Racinos Don’t Save Racing
Slot Machines Largely Responsible for Racing’s Continuing Decline
The long-term trends show the ontrack handle at racino racetracks has declined, a direct result of putting slot machines and table games in the building
. Says one racing official quoted in the article below from The Daily Racing Form,
one of horse racing's dominant media outlets: “The racing industry has far more competition now, and a lot of it is right at the racetrack’s doorstep.”
Is Racing a Sport on the Ropes
Money From Slots Has Done Nothing to Improve Horse Racing
This Washington Post
story spotlights how slot money has been used to simply prop up tracks that have virtually no fan base and couldn’t exist on their own merits. When slots were legalized, the machines proved to be so lucrative many track owners lost interest in the sport and viewed it as a nuisance. They made no effort to improve the game or attract new fans; slot players are more profitable customers.
While the money has benefited owners, trainers and breeders, it has done nothing to popularize or improve horse racing. On the contrary, it has hurt the sport in some ways. At a time when almost every track is suffering from a shortage of thoroughbreds, the horses who go to slot-subsidized tracks could be running at viable tracks, helping them to offer a better product, instead of racing in a place where almost nobody watches them.
2012 Money from slots has done nothing to improve horse racing
Predatory Gambling Trade Preys on Horse Racing Industry
In this May 2011 story from NPR, a spokesman from Penn National Gaming suggests that for the horse racing industry to flourish, slot machines must be involved. He states: "The long term viability of racing - not just in Maryland, but everywhere across the country - is largely dependent on the eventual introduction of slot machines."
Horse Racing Gets Squeezed By Gambling's Spread
West Virginia Legislature Votes to Fund State’s Racinos
In March 2011, West Virginia's State Legislature voted on a bill that will use $10 million from an existing lottery to fund the state's racinos for 10 years. Del. Mitch Carmichael, of Jackson, called the bill "the most 'ridiculous' he's seen in several years."
"Why should we single out a particular industry, the gaming industry and the Greenbrier Hotel, to give them special $10 million giveaways from the people of West Virginia," Carmichael asked. "I just think it sets the wrong priorities."
West Virginia Legislature Votes to Fund Racinos with Public Money
Why Far Fewer Bettors Pony Up on the Horses
This Las Vegas Sun
article offers some insights as to why horse racing events are "going the way of Latin." It describes how horse racing revenue has declined 30 percent at Nevada casinos in the past decade even as other forms of gambling, after taking a hit in the recession, have increased over that period.
2011 Why Far Fewer Bettors Pony Up on the Horses
Horse Racing Remains a Dying Pastime
There has been many reports in recent years regarding the decline in the horse racing industry. In August 2011, the Associated Press released another story stating that there was "a generally unfavorable public view of racing, a long and frustrating learning curve for new bettors and increased competition from casinos and other forms of gambling as central to the sport's decline."
Report Finds Horse Racing Is On a Slippery Track
Slots and Safety at New Mexico Tracks
One of the first states to approve slot machine gambling at horse tracks, New Mexico now has been tagged with the worst safety record in racing. Nationwide, the newspaper found the industry “still mired in a culture of drugs and lax regulation and a fatal breakdown rate that remains far worse than in most of the world.” In addition, slots are now the tail that wag the horse, accounting for most of the revenue at tracks and turning racing into a side business, and perhaps the biggest reason for safety plummeting.
Slots and Safety at New Mexico Horse Tracks
Even casino industry researchers call racinos a sham
Even the researchers funded by casino interests admit slot machines do nothing to help horse racing and the workers connected to it. The late Bill Eadington, who was the director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno, told the Maryland Capital News Service in 2013, “The whole phenomenon of racetrack casinos has really been a sham. It’s done virtually nothing to increase the demand for horse races.”
