Monday, September 03, 2001
Turfway future in doubt
Race track could be razed for development
By Patrick Crowley
The Cincinnati Enquirer
FLORENCE Two days before Turfway Park opens for its 42nd year of thoroughbred racing, its president predicts the track could close within 10 years if fortunes don't improve.
Unless track operators can find a way to reverse declining revenues and attendance over the next several years, Robert Elliston said the 197-acre facility might eventually be razed and sold as a development site.
We'll be here next year and we'll be here five years from now, Mr. Elliston said. And we may be here 10 years from now if nothing is done.
But will we be here 20 years from now? he asked. I would be extremely pessimistic about that. There's a long heritage of racing in Northern Kentucky and Greater Cincinnati. We have been a part of that and I'd hate to see that go away.
LOSING THE HANDLE
The amount of money bet at Turfway Park known in the industry as handle has dropped 43 percent since casino riverboats opened in southeastern Indiana in 1996. Here is a look at Turfway's total annual handle since 1995: |
1995: $150 million
1996: $145 million
1997: $95 million
1998: $90 million
1999: $87 million
2000: $86.2 million
Source: Turfway Park
Turfway Park opens the 23-day fall racing meet Wednesday at a crossroads, its livelihood threatened by blistering competition from riverboat casinos, aggressive moves by racetracks in other states and state taxes higher than other businesses pay.
Turfway has seen the amount of money bet at the track drop by 43 percent since 1996, when the first of three riverboat casinos opened on the Ohio River in southeastern Indiana.
Other tracks, including Churchill Downs in Louisville, also have seen wagering and attendance fall since the casinos opened, most notably Caesars' riverboat, just west of Louisville.
But the industry also is facing increased competition from other states that are using video slot machines and computerized poker to attract bettors and larger purses to entice thoroughbred owners away from Kentucky tracks, Mr. Elliston said.
Because less money is being bet at Turfway, the track cut $150,000 from the purses for the Sept. 22 Kentucky Cup Day of Champions, one of the track's biggest racing days.
Tax relief sought
A coalition recently was formed to seek help from state lawmakers. The alliance includes Turfway, Keeneland racetrack in Lexington one of Turfway's owners Churchill Downs, horse breeders, horse owners and harness track operators.
Mr. Elliston predicted that by mid-October the coalition will have legislation ready for the 2002 session of the Kentucky General Assembly, which begins in January.
IF YOU GO
What: Opening of Turfway Park's 23-day fall season Wednesday. |
When: Races are held Wednesday through Sunday. Post time is 7 p.m. weekdays and 1:10 p.m. on weekends.
Cost: $3 admission; free to members of the Fast Track program. (Applications available at the track.) Parking is free.
Directions: Take Interstate 75 to Exit 182 (10 miles south of downtown Cincinnati). The track is less that one mile west of the interstate.
Information: (859) 371-0200.
What will be included in the legislation hasn't been determined but at least one portion of the proposed bill will deal with tax relief, Mr. Elliston said.
The taxes and fees paid by the Kentucky racing industry last year totaled $25.5 million, according to Alex Waldrop, president of Churchill Downs.
California, Florida and Illinois are among the states that have provided tax breaks to tracks struggling to compete against casinos, he said.
We are facing some of the biggest challenges in our history, said Mr. Waldrop, whose track plays host to the Kentucky Derby each May.
The industry may ask lawmakers to lower the tax rate on thoroughbred tracks, Mr. Elliston said.
The top corporate income tax in the state is 7 percent, Mr. Elliston said. Our effective rate is 19 percent.
State Sen. Marshall Long, D-Shelbyville, said there is a good possibility the legislature will move to lower the industry's taxes.
Lawmakers also expect the industry to revive its call for the legislature to approve video lottery terminals, which allow track bettors to play casino-style games on a computer screen.
The popularity of riverboat gambling has eclipsed horse racing here and in other other parts of the country.
In 2000, $614 million was bet on horse racing in Kentucky, $15 billion nationwide.
At Indiana's 10 riverboats in 2000, total wagering reached $22.3 billion.
Mr. Elliston wouldn't comment when asked whether gaming devices will be included in the legislative package. But lawmakers said that will be a next-to-impossible sell in the General Assembly.
I don't see how video lottery terminals would pass the Senate, Mr. Long said. The horse people are making their pitch, but I don't hear much from constituents in my area about expanded gambling.
Other states including Iowa, West Virginia and Delaware have allowed racetracks to install gaming devices, while Ohio, Maryland, New York and Pennsylvania are considering it.
Patrons at Turfway's Race Book, where customers can bet on races from around the country simulcast on banks of video screens, said they would spend more time at the track if they could gamble between races.
I would come a lot more often because I do like to go to the gambling boats over in Indiana, said Pat Good, 51, of Florence, who visits the track about twice a week. It would be a good idea to combine horse racing and gambling because so many people like both.
I don't know why they don't allow (video gambling). It's gambling, whether it's horses or casinos, said Bob Roberts, 29, also of Florence.
Tracks outside of Kentucky, in cluding in West Virginia and Illinois, also are pumping up their purses to attract the best horses. Mr. Elliston said that in some cases the purses are three times what Kentucky pays out.
No local ownership
Turfway is taking aggressive steps to draw customers, including:
Targeted marketing through the Fast Track program, which uses an ATM-type card to track a bettor's habits. The year-old program has 7,500 members and allows Turfway to market based on a customer's behavior.
Investing more than $2.5 million in improvements for customers, horse owners and trainers, including renovations and new construction along the track's backside, where the horses are kept.
Having special days geared toward families.
Complicating Turfway's future, however, is the fact that it no longer has local ownership or any particular loyalties to the region.
Three years ago, former owner Jerry Carroll, credited with turning the track from a run-down, second-tier course to a top-notch thoroughbred facility, sold Turfway for $37 million to a partner ship that includes Keeneland, casino operator Harrah's and Dreamport, a subsidiary of lottery operator GTECH.
Keeneland says it is committed to the track as a way to preserve horse racing dates in Kentucky.
But given Turfway's location just off Interstate 75 in a hotbed of commercial and retail development the owners might one day decide they can make more money selling the land than operating a racetrack, said Bob Vincent, vice president of business development for Dreamport.
Mr. Vincent said Turfway has been profitable, but he wouldn't reveal specifics.
Dreamport considered selling its stake last year but decided to stay in the partnership.
The return we're getting on the investment faces substantial pressure, Mr. Vincent said. Turfway faces some significant challenges ... and you always have to assess if you are getting a reasonable return on your investment.
The Louisville Courier-Journal contributed to this report.
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