On the question of slots

I’m a Kentuckian. I was born and raised here. I have lived in Louisville and I have lived out in the state. I have a good idea of what it is about, and know what it is to travel around the nation and experience what others know and think about this state.

And the first thing people think about when they think Kentucky is horses.

For whatever reason, maybe the hint of limestone in the soil, Kentucky is a natural breeding ground of fast horses, probably the richest in the world. Of all the Grade I, highest-level stakes run in North America this year, 70 percent have been won by horses bred in Kentucky.

Horses and wagering have been a part of life in this state for well over a century. Meriwether Lewis Clark Jr., grandson of the great explorer, founded the Kentucky Derby, the world’s most famous horse race, and Kentucky Oaks in 1875.

Today, horse breeding and racing employ better than 165,000 Kentuckians and pump over $9 billion into the state’s economy. The horse business is our state’s third-largest industry. But it ranks No. 1 in visibility. Kentucky’s horse industry has become a symbol of excellence and and a trademark of this state around the nation and world.

And those industries — breeding and racing — both of them, are threatened. They are threatened not because others are doing horse racing better, but because of an outside influence — expanded gaming. Slot machines in racetracks in Indiana, Pennsylvania, Delaware and elsewhere have pumped big bucks into their racing circuits. All of a sudden, owners and trainers are faced with the option of running races in those states for higher purses against lesser competition, and they are leaving.

It might be hard to accept. Some point to the multimillion dollar operation that Churchill Downs is, and wonder how there could be a problem. That’s understandable. But watch the racing from day to day. Six-horse fields. Reduced race dates. Smaller purses. And remember racing in this state is much more than a single track, even its signature track. Turfway Park is facing extinction. Ellis Park in Henderson has been fighting extinction for years. And with no continuous “circuit” on which to race, more and more training outfits are stabling their horses in other states and simply dropping into Kentucky when the purse is right.

The breeding industry is similarly threatened. The infusion of gaming money in other states has allowed them to offer incentives for outfits whose stallions and mares breed in their states. No less prestigious an operation than Overbrook Farm this week announced it is, effectively, getting out of the business, selling the vast majority of its bloodstock.

I’ve heard it argued that these farms are silver-spoon operations owned largely by people outside Kentucky. I’ve heard it argued that Churchill Downs is a Wall Street corporation that is run by outside interests.

I can’t argue with that to a point. I also can’t argue with those who have little good feeling for Churchill Downs because of the way it has done business over the years. I could fill pages and pages with stories people have told me of some form of mistreatment or other. Churchill turned its back on a great many trainers who could have filled its fields, and has in general treated the middle- and small-sized training stables with indifference. And it is paying for it now.

But the central question that opponents of expanded gaming must address now is this — is the failure of this industry in the best interests of Kentucky?

Listen, for a moment, to a trainer I spoke to not long ago. Dale Romans grew up in the shadow of the Twin Spires. He cut his late classes to ride the Third Street bus to Churchill to help his dad with the horses. He has one of the largest stables on the Churchill backside and, if legislation for expanded gaming does not pass and purse structures at Churchill do not improve, he is going to have to move his operation elsewhere, leave his hometown and move his family from the only place he ever wanted to live.

“I have outside clients outside the state of Kentucky who have no reason to race here anymore. They no longer want to send their horses here. A lot of them send them just because we’ve become friends and have long relationships, but how long can they keep doing that?

“If this doesn’t go through, I’m going to have to leave, or decide not to be a major player in the game, which right now with two young kids who are going to have to go to college, I’m going to have to move.

“If . . . they’re deciding that they don’t care about horse racing in Kentucky, then just don’t do it. Let it go away. We’ll have the Derby. We’ll have Keeneland and the sales, and that will be it, though that will start to fade.

