s most powerful Republican not named Mitch McConnell. Republican Senators continue to drop like horseflies as a result of Williams’ strident anti-slots view with another possible casualty coming up soon in the race between Democrat Jodie Haydon and Republican Jimmy Higdon.
As a former Republican leader, I can promise you this makes many among the party faithful nervous. An increasing number are wondering why we are choosing to die on this cross. Is this really a core Republican issue on the same par as lower taxes and less government? Shouldn’t we have a pro-economic development stance on this issue instead of obstructing growth for political purposes? And in a state that already has pari-mutuels and a state lottery, haven’t we already crossed the pro-gambling threshold anyways?
With the prospects for Republicans losing the Senate becoming more likely, conservatives in Kentucky are increasingly concerned about the consequences. Even more important than not controlling a single branch of state government, the redrawing of the US Congressional districts will be done by the Senate. If Democrats have control, they will change the make up of the Kentucky coalition of Congressmen for the foreseeable future. Most maddening, this all could have been avoided if David Williams hadn’t decided to put all his eggs in this fringe issue’s basket. This is the problem with the modern Republican party; we spend too much time on 50/50 divisive issues like gay marriage and slots at racetracks and don’t concentrate on important "kitchen table" policy that people really want to hear about.
My former organization, with no prodding from yours truly, sent out an interesting email last night asking a few simple questions about the gaming issue. That in itself is not a huge deal, but the wording and sources cited make it clear that at least from the big city Louisville Republican perspective, Bill Farish’s hope for a palace revolt may not be too far behind. Not only do they lay out the case for slots in Kentucky, but they use the facts page from KEEP, an organization most recently known for promoting expanded gaming in the Bluegrass State.
Having been on the receiving end of many disgruntled phone calls after the Senate debacle this summer, I can tell you the Louisville natives are restless. I was able to fully use my voice on this issue once I left my position as chairman. It’s good to see the wind of change are allowing the Jefferson County Republican Party to begin speaking out as well.
- Bradford Cummings
AN EMAIL DISTRIBUTED BY THE JEFFERSON COUNTY REPUBLICAN PARTY
PLEASE FEEL FREE TO TAKE THE SURVEY LINKED AT THE END
When people think about Kentucky they think about horses, and the Kentucky Derby. The horse industry employs over 100,000 people, and is Kentucky’s largest agricultural cash crop. To learn more about the economic impact of the horse industry in Kentucky go to: www.horseswork.com/facts.htm.
But the horse industry in Kentucky is in trouble. Our racing stables and breeding stock are being moved to other states. The reason is simple economics. These competing states are subsidizing their thoroughbred industries with the proceeds from slot machines. These subsidies help them to attract racehorses from Kentucky with higher purses, and studs and brood mares with incentives for horses foaled in that state, and are seriously undermining the preeminence of Kentucky’s horse industry. The importance of the horse industry to Kentucky is undeniable. The question is how we maintain our competitiveness with subsidized racing and breeding in other states.
Tell us what you think. Respond to our survey on this issue at www.louisvillegop.com.
Tags: Bill Farish, bradford cummings, david williams, Jefferson County Republican Party, Jimmy Higdon, Jodie Haydon, keep, mitch mcconnell, Paulick Report, Slot machines
Posted in Kentucky, Slot machines | 28 Comments »
Thursday, November 5th, 2009
Republican State Senator Damon Thayer submits the next installment in a series of editorials regarding the ever long push for slots in Kentucky. Senator Thayer claims the best way forward is a ballot initiative that would leave the vote to the people.
Last week, the Paulick Report presented the reasons why a ballot initiative, especially the type that Sen. Thayer is submitting, will not happen in Kentucky. In what we find to be a vapid platitude, Sen. Thayer proclaims, “…it is never too late to let the people decide.”
Where do you stand?
For too long, casino gambling has dominated the debate in Frankfort to the detriment of all other issues. Governor Steve Beshear has advocated very little, if anything, beyond the expansion of gambling. Attorney General opinions throughout the years are divided. The Governor campaigned on “letting the people decide.” As recently as last year, members of House Democratic Leadership promoted a constitutional amendment to expand gambling.
The constitutional amendment that I have proposed will take the issue off the table so the Governor can focus on working with the General Assembly in a bipartisan manner to address the serious public policy issues facing Kentucky. If passed, it would allow video-lottery terminals in counties that have horse racing, with a local referendum vote. The proceeds would go to purses, breeders incentives and marketing for horse racing, and the facility operators, with the remainder sent to the state for capital projects and debt service reduction.
