Big purses can't stem horse racing decline

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Officials in many states find live betting is down

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Associated Press

Posted Monday, June 25, 2007

Maryland horse racing officials have repeatedly said that slots are needed to breathe new life into their industry. They said competition from Delaware, West Virginia and Pennsylvania, where expanded gambling subsidizes purses and attracts the best horses, hurts Maryland.

But the experience of those states demonstrates that slots have done nothing to attract more people to horse racing. "There's no correlation," said George Sidiropolis, the West Virginia Racing Commission chairman. "It's inverse, in fact."

In Delaware, for example, 11 years after that state allowed slot machines at its racetracks, hardly anyone is there to watch the horses, much less bet on them.

One recent day, fewer than a hundred people were sprinkled among thousands of empty seats at the track. Statistics show that live betting on thoroughbred horse racing in Delaware has dropped by 40 percent since slots were legalized in 1996.

Live attendance may be down at the racetrack, but the slots are giving the horses a big financial boost, said Rep. Vincent Lofink, R-Bear, chairman of the House gaming committee. "Purses are up dramatically with slots and as a result there's more of an incentive to invest in horses," he said. "Slots may have hurt the attendance, but it has helped the quality of the horses."

Online betting and simulcasts have taken a much bigger bite out of live horse betting than slots, said Bessie Gruwell, executive director of the Delaware Thoroughbred Horsemen's Association.

"I don't believe that slot players are taking money away from the horse racing," said Gruwell. "I think it's a different customer altogether."

Harrington Raceway general manager Jim Boese said he was not familiar with the 40 percent figure, adding he hasn't noticed a decline in horse betting since he came to Harrington Raceway in 2000. As to whether the addition of slots impacted the race track, he said, "I can't say that it does or it doesn't. When I came to Harrington, the slots were already functioning."

Other states have figures similar to the 40 percent decline on live betting reported in Delaware. Six months after slots went online at Philadelphia Park in Pennsylvania, betting was down by 20 percent. West Virginia's wagering handles went up sharply a few years ago when the state's tracks began broadcasting their races nationally, but betting has since leveled off and begun to decrease.

In Maryland, pressure has been growing for months as many lawmakers, particularly in the state Senate, have looked at slots as a way to reduce the $1.5 billion budget deficit Maryland faces next year.

But it was an announcement this month by the Maryland Jockey Club that it would cut purses at its races for the rest of the year to make ends meet that led Gov. Martin O'Malley to say slots were necessary to save the state's historic horse racing industry.

"All these things are threatened by their inability to compete with tracks in states around us who are able to offer slots," O'Malley said at the time. "We can't expect them to thrive, or even survive ... if we handicap them and don't allow them the tools that the tracks in all the other states are using."

The tracks in neighboring states are doing well in the sense that horsemen and jockeys are competing for three times as much money as they did before slots, and track owners are making millions. But that has done nothing to stem the declining popularity of horse racing.

"This place used to be mobbed," Jean Carter of Wilmington said while going through the racing forms in Delaware Park's nearly empty grandstand before the start of a race. "Either people went broke, or a lot like to go to the slots instead of horses."

Lou Raffetto, president of the Maryland Jockey Club, acknowledges that racing has declined in neighboring states, but he says that that won't happen in Maryland, because the state has a horse racing tradition that eclipses that in Delaware, West Virginia and Pennsylvania, and has the farms, breeding operations, infrastructure and committed track owners to match, he said.