Keeneland Makes Calculated Moves With Quarter Horse Venture
When it was reported earlier this month that Keeneland was pursuing a new deal in Eastern Kentucky, surely it raised a few eyebrows.
Keeneland and Quarter Horse racing? Keeneland and Instant Racing?
But to Keeneland's brass, there was nothing strange about one of the jewels of the Thoroughbred industry buying a rural harness track and reinventing it as a Quarter Horse/gaming venue.
“Keeneland is interested in looking at every possible way we can help our industry and ourselves, to get money into the places it needs to be,” said president and CEO Bill Thomason.
In this case, that means teaming up with a Nevada-based casino company to purchase the Thunder Ridge harness track in Prestonsburg. Keeneland and its partner, Full House Resorts, plan to level the track and build a new one about 100 miles southwest near Corbin, Ky., close to the Tennessee border. The deal is contingent upon either legislation that legalizes Instant Racing in Kentucky or the resolution of an ongoing legal challenge to the slot-like machines already in place at Kentucky Downs and Ellis Park.
Keeneland has proposed to the Kentucky Horse Racing Commission about a dozen race dates for Quarter Horses during the summer and an Instant Racing operation similar in size to the 300 machines at Kentucky Downs.
“We've been very conservative watching the historical racing product since it was approved,” said Thomason. “We've watched the success that Kentucky Downs has had with it, and we've come to the belief that it's a viable product.”
While building a new racetrack is an uncommon event these days, Keeneland's move would be similar to what Penn National Gaming has done recently in neighboring Ohio. As PNG lobbied Ohio lawmakers to approve casino gaming and slots at racetracks, the company purchased two tracks in the state, planning to relocate both of them if expanded gambling was approved. The lobbying effort succeeded, and PNG is now moving forward with plans to relocate Beulah Park and Raceway Park to areas not served by the company's stand-alone casinos in Columbus and Toledo.
“What Penn National did was to acquire multiple licenses, for both tracks and stand-alone casinos,” said Tim Capps, director of the University of Louisville's Equine Industry Program. “They didn't want to duplicate casinos in the same market. It was pretty creative thinking.”
Capps said with this new deal, Keeneland also has its eye on the possibility of expanded gambling, if it ever gets legislative and public approval in Kentucky. While the south-central part of the state isn't a big market, a gaming venue in Corbin could pull people from Knoxville, Tenn., less than 90 minutes away.
“By the time gaming arrives, since they have a partner that is a gaming company, they'll be in a commanding position,” Capps said. “I think their main goal is that no one comes into that area and does the same thing.”
Thomason has said if the deal to purchase Thunder Ridge goes through, Keeneland would also seek to partner with the harness track in Lexington, the Red Mile, to build an Instant Racing parlor there.
“Yes, of course, Keeneland is interested in protecting our Lexington market,” said Thomason. “But we're also trying to use the Keeneland model that we can better the industry. I think there's nothing but a win-win for everybody involved.”
Thomason said Keeneland is in the process of analyzing the market so that the new track and gaming venue in the Corbin area could be scaled for a successful launch.
“We're taking a concept here, and we're trying to build it from something that's small and reasonable. We're trying to create reasonable expectations, but we also want to create a product that we can grow.”
Keeneland has also started talks with horsemen about models for purses and revenue sharing. Since Kentucky Downs installed Instant Racing about a year and a half ago, and Ellis Park six months ago, the two tracks have earned roughly $16.5 million from the machines and distributed around $2.5 million in breeders' awards and purses.
In the Lexington Herald-Leader's initial report about the Thunder Ridge deal, state Senate Majority Floor Leader Damon Thayer (R-Georgetown) told the paper the new venue could stimulate Quarter Horse breeding.
“I think Keeneland should be lauded for its desire to take the Keeneland model and bring in a new partner and build a new racing and simulcast facility in Kentucky,” Thayer said. “I believe there is a market for Quarter Horse racing in Kentucky.”
The University of Louisville's Tim Capps said while Quarter Horse racing has never really gained a toehold in the Eastern United States, the complement of multi-breed simulcasting and Instant Racing could make it work.
“With Keeneland backing it, you could make a case for them being able to do it with short meets, getting people to come out,” Capps said.