Members of the horse industry say that it is too late for a constitutional amendment; that it would take too long for relief to arrive. I say that time-consuming litigation is assured with “slots by statute.” A constitutional amendment is the only way that the horse industry will be able to “lock-in” the percentage of slots revenue that goes to purses. There are examples of state after state with slot-subsidized purses whose legislatures have gone back and shifted funds away from the horsemen. My proposal combined with the legislation similar to what the Senate passed during the special session in a bipartisan manner would give the horse industry not only purse protection but also immediate relief.
No constitutional amendment has ever reached the House floor, much less the Senate’s. After considerable Democratic Party infighting, the amendment that finally passed a House committee in 2008 never got a floor vote. Did the Governor never really care about letting the people decide? We shall never know because he declared the bill “dead” for the session and declined to push for a vote.
Finally, the question that needs to be answered is: do you believe that increased purses and improved wagering products and marketing can save tracks, or will it be necessary to permanently subsidize tracks? Track officials reveal themselves when my friend, Turfway’s CEO Bob Elliston, said that my proposal would “help make Kentucky racing more competitive by increasing purses but it doesn’t help reinvigorate racetracks.”
It seems that it’s not about the horse-racing, the “show,” it’s about the companies that own the tracks. They don’t want just a minimal approach to beef up purses – which they had argued previously would bring more fans and help everyone – they want rampant slots to create gambling empires. It will not be long before the horses are marginalized. My amendment would prevent this.
Some may say, too little, too late.
I say that it is never too late to let the people decide.
Tags: Casino gaming, damon thayer, Frankfort, Paulick Report, Ray Paulick, Slot machines
Posted in Kentucky, Slot machines, State Government | 28 Comments »
Tuesday, October 27th, 2009
By Bradford Cummings
Kentucky Republicans connected to the horse industry will find themselves in an interesting predicament next year. The always-pending slots issue has caused much consternation for those of us on the right that see this as an economic development issue and not a moral one. In a state with legal gambling on horse racing, a statewide lottery and an abundance of charitable gaming, the overused/misused word hypocrisy easily comes to mind when considering the social right’s argument.
And yet I have stayed silent on this issue publicly. Until recently, I was the chairman of the Jefferson County Republican Party (Louisville) while also working for the Paulick Report. It was a non-paying 40-hour-a-week volunteer position, and eventually I had to make a business choice and walked away after 16 months served to fully focus on the growth of this website. (Those of you who have served in volunteer political positions can attest it is a love-hate experience if you try to do it right.)
While not the reason I resigned, the slot machine issue is a perfect example of why my career will likely never head back in the direction of party politics. (That sound you just heard was the last shred of my political career flushing down the toilet…I sure hope we can turn the racing industry around!)
Part of the party game, Republican and Democratic, is to create a platform and get the entire machine to walk in the same direction while beating the same drum. I do not say this to disparage the process. To a certain extent, this sort of singular focus is necessary to get anything done politically or otherwise. Have you ever attempted to get a consensus among 30 people, 10 people or even you and your spouse? The concept of majority rules definitely serves its purpose. But it can also be incredibly destructive for those who feel passionately about an important issue.
And this is where I find some sympathy for the likes of state Sen. Damon Thayer, the Georgetown, Ky., Republican who plans to file legislation in support of a constitutional amendment to legalize slot machines at Kentucky racetracks. Damon is a friend of mine and from what I can tell, a good man trying to do right in a difficult position. Anyone who believes his actions are to help himself personally needs to consider a Kentucky state legislator only makes roughly $30,000 a year. I am not sure what his other work pays, but considering his talents and the fact he has a family to feed, the Senate job probably has less short term upside than his Thoroughbred interests.
Philosophically, I agree with the constitutional amendment. On large fundamental issues, the people’s voice should be heard from directly and I assume Damon’s intentions are to find an opportunity to give this issue a proper public hearing. But upon further review and especially with the details of his proposed legislation, I have to admit to being wrong. The statutory path is likely the only one to bring expanded gaming to the Bluegrass State.
Obviously, much of this rides on how the special election for Republican Sen. Dan Kelly’s now vacated seat turns out. The district has a heavy Democratic registration advantage and their candidate, Jodie Haydon, comes from the most populous region within its boundaries. The Republican, Jimmy Higdon, is well liked and will be a strong candidate but comes from a much less populous part of the region. In many ways, this race shapes up to be a mirror of the election this summer that went to Democrat Robin Webb by a slim margin. If history repeats itself, Kentucky will see a Senate that once had a 23 – 15 Republican advantage slip to a 20 – 18 margin (including one Independent caucusing with the Republicans) in little more than a year. With the commitment from Kentucky’s horsemen obvious, a strong case could be made that this slip may lie primarily at the feet of David Williams’ decision to go down swinging on the slots issue.
