Survival of Racing in Some States Depends on Slots

Thursday, August 28th, 2006 (Greg Melikov)

Las Vegas-type video slots are spreading to racetracks around the country, but not without a fight.

For example, it took many years for Florida to become the 12th state to allow the video slot terminals (VDTs), but only in Broward County where voters approved a referendum.  Gulfstream Park is one of four pari-mutuel facilities that can install up to 1,500 machines.

The racetrack has announced it will start with 500 VDTs placing them in a special section of its new clubhouse. “We hope to open the Gulfstream Park slot facility in October,” said Blake Tohana, executive vice president and chief financial officer of Magna, the parent company that operates tracks across North America.

Pennsylvania is next in line to hand out conditional licenses to six racetracks to operate VDTs before permanent ones are issued early next year.

However, several states have run into stiff opposition from officials to install video slots: Kansas, Ohio, Massachusetts and Texas.

The Lone Star State is one example of where horse racing is a do-or-die situation. Why? Because neighboring states are luring bettors and horsemen to their tracks that offer Las Vegas-style gambling, mainly VDTs.

The reason: lost revenue. It appears if Texas lawmakers don’t do something about it the racing industry might not survive.

“It’s pretty simple,” says Retama Park CEO Bryan Brown. “Surrounding states, because of their alternative gaming, are taking a portion of revenue and dedicating it toward racing purses. As that happens, we have fewer horses and lesser horses in Texas. That means the sport is deteriorating here.”

That also means neighboring Louisiana, Oklahoma and New Mexico are benefiting big-time. They offer purses as high as 300 percent greater than what Retama can afford to pay explains track publicity/marketing director Doug Vair. Texas track operators are “in a fight for survival.”

Vair and Brown say Texas tracks are fighting for survival and need relief from state lawmakers – and soon. It would have to come from legalization of VDTs similar to slots that tracks in other states have to attract bettors and horsemen.  

Proponents claim VDTs would generate billions of dollars and allow Texas tracks to compete with neighboring states. Critics argue VDTs would open the state to more gambling-related concerns.

Nearly 2-of-3 respondents in a recent online San Antonio Business Journal poll agreed that the racing industry needs help. Specifically, 64 percent favor lawmakers legalizing VDTs at tracks.

“I would rather keep the (gaming) money in Texas than see it spent in other states,” one person commented.

“If (VDTs) aren’t allowed, it could lead to the demise of the Texas horse racing industry,” another respondent said.

Thirty percent were against legalizing VDTs. “Gaming is a cancer on society,” one opponent said. “There is no good result from gambling activities.”

Five percent were undecided.

One study predicted that authorization of VDTs at racetracks would create more than 26,000 jobs and boost state revenue $1.2 billion annually.

However, time may be one of the industry’s biggest enemies, Vair says. “Some tracks are on life support. We have become lean and mean as we can in staffing and production.”

Addition of VDTs could result in major changes for Retama, he points out, leading to additional hotels and restaurants in the area.

“Without lawmakers’ help, all bets may be off,” Brown says. “Will the industry go away (in Texas)? It sure could.”

Back to the horse racing articles