CDI Takes Financial Hit in Florida Racing Dates Battle
The South Florida racing wars will enter their sixth month soon, and Churchill Downs Inc. has paid a steep price for the lack of agreement between the track it operates, Calder Race Course and Casino, and Gulfstream Park, which is owned by the Stronach Group. For the first time in history, the two Miami-area tracks have been operating head-to-head on weekends since July, with Calder racing three days a week and Gulfstream on Fridays and Saturdays.
In a recent third-quarter earnings call, Churchill Downs Inc. chief financial officer Bill Mudd said the company's racing revenues were down 19% and attributed $14 million of the decline to Calder's competition for both live racing and host status for simulcasting into Florida. In previous years, Calder benefited as simulcast host for all of Florida during its live meeting throughout the late spring, summer and fall. That revenue is now divided among Calder, Gulfstream and Tampa Bay Downs, the latter of which defined itself as operating a “year-round” meeting by holding a single race-day on the first and last day of the fiscal year.
In that same earnings call, Mudd said the Florida legislature's Joint Administrative Procedures Committee issued a letter to the state's Division of Pari-Mutuel Wagering (DPMW) questioning whether Gulfstream should qualify as simulcast host because of a statute defining a “meet” as three days of live racing each week.
“We will pursue the recovery of the lost hosting revenues since the dispute started on May 7 using all means available to us,” Mudd said.
The DPMW, meanwhile, held a hearing Nov. 7 on a proposed new rule that would define a race meet as one with “at least two days” of on-track live racing.
That proposed rule was challenged in a letter to DPMW director Leon Biegalski from Marjorie Holladay, chief attorney for the Joint Administrative Procedures Committee. Citing chapter 550 of Florida statute that defines “live racing” as no fewer than eight races (with limited exceptions) for “each of a minimum of three performances each week,” Holladay asked Biegalski how the proposed two-day rule “does not contravene” Florida law.
The DPMW has until Thursday to receive written comments on the proposed rule defining a meet as two days. A spokesperson for DPMW said Biegalski will then “evaluate and determine whether it is appropriate to have an additional hearing, proceed with the next step and/or publish a notice of change in the rule-making process.”
In the meantime, Churchill Downs found a silver lining in the storm clouds. Mudd said the company expects to make up some of the lost revenue in the first quarter of 2014 when Calder plans to race 39 days during a period it has traditionally been closed and Gulfstream has been open.