We all want Racino’s. But the deal has to be fair.
By G. Leek & J.C. Trevino
Racinos are a mixture of a racetrack and a casino. Right now with the way the economy is, adding slot machines at racetracks may be the only way to get the state’s budget where it needs to be-- a necessity in Illinois--a necessity in racing.
- 2009…. 21.4 million in purses paid.
- 2010…. 11 million in purses projected to be paid.
Negotiations are going on right now to change this down cycle—that has been going on for fifteen years since the beginning of RECAPTURE. The introduction of slot machine revenue will revive the horse industry with fair legislation.
Just a little history:
In 1994, Polk County, who had just become the owner of the bankrupt race track, Prairie Meadows in Iowa, invested $26 million to convert the track's clubhouse into a casino and installed 1,100 plus slot machines within the facility. The racino opened on April 1, 1995. After a year, slot machine revenues totaled $119 million, enabling Polk County to pay off the $27 million bond issue that paid for the clubhouse casino conversion and withdraw the track's original $38 million plus bond issue 17 years early.
In 1996 gaming legislation in Delaware allowed for racetracks to have video lottery machines. Harrington Raceway operates 1,400 plus full service machines, whereas Dover Downs has over 2,000 slot machines in their facilities. Harness racing is contested at both racetracks. Funds generated from the slot machines are added to the horsemen purse account-- --this has resulted in $110,000 to be dispersed in purses nightly, a gigantic adjustment from 1989 when only $20,000 was circulated without the revenue of slot machines through a ten to fourteen race program. It also supports the agriculture part of the economy. Vets, farmers, blacksmiths, tack shops, feed companies as well as horse breeders and many others -- benefit from a healthy horse industry. As the horse industry grows, so does the local community-- restaurants, retailers, grocery, and gas stations, along with local accommodations all would benefit from a revived horse industry. In all, that's more than 50,000 jobs plus revenue that stay in the state. However the support of voters and the gaming legislation is needed before any of this can become a reality in Illinois.
Illinois horsemen and racetracks executives are negotiating a slots-at-tracks bill.
Illinois Harness Horsemen’s Association president Dave McCaffrey tells us “Two years ago, speaker Madigan introduced bill HB4194 and everybody-horsemen along with racetracks - agreed with it, unfortunately it didn’t make it to the general assembly.”
HB4194 included the following for the racing industry.
· 15% adjusted gross revenue to horsemen’s purse account
· 2.25% to breeders funds for county and state fairs
· $4 million for colt stakes and the return of the million dollar bonus
· New money for horsemen’s healthcare needs
· Elimination of recapture
· Evens splits at OTBs and even splits on breakage
· Preservation of live racing with a minimum of 3500 live races per year
· Mandated track expenditures on marketing and promotions
· Fairmount Park would be mandated to get Harness race dates.
Last year, after legislation was passed to allow VLTs (video lottery terminals) at 15,000 bars across Illinois owners, many communities decided they did not want gambling on every street corner and passed ordinances to block the installation of the VLTs. Illinois was left to come up with a different option to get the projected $500 million to $1 billion in tax revenue that the state needs. Horsemen and tracks together suggested to legislators that placing slots-at-tracks might replace the lost VLT revenues. Instead of using the existing agreed bill – HB4194 - track owners wrote and had introduced their own bill which is ridiculously lopsided in their favor.
Known as the “Burns Bill”, the tracks plan was to drastically reduce benefits to both the horsemen and the State, and to keep those revenues for themselves.
“While we desperately need a slots-at-tracks bill to save racing in Illinois, the Burns bill is a bad bill for horsemen”, said McCaffery. “The Burns bill is clearly going to benefit racetrack owners more then the horsemen.” Dave continues “Horsemen have no problem with the racetracks making a profit but the intention of the bill is to save racing, not make racetrack owners wealthier then what they already are. There has to be a middle ground where everyone flourishes. ”
The Burns bill includes the following:
· 11% adjusted gross revenue to horsemen’s purse accounts
· breeders awards that would be paid from horsemen’s purse account
· allow the tracks to phase out recapture over 4 years
· allow the tracks to keep the uneven splits at the OTB’s and uneven breakage
· no true live racing guarantees
· horsemen would pay healthcare costs
“Ideally, what I'm looking for in a slots bill is for a way to take harness racing into the next 20 plus years and make it a thriving entertainment business that employs thousands of people with "green" jobs that stretch across the whole state of Illinois. Settling for a bill that sustains the business for only a few years, is ultimately the death of the game that we all love," McCaffrey said
These are the flaws the IHHA President along with fellow committee and IHHA Members say exist.
· Breeders’ awards are currently $3.3 million annually. The burns bill would require horsemen to pay this from their purse account
· Off Track splits range from 13% to 20% of the take out for track owners, while 4.75% will be the only absurd amount received by the horsemen.(Even split would be fair.)
· VERY IMPORTANT: the 90% minimum required racing dates for the next year racing season means in a matter of time racing can almost be legally eliminated. (A specific date in time, not year to year.)*
“They say they are getting rid of Recapture but all they really are doing is transferring it to horsemen by making us pay the breeders awards and other items they now pay.” McCaffrey said. “The racetracks say we have nothing to worry about with race dates, but that’s exactly what they told us at Quad City Downs & Fairmount Park. It’s been over ten years since either track has had harness racing.”
“In Indiana, Pennsylvania, and New York race track owners get 47%, 45%, and 45%. Illinois racetracks want to keep 66%.”
“That’s not fair for horsemen,” said McCaffrey.
Today, 14 states -Alabama, Arkansas, Delaware, Florida, Indiana, Iowa, Louisiana, Maine, New Mexico, New York, Oklahoma Pennsylvania, Rhode Island, and West Virginia – have racinos.
Let’s hope Illinois can be the 15th State to permit Racinos if we want a Horse Industry here in Illinois in the future. But first the deal has to be fair………….
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