00 Slots in Lexington
In a rare moment of cooperation the Red Mile harness track and Keeneland, a thoroughbred track, opened a joint historical racing venue at the Red Mile which is near downtown and the University of Kentucky campus. The two tracks installed nearly 900 slot like machines that have little or no identification with horses. They were expected to generate nearly a million dollars in play per day after one year. The facility cost the two tracks nearly $42 million to build with the expectation of paying off about half the cost of the facility in the first year.
Hasn’t happened. So far the slots barn has generated $12 million in revenue for the two tracks. At the six month mark the tracks claimed the machines were meeting expectations and would be in the $25 million to $35 million range per month by the end of the first year which we have now reached. That hasn’t happened either.
The handle (the amount bet) was $21.7 million in May, $18 million in June, $20.5 million in July. The first year was expected (by mid-September) to reach $220 million, but for the year the figure will be closer to $197 million, or an average of over $16 million per month. The two tracks said they were satisfied and expected the growth to continue as a large percentage of players are still new.
The machines are a poor method of raising taxes. Since the start of Historical Racing, $!.9 BILLION has been bet on them, with only $28 million in excise taxes raised and only $8 million going to the general fund of the state. That works out to 0.4 of 1%. That is an obscene tax rate in a poor state that could use a fair tax rate. While the $28 million is rasied by the state, $20 million goes to the horse industry.
Data from Janet Patton, “A year later, is the Red Mile/Keeneland gamble on historical wagering paying off?” The Lexington Herald-Leader,
p. 1C, September 12, 2016.