Assuming the worst for Kentucky Republicans, which is more likely? Republican Tom Buford continues to vote for slots as he did this year and one other Republican is swayed out of fear of an electoral minority after 2010, or an amendment passes by a margin of 23 – 15, meaning that three Democrats throw away the pro-slots momentum their party currently enjoys and allows Republicans to claim a victory for the horse industry? Anyone who believes Democrats will give up that power clearly does not understand the underbelly of the political system.
Additionally, the House would have to find eight more votes than it had this year and again ignore the historical boost of momentum Republicans would earn from this legislation. The Democrats who possess a super-majority in the House would have been more likely to publicly admit voting for John McCain in last year’s Presidential election.
Even more concerning though is the cost a referendum would put on the horse industry. Millions of dollars would have to be spent to win this referendum, millions of dollars many horse industry folks do not have to spend, especially after the performance of Kentucky’s Thoroughbred sales this year. The opposition would be well funded by social conservatives and other lobbying interests who would prefer to see Kentucky without slots. So while the slots issue polls well now, the political climate would be impossible to foretell. As they say, a year equals several lifetimes in politics.
Assuming this process was a success, Thayer’s amendment proposition requires passage of a local referendum in the counties with racetracks. Likely, most counties would agree to the local referendum but another year would pass, putting us into 2012 before slot machines could be seriously considered. That time frame doesn’t take into account the bidding and licensing process. And if my interpretation of the proposed legislation is correct, racetracks may have to compete with other potential gaming outfits to secure the franchise rights, and might end up without VLTs. While money would still be earmarked for purses, the tracks would suffer if that occurred.
But at least you don’t have to worry about that worst-case scenario happening. This would never get out of the Kentucky House. As Senate Democratic leader Ed Worley, it would be “dead on arrival.”
Tags: Brad Cummings, bradford cummings, damon thayer, Dan Kelly, david williams, ed worley, Georgetown KY, Jefferson County Republican Party, Jimmy Higdon, Jodie Haydon, john mccain, Kentucky, kentucky democratic party, kentucky republican party, Louisville, Paulick Report, Republican Party, Slot machines, tom buford
Posted in Kentucky, Slot machines | 13 Comments »
Wednesday, September 30th, 2009
KEEP just released an editorial in response to KY State Senator David Williams’ criticism of the Thoroughbred industry’s desire for alternative gaming in Kentucky. Are you moved by this editorial? Where do you stand on the slots issue and have any of the recent editorials changed your mind one way or the other? The Paulick Report wants to know. - Bradford Cummings
In a recent response to an editorial by Bill Farish entitled, “Gambling, Not a Partisan Issue,” Sen. David Williams continued to attack Kentucky’s horse industry in a misguided attempt to divide and conquer horsemen.
What Sen. Williams doesn’t understand is that his attacks only further cement the unity among our industry to seek alternative gaming at racetracks. The horse industry is more united today than at any time in our history because we understand the enormity of the threat posed to our competitiveness. We live it every day as we watch our racing dates eliminated, our purse money decline and owners and trainers ship horses to states where purses and breeder incentives are enriched by gaming revenue.
Sen. Williams began his editorial by saying expanded gaming is “bad economic policy for the state and for the horse industry.” I firmly disagree. Isn’t it bad economic policy for the state to stand by while its signature horse industry declines because we lack the competitive tools other states are using to capture what Kentucky already has? Kentucky has a horse industry that is world-renowned for its product. It generates a $4 billion economic impact. It supports 100,000 jobs statewide. But in the end, Kentucky’s bond with the horse cannot be measured by mere economics. It is that intangible that makes Kentucky unique.
Let’s take Sen. Williams’ points one by one.
Sen. Williams says, “expanded gambling will flood Kentucky with funds that will skew our body politic.”
In his response, Sen. Williams calls into question the Farish family’s affiliations and makes mention of political corruption in other states where gaming is allowed. This personal attack on the Farish family is an all-time low point in the gaming debate and will not go unanswered.
The Farish family has a long history of public service and staunch support of the Republican Party. William S. Farish served as United States Ambassador to the Court of St. James under President George W. Bush. His son, Bill, served as a personal aide to President George H.W. Bush. Both father and son are lifelong horsemen who are actively involved in all aspects of Thoroughbred racing and breeding. From their development of Lane’s End Farm into one of the world’s premier breeding operations, to their service with the American Horse Council, the Breeders’ Cup, The Jockey Club, the Kentucky Thoroughbred Association, the National Thoroughbred Racing Association and Thoroughbred Owners & Breeders, their commitment to the horse industry cannot be questioned.