“I know people have problems with Churchill Downs, and I know Churchill has rubbed some legislators the wrong way. Churchill, if you look at it, has done a lot of things right, but it has also made a lot of mistakes. But who is Churchill Downs? Is it just three or four guys? It’s a revolving door of CEOs. So why be mad at Churchill Downs? It’s the city of Louisville. It’s the guys on the backside. I feel like I have owned Churchill Downs more than Bob Evans. I’ve been here longer. Churchill Downs is me. We can get mad at the executives and their decisions, but they’re going to be gone before long.”

In sports, you keep your eye on the ball. And in this case the ball is the future of the horse industry in this state, its employees, and its place as an identifying landmark of Kentucky.

Expanded gaming, like it or not, is the playing field on which our horse industry is now competing. If it is to compete and survive in any kind of viable way, it must compete on that field. That means having the same sources of revenue as other states.

Like most Kentuckians, I’m not a big gambler. I don’t go to casinos. I rarely bet on the races. I don’t bet on sports. It’s not my thing. I can count the number of lottery tickets I’ve bought in my life on one hand, and I have a great deal of respect for people who oppose the expansion of gaming on moral or other grounds. I’m not one of those who will lead a parade for slots. And those who point to this failure of the horse industry in Kentucky as a cautionary tale of what happens when you base a major industry on the capricious nature of gaming deserve at least an open-minded consideration, if they want to make that case.

But I’m operating now from the standpoint that the industry is worth saving. And I see the playing field. Anyone who looks at the business being done by tracks in other states, and the fervor with which they are seeking to build the kind of thoroughbred industry that Kentucky has already enjoyed, must come to the conclusion that Kentucky tracks, despite some big-money exteriors and big-time attitudes that have alienated them from the support of many, need to have the same tools that tracks in other states are getting.

I’ve heard it argued that video slots and other gaming cannibalize horse racing betting. You better believe they do. Slots in other states are eating our racing alive.

So what to do? The fact is we live in a state that has endorsed gambling in race tracks for well over a century. We have a state lottery. We allow games of chance for some churches.

The expansion that is being discussed only adds another type of gambling in places where it already exists, and provides a form that already is readily available just across our borders. The only difference between a slot machine off Centra
l Avenue and one just across the river on State Road 111 in Indiana is where the money goes once it is inserted into the machine.

It’s not as if the Ohio River is stopping anyone from betting. Kentuckians already are crossing the border and spending an estimated $1 billion to gamble in neighboring states every year.

I suspect most people in this state are like me, gamble very little and really don’t feel much effect on a daily basis by the presence of gambling in this state — except that we get ticked off when we have to wait in line at the convenience store while somebody is trying to figure out which scratch-off lottery ticket to cash in.

But in this case, there is a great cost in not acting. Not just the horse industry, but horse farms themselves, are on the line. Losing all of that would be too high a price for this state, which already is facing great challenges. Slots are not a move this state will have taken eagerly. In fact, the horse industry here has suffered because Kentucky has waited so long to act.

It shouldn’t wait anymore. The question is not how you feel about slots. The question is how you feel about horse racing.

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33 thoughts on “On the question of slots

  1. Why involve slots and casinos and all that's involved with them and the ancillary drain on the money before it ever reaches racing? Just allocate some money from the general fund and cover that draw via the usual state revenue producing methods and see if that helps turn things around. Who benefits? Who pays? If enough people complain remind them that they USED to build cars in Michigan.

  2. I am sick and tired of government with the sweep of a pen enriching one group and bankrupting another.Markets work. Industries fade, others take their place. Ebb and flow, the invisible hand is the ultimate arbiter of success. More taxes, more spending.The horse industry is just a bunch of rich guys trading money.Why should we subsidize that?

  3. Richard. What general fund money? Perhaps you've read, the state is in a massive shortfall. The usual revenue producing methods are already tapped out. This is a new revenue producing method. And we need more of those.Chip, come out to the barn area and tell me these are rich people.There are 165,000 employees of the horse industry in Kentucky. You're telling me they're all rich? No way. You're perpetuating a stereotype.Furthermore, the beauty of this is that it is NOT a subsidy. The racetracks are asking to invest THEIR OWN money into putting these machines in their own facilities. It is a completely private enterprise, though yes, it must be regulated by the state.Essentially, they're asking for permission. Any money the government spends in regulating it would be more than made up for in the increase of revenue.This is absolutely not a government bailout. It would be the General Assembly giving tracks the go-ahead to invest their own money in the hopes of increasing revenue and competing with tracks in other states doing the same thing. There is no taxpayer subsidy, no bailout.Get away from the stereotypes.

