Sunday, May 16, 1999

Casino talk worries tracks


Ideas not quite what owners had in mind

BY JANE PRENDERGAST
The Cincinnati Enquirer

        The more Gov. Paul Patton talks about his casino ideas, the more nervous some of Kentucky's horse industry gets.

        When the idea of casinos first was floated years ago, it was as a way to attract more people to places like Florence's Turfway Park — put them at the tracks and bring all those casino-goers to the struggling race courses.

        But that plan didn't fly through the legislature. And the version Mr. Patton is pitching now includes using some of the revenues from as many as a dozen or more casinos in the state to help out everything from neighborhood development to nature preservation. He says putting casinos in hotels near convention centers could significantly boost the state's convention and tourism business.

        That's what leaves people involved in the state's signature horse industry wondering where they might fit and whether new casinos not connected to the tracks won't simply create more competition for a business already struggling with falling attendance and against competition from nearby Indiana riverboats. They aren't sure, either, what “horse industry” means — what percentages would actually go to race tracks, as op posed to other aspects of the business.

        Track officials are concerned, but are hesitant to say just how much yet.

        “We're really just looking at it, reviewing it,” said Tony Terry, spokesman for Churchill Downs in Louisville. “And as things become more concrete with it, then we'll be prepared to make a statement on it.”

        Developer Jerry Carroll, former owner of Turfway Park who worked with Churchill five years ago to pitch casinos to lawmakers, is much more direct: Putting casinos anywhere but at the tracks would be devastating to places like Turfway.

        Turfway Park is in a unique position as the debate unfolds. Sold in March to a partnership of Harrah's, Dreamport and Keeneland, the track is running these days without an on-site leader since former President Mark Simendinger left two weeks ago. The companies are conducting a search for a new boss.

        Keeneland President Bill Greeley, whose track in the past opposed casinos, continues to say he doesn't know if or how that position will change in light of the new Turfway partnership or the governor's comments. Dreamport's vice president for business development, Bob Vincent, said the partners have not met to formalize a stance but that they are following the governor's comments.

        What Mr. Patton's talking about now does include direct ing some of the would-be casinos' proceeds to the horse industry. But being government-subsidized is not the same, some say, as using the popular gambling houses to bring more folks into the fold of the business for which Kentucky is recognized worldwide.

        “You would have to dedicate a certain amount again to the horse racing industry,” the governor said in an interview with the Enquirer. “And the number I've picked out is 25 percent, which I think would be a substantial amount of money.”

        He's also talking about allowing tracks to install video lottery terminals.

        “If VLTs are at the race track, they would be operating it and they would make a profit, which they would have to put into the purses as part of it,” the governor said. “And then we would just tax that.”

        The governor says he's simply trying to provoke debate. Any casinos or VLTs still would have to be approved by the General Assembly, which convenes in January.

        The idea of casinos subsidizing horse tracks is not unique. Hoosier Park in Anderson, Ind., gets more than $5 million a year, compiled from a fraction of every paid admission at the state's floating casinos. That has allowed the track to boost its purses, which helps it attract better horses.

        But that scenario is vastly different than in Kentucky — Indiana has just one track. Kentucky has four.

        Hoosier Park officials are currently battling state lawmakers to keep their share of the riverboat casino revenues. Some legislators want to cut the percentage back now that the boats are generating so much. The Argosy casino in Lawrenceburg has counted more admissions since May 1998 — 5.8 million — than any other riverboat casino in the country.

        Hoosier Park is owned by a subsidiary of Churchill Downs. The track also owns Ellis Park in Henderson, Ky., which is across the river from the riverboat casino in Evansville, Ind. That means Churchill gets revenue from the state of Indiana at the same time that it experiences at Ellis Park the same kind of competition for bettors' dollars as tracks like Turfway.

        As concerned as Kentucky horse track officials are, Mr. Patton still says his first objective “would be to ensure the survival of horse racing and the thoroughbred industry in Kentucky — the survival and prosperity.”

Patton courting controversy



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