Sen. Williams says that once slots arrive, horse owners and trainers will get the short end of the stick.
If alternative gaming is not growing purse money at racetracks in those states where it is allowed, then why are Kentucky horsemen shipping to Pennsylvania, Indiana, West Virginia and Louisiana, among others?
Total purses in Kentucky have been stagnant or have declined since 2001. In contrast, Thoroughbred and Standardbred purses in Pennsylvania jumped nearly 40 percent from 2007 to 2008, the first full year of gaming operations. Indiana’s Hoosier Park just announced its second purse increase of the current meet. Louisiana racetracks such as Evangeline Downs and Fair Grounds are enjoying resurgence. Gaming revenues are up 5.5 percent at Florida’s Gulfstream Park compared to 2008; while Calder Race Course will open its gaming operation in 2010.
The horse industry’s plan to authorize video lottery terminals (VLTs) at Kentucky racetracks was the most comprehensive show of support for the entire horse industry—both racing and non-racing breeds—ever to be introduced in the United States. Though purse supplements for Standardbreds, Quarter Horses and Thoroughbreds are the most visible allocation, revenue would be broadly distributed to enhance many Kentucky equine breeds and related programs.
Gaming funds would expand the Kentucky Breeders’ Incentive Program (KBIF), which offers economic incentives to encourage ownership of all Kentucky-bred horses, even non-racing breeds. As an example, since it’s inception in 2005 the KBIF has fueled dramatic growth in Kentucky’s Quarter Horse industry, attracting 600 new Quarter Horse stallions, more than 2,000 mares and an influx of new Quarter Horse farms.
Our proposal also dedicates revenue to promote the health and welfare of horses by funding new equine facilities and riding trails; it will enable improvements to the backside and stable areas at racetracks; properly fund the Kentucky Horse Racing Commission and repeal a sales tax on feed and equipment for horses—an exemption already bestowed on other Kentucky livestock.
Though he would like to convince you otherwise, Sen. Williams’ plan is not a “horse industry” proposal. Under it, he addresses only purse money; contributing nothing to the KBIF or non-racing breeds. His proposal would redirect to the horse industry $19 million in existing tax revenues that currently go to the General Fund, which is already suffering a shortfall. He would place a 10-cent tax on lottery tickets, so your $1 lottery ticket would cost $1.10. The Kentucky Lottery Commission estimates this tax would result in significant lost lottery sales, which would adversely affect our children since all the funds go to funding the Kentucky Educational Excellence Scholarship (KEES) program.
Sen. Williams says slots will not “save” Kentucky’s budget.
Kentucky’s horse industry has never made the claim that expanded gaming would be the silver bullet to Kentucky’s budget shortfall. However, what our proposal would do is generate at least $700 million in new revenue, including more than $200 million in new tax dollars for the state, and be a source of new jobs and new capital construction.
Sen. Williams says the horse industry is beset with problems endemic to the industry itself.
The horse industry competes with an explosion of casino gaming nationwide. Today, 36 states in the continental United States permit commercial, Indian and/or racetrack casinos.
Kentucky racing is battered by casino gaming forces on two fronts. First, we directly compete with six Indiana riverboats on our border, where $1.44 billion was wagered in 2008. Casinos also line Kentucky’s border with Illinois, Missouri and soon Ohio. These casinos, which include the nation’s largest riverboat, the Hollywood Casino near Lawrenceburg, are situated to take advantage of Kentucky’s major population centers.
Even more damaging to our competitiveness, each of the 12 racing states nearest to Kentucky—Arkansas, Illinois, Indiana, West Virginia, Louisiana, Florida, Maryland, Delaware, Pennsylvania, New Jersey, New York and Ohio—are using expanded gaming to strengthen their horse industries.
We don’t view alternative gaming as a long-term fix for Kentucky’s horse industry. Instead it will provide us with a short-term infusion of revenue we can use to spark economic development in our industry. These funds will help us compete, in the immediate future, by allowing us to raise purses and preserve Kentucky’s year-round racing circuit, renovate infrastructure, explore new marketing ventures and employ new technologies in an effort to attract new fans.
Alternative gaming at Kentucky’s racetracks will not change the behavior of Kentuckians. They already spend more than $670 million at riverboat casinos in Illinois and Indiana alone.