2013 Casinos drawing mostly local crowds
Casino profits don’t translate to help for race track in New Orleans
Fair Grounds race track in New Orleans, Louisiana has fallen on hard times, with racing profits dropping seriously in past years. However, you wouldn't be able to tell that if you looked at the profits of Churchill Downs, the track's parent company. The company is posting record revenue from the casinos they put in the race tracks- so-called "racinos". Meanwhile, the track is in deteriorating condition and is becoming less and less popular with less and less capital being put into marketing, and some are criticizing Churchill Downs for neglecting the race track to tend to their casinos. This has led some, like trainer at the track, Tom Amoss, to voice their complaints publicly. As Amoss puts it, ""Like a lot of people, when Churchill Downs bought this place, I thought wow, this track has become part of the Churchill Downs family, we've got good things to look forward to. I couldn't have been more wrong." This 5-part series from The Times-Picayune
in Louisiana shows why Fair Grounds isn't receiving its fair share of attention from Churchill Downs.
2014 Some say conditions at New Orleans Fair Grounds lagging
2014 Horsemen concerned about growing disconnect
2014 New Orleans Fair Grounds experiences turf problems and purse cuts
2014 Corporate raider Churchill Downs needs to reinvest in historic New Orleans Fair Grounds
2014 Horsemen still hopeful for future despite woes
Churchill Downs continues to proper, but not with horse racing alone
Of the 64% of Americans who gambled on something this past year, only 7% gambled on horse racing. Yet Churchill Downs enjoyed a record setting second quarter with revenues of $438.5 million, up 7% over last year. By holding expenses stable, profits rose to $69.8 million which was a 26.7% increase. The Derby reported gains of $5.2 million, just a tiny fraction of the whole profit picture.
So where does the big money come from? The big mover was Big Fish Games, Churchill’s PC and apps game division. This division reported a $20.7 million increase in revenue for the quarter, an increase
nearly four times the revenue from the racetrack. Twin Spires, which is the advanced deposit wagering operation, also reported a $7.9 million increase in revenue. While the track is doing well on Derby Day, the real money comes from various forms of online gambling. Churchill also owns several race tracks and casinos around the country, but that revenue is relatively stable, but still sizable. So the secret to success for a horse track is to diversify into other forms of gambling and have your major competitor (the Stronach Group) go into bankruptcy.
Janet Patton, “Churchill Downs earnings get 27 percent boost from Big Fish Games, Kentucky Derby,” Lexington Herald-Leader,
Thursday. August 4, 2016, Page 6A.
Federal Court Blocks New Jersey Attempt to introduce Sports Betting at Casino and Tracks
New Jersey’s plan to legalize sports books at casinos and racetracks was rejected by the United States Court of Appeals, which upheld the Professional and Amateur Sports Protection Act which prohibits authorizing sports betting. Of the twelve justices hearing the case in February, ten voted to uphold the Federal law. New Jersey wanted the exemption to build up revenues at the casinos and tracks which have been hard hit by competition from gambling in other nearby states.
Nevada, the only state that has legal sports books, took in $4.2 billion last year. The estimates of illegal sports book gambling was $150 billion. As a result of this decision, a lobbying effort will begin next year for the withdrawal of the 1992 law that the judges upheld. The claim of proponents is that the illegal bets with bookies is sometimes dangerous, while the sports leagues and the NCAA argue that legalizing will lead to even more attempts to fix games to gain a gambling edge. The professional sports leagues are sending mixed messages, however, since the NBA is pushing for legal gambling on basketball games, the National Hockey League has awarded a franchise to Las Vegas, and the National Football League is considering moving the Oakland Raiders to Vegas as well. Two football owners have stakes in Fantasy Sports companies.
As we all watch the continuing expansion of gambling, we wonder just where it will end, and how seedy the institutions of government and sports in this country will become. While the percentage who gamble and approve expansion has remained stable for several years, the amount of our national wealth that is going down the drain to the gamblers continues to increase. Between our national debt and our gambling losses, it remains to be seen how long our wobbly economy can last.
Joe Drape, “Federal Court Blocks New Jersey Plan to Legalize Sports Betting,” The New York Times.
August 9, 2016.