in Triple Crown Articles

Racinos are racetracks or dog tracks that have casinos and their evolution has changed the face of racing and to this day is sweeping the industry. Through the added revenue from slots, and in some cases table games like roulette, poker and blackjack, horse racing has gotten a shot in the arm and the day may come when horse racing will be a story of the have and the have nots.

The haves will be the tracks that are legislated to accept slots and the have-nots are the tracks that are denied this added revenue.

Currently in the United States 11 states allow the operation of racinos and 6 others are considering adopting the legislation.

Every buck that is fed into a slot machine at a racino serves a number of purposes. The house, the racino operator, gets his quarter cut right off the bat. Another slice goes to operational costs, which includes the payouts to those deemed lucky on any given day.

The state gets their cut through taxes and the final quarter is earmarked for the racetracks. This added revenue goes into the purses that the racetrack can offer and here lies the rub. As the purses are increased, the horse population gets classier because more money is available to be won by the owners and horsemen.

It all started at Mountaineer Race Track in West Virginia. Back in the day, about 17 years ago, before MTR Gaming Group was allowed to introduce video lottery terminals, Mountaineer was one of the worst tracks in the country.

The horses were cheap, the conditions unkempt, the clientele shaky. But, back in the day Mountaineer was able to offer a daily purse structure of less than $25,000 a day. Now that daily purse structure can be as high as 7 times that number.

Just last Saturday night, when 9 of the 10 races were of the claiming variety, and with no stakes carded, there was over $120,000 offered to the horseman.

Cheap $5,000 claimers were running for purses of over $13,000 and that is unheard of at a track that does not have gaming. In contrast, maiden claimers running for a $32,000 claiming tag at Bay Meadows in Northern California will generally run for about a $17,000 pot.

With the horse population to draw from places like Kentucky and other stops on the East Coast, Mountaineer has upgraded its racing by attracting better horses.

There also residual gains from having slots. By the mid 1990s Iowa had joined the racino community and invested $26 million to convert the Prairie Meadows clubhouse into a casino. Within a year, the revenue from the machines paid off $27 million borrowed to make the conversion, paid off another bond of nearly $40 million, and still had over $50 million left in the coffers.

In one year, the purses at Prairie went from about $20,000 a day to over $125,000 a day, but maybe more importantly, Iowa boomed in breeding, going from the 28th in the country in total foals bred to 12th.

Philadelphia Park is one of the newest to go the racino route. Now they have 2,100 slot machines and they eventually expect to have 5,000 machines so check out these numbers. According to a story by Mike Magee, with a net-win of $370 a machine per day, the positive revenue intake daily figures to be about $777,000.

A total of 12% of that would go toward purses and other horse-related programs and that amount would be about $93,240.

When the monster grows to 5,000 machines, the horsemen’s cut will be about $222,000.

According to Hal Handel, the chief executive officer at Philly Park, the future is bright. There is a formula that determines how net winnings will be districted to horsemen, the state, local municipalities, and a specially created tourism fund. Handel: “The bottom line for racing at Philadelphia Park potentially could be purses of $450,000 to $500,000 a day when it is all said and done.”

Totally mind-boggling, but pure numbers is really not the entire story here. Racing has to be careful, as casino and slot players are not the same animal as horseplayers. Slot players are happy to just punch machines and pull arms while horse players are invested in the intellectual struggle of the game and solving the puzzle.

There may be some horseplayers that transfer to slots, but the concept that slot players will become horse bettors is a pipe dream. Finally, there is the end or long-term effect. Will the money eventually dry up in a particular community? It is hard to imagine any specific area being able to suffer heavy losses year in and year out.

If all goes according to plan and if you buy into the projection figures from Philly, one can easily see how this game could eventually be about how the strong, the racinos, survive and conquer the have-nots.

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