  4. You are all missing the point. This comes from an outsider. I breed and race in California and Kentucky. Churchill Downs took our box away several years ago because of some lie about remodeling and now our box can be purchased on Ebay. When asked for stalls Churchill would not give us any because we were from out of state. When I read the slots bill, not one word was mentioned or one dollar given to support the retired racehorse yet your state breeds 30,000 horses a year. Your problem comes from two situations. One: You don't care about people or animals, just the bottom line: Money. Secondly, public perception of horse racing has changed. No longer are the stands filled with cigar smoking gamblers interested in their favorite horse. The younger generation sees it for what it has become; overbreeding greed fueled by early retirement of champions to stud, interspersed by cheating drug pushing trainers and vets at the expense of the beautiful animal. Clean up your sport and take care of the customer, owner/breeder and of course the horse and maybe you can save your dying industry. This is the humble opinion of an outsider horseman that loves your state but despises the excuses given why you are failing.

  5. Once again, a well-intentioned writer confuses the merits of the horse industry with this proposal which is a government bailout of already wealthy racetrack owners.If this was about horse racing, the track owners would strongly support Senator Williams' proposal which directly increases purses without preying on the poor, elderly and mentally ill.Instead, two out of every three dollars from this proposal would go into the pockets of track owners.The UAW and ACORN would be proud of this sleazy political money grab by the track owners.

  6. At what point in time will Churchill Downs and their poor management practices towards the horsemen come into play. For the past 4 years management at the track has literally been hostile to horsemen and fans alike.Perhaps Bob Evans should reduce his $4 plus million dollar per year pay package if he and others are going to cry poverty! Just a thought…..

  7. All racing is trying to do is get permission to add another item to the menu at places where gaming ALREADY exists, I don't see it as that big of a deal. They just want a level playing field, and we need that VLT money to be kept in the Commonwealth, not going to Indiana, Illinois and West Virginia to build their roads, pay their teachers and generally fill their state coffers. I wish the Legislature would arise from their slumber and act positively on this.

  8. You won't get any argument from me about Churchill Downs and its mistakes, arrogance and outright mismanagement.The Williams, proposal, however, doesn't come close to generating the kind of revenue that Churchill Downs and these other tracks are fighting against — with the added drawback of taking state money that could and should be used elsewhere.Anonymous 5:57, you must have whiplash. Because you're bending over backwards on a point. First you argue against a "government bailout," but that's exactly what Williams' plan is. Williams wanted to take $19 million out of the state's already-strapped general fund and then enact, guess what, a tax increase on out-of-state wagering on Kentucky simulcast racing.Wait a minute, 5:57, you're telling me you think the answer is a tax increase and taking money out of the general fund, instead of giving these tracks the ability to go out and earn the revenue themselves? Sounds very much like you're the one in favor of a bailout. The slots proposal is more of a bootstraps issue.But I'm very much in agreement with all the Churchill critiques. The CEO compensation, the treatment of horsemen, and I've been very outspoken on those issues.Still, is it worth chucking the whole industry because of leadership at one track, leadership that will be here for a time, then go away?I don't think so.Again, I keep hearing the terms "bailout" and "subsidize." This slots proposal is neither. That's what the Williams proposal put forth, but it is not being considered.Reference: http://www.courier-journal.com/article/20090520/COLUMNISTS02/905200471

  9. Love the Dale Romans comment and I agree as my beef is with Churchill, but they can't take away my 40 plus years of loyalty. My point through this though is if Kentucky is going to allow expanded gaming, then let's do it right and have slots, table games and the like instead of VLT's.

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