Sen. Williams, however, continues to stir the pot by stating that Kentuckians will have to “gamble” $11 billion to produce the $1 billion net win the horse industry proposal projects. As Sen. Williams knows, this is absolutely not true. He conveniently misuses this figure to confuse and concern. In reality, “churn”—whereby players repeatedly use their winnings to continue play—will account for most of that $11 billion gross wager. We are not asking any Kentuckian to gamble a single dollar that they are not already gambling. We are, however, asking that if they choose to gamble, they do it in Kentucky to help our own people. We don’t want a government subsidy! What we want is a level playing field. If we get this we will out-work and out-produce our competition and remain the “Horse Capital of the World”!
Tags: American Horse Council, Bill Farish, Breeders' Cup, david williams, Expanded Gaming, George H. W. Bush, George W. Bush, Jockey Club, keep, KEES, Kentucky, kentucky thoroughbred association, NTRA, Slot machines, TOBA, William S. Farish
Posted in Kentucky, Slot machines, Thoroughbred Business | 41 Comments »
Friday, June 12th, 2009
Trainer Bob Baffert, elected to the National Museum of Racing Hall of Fame this year, is a native of Arizona who bases his multiple Eclipse Award-winning stable in Southern California. But he’s no stranger to Kentucky, having won the Kentucky Derby three times in addition to the Kentucky Oaks, the Blue Grass Stakes at Keeneland and many other races at Kentucky racetracks. His longtime client, Mike Pegram, got his start in racing by attending Ellis Park in western Kentucky. Pegram is among many clients that Baffert has represented while spending millions of dollars on Kentucky-bred yearlings and 2-year-olds in training at sales in the Bluegrass State over the past 20 years.
Because of his concerns for the current state and the downward direction of Kentucky’s Thoroughbred industry, Baffert wrote the following letter, sending it to Gov. Steve Beshear, all members of the Kentucky state Senate and a number of state Representatives. He told the Paulick Report he was not solicited by any individual or organization to write the letter, but approved our request to republish it here. – Ray Paulick
* * *
I am a Thoroughbred horse trainer. I don’t live in Kentucky, but I spend a good amount of time in your fine state throughout the year and it’s here where I have enjoyed some of the proudest, grandest moments of my life. As I watch racing in your state diminish, I am appalled at the lack of interest or concern on the part of legislators in the Bluegrass…the "Horse Capital" of the world.
This is an industry that generates over four billion dollars to your state and brings in another nine billion dollars in tourism. That’s not including the hundreds of millions of dollars from the Kentucky Horse Park and events such as the Kentucky Derby. Racing in your state directly or indirectly employs more than a hundred thousand workers. That translates into hundreds of thousands of people and their families who depend on it for a living. Over the past several years, I have seen many of our wealthiest horse owners leave my home state of California for the bluegrass of Kentucky. They bring to the Commonwealth a multitude of resources. How can you allow an industry of this magnitude to fail?
The world is ever-changing. Horse racing is no exception. What once worked for an industry must be tweaked or, in some cases, totally revamped. Alternative gaming (i.e. slots) in neighboring states is killing racing in Kentucky. That is fact. Millions of dollars are being spent in areas, which, in many cases, are just a stone’s throw away from Kentucky soil. While there is much work to be done within our industry, you and your fellow lawmakers have the power to give it a fighting chance. As stewards of the state’s economy, it is your duty. Horse racing has been too good to Kentucky for you to turn a blind eye to its plight.
Time is of the essence. If the legislature doesn’t act swiftly, Kentucky will not resemble the state you or your children grew up in. Pristine horse property will be abandoned, or worse yet, replaced by concrete. Once viable, thriving communities will shrink or vanish as their economies disappear. The state will find itself supporting many of the hundred thousand hard working men and women who will be left with no way to support their families. Public works projects will suffer as tax dollars wither away. And then there’s the challenge of caring for the three hundred twenty thousand displaced race horses. Have any ideas?
Rich in history and steeped in tradition, Kentucky has long been the bastion of Thoroughbred racing in America. It should be looked upon not only with a sense of pride, but as a vital and irreplaceable staple of your economy. Racing is not asking for a handout, but simply the tools to compete in a changing, highly competitive market. Your state’s signature industry is fighting for its survival. What are you going to do to help?
Respectfully,
Bob Baffert
Arcadia, CA
Tags: Bob Baffert, churchill downs, ellisl park, Horse Racing, Keeneland, kentucky derby, kentucky horse industry, kentucky's signature industry, mike pegram, Paulick Report, racinos, Ray Paulick, Slot machines, steve beshear, vlts
Posted in Kentucky, Slot machines, Thoroughbred Business | 39 Comments »
|
|
