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Fri March 23, 2012
Kentucky Horse Racing Fades, Boosters Yearn For Casinos
FLORENCE, Ky. - Away from the picturesque farms dotting bluegrass country, the mega-dollar yearling sales at Keeneland and the twin spires at Churchill Downs, the tradition-laden sport of horse racing is in danger of falling off the pace in its old Kentucky home.
Venerable tracks now offer $1 beer-and-hot dog promotions, live music and night racing to boost attendance.
While tracks in other states have parlayed casino gambling into higher purses, Kentucky lawmakers have resisted allowing such a move. Everyone from breeders to railbirds worries that it will eventually render the home of American horse racing an also-ran.
Even storied Churchill Downs, home of the Kentucky Derby, has felt the pressure.
The Louisville track offers a few nights of live racing, drawing three times the typical race day crowds. It has reduced racing days in its spring meet in a gambit to keep purses competitive with tracks where casino operations boost racing prizes. Between 2000 and 2008, the famed track had at least 52 racing days in the spring session; this year it will have 39. But Churchill still struggles to fill some race cards with big fields that attract more betting, track president Kevin Flanery said recently.
"We're having difficulty giving away the money that we're offering because they're going to other states that are either offering more or have less competition than a Kentucky racetrack would have," he said.
But Churchill has the Derby, a cash cow, to support its racing seasons.
Times are especially tough at Turfway Park in Florence, and the odds look even longer now that slot machines won't offer a lifeline.
From the backside to the executive offices, there's grim talk that without an infusion of casino gambling money, the winter haven for Kentucky horse racing could someday turn into a shopping mall.
"I hope I don't have to consider that. I'm not that interested in being a shopping mall manager," Turfway President and CEO Robert Elliston said.
But if the track can't make it as a racing facility or gaming facility, he said, "then we have to look at other options."
As the suburban northern Kentucky track has reduced live racing and offered some paltry prize money, tracks in other states have been outstripping their Kentucky competitors. States like Pennsylvania, West Virginia and Indiana have parlayed casino gambling into higher purses.
It's a domino effect: Bigger purses attract more horses and more wagering as everyone from owners, trainers and jockeys to race fans look to cash in.
In Pennsylvania, where horse racing mingles with casinos at operations dubbed "racinos," overall purses approached $123.5 million in 2011 for 4,464 live races. Kentucky's overall purses were $89.7 million for fewer races.
Now the ante is being raised in New York. Purses are up sharply at Aqueduct Racetrack, thanks to a new gambling parlor there. In January, purses at Aqueduct were about $400,000 per day, compared to $275,000 per day in January 2011. Other New York tracks also are seeing higher purses.
Kentucky lawmakers have refused to follow that lead, defeating proposals to let the state's racetracks introduce slot machines.
Supporters of expanded gambling suffered another setback last month when the state Senate defeated a proposed constitutional amendment to legalize casinos in Kentucky.
Kentucky has long been the hub of thoroughbred breeding. For decades, many horses have stayed put to compete in Kentucky, which offers year-round racing during rotating meets at Churchill Downs, Keeneland, Turfway and Ellis Park.
Kentucky's horse industry generates about $4 billion each year. It's responsible for tens of thousands of jobs - everything from training horses to caring for their health, cleaning up after them, shipping them and producing the hay they munch. There are equine accountants and attorneys, bloodstock consultants and racetrack officials.
But the number of live racing days has shrunk as tracks struggle to offer the purses needed to attract horses. In 1993, Kentucky tracks offered 2,976 races. Last year, the total shrank to 2,107, a 29 percent drop.
Average purses in Kentucky dipped below $30,000 in 2008 and 2009 but rebounded past $40,000 the following two years, inflated by declining race days and Churchill Downs hosting the Breeders' Cup.
At its highest levels, it's a sport of blue bloods, with rich owners and celebrity trainers. But most horse owners struggle to keep their stables running on modest incomes.
And away from the glitz and tradition, the Kentucky racing scene has faded - perhaps nowhere more than Turfway, which now offers $1 beer and hot dog promotions and live music on Friday nights to boost attendance.
It's not just the horsemen struggling at Turfway.
Tom Scherz, who operates the kitchen on the track's backside, said his business is off at least 50 percent.
"We're at rock bottom," Scherz said. "If something doesn't happen, we'll probably be done in 24 months."
"It's from top to bottom," he added. "There are owners that are sinking to the guy that cleans the poop sinking."
On a recent Saturday at Turfway, two floors of the six-story clubhouse were empty. A modest crowd pressed near the rail or clustered around clubhouse TV sets to watch horses run. On the backside, paint was peeling or fading on horse barns. Roads were pocked with potholes.
Arnold E. Lillard made a rare visit to Turfway on the recent Saturday. He used to go to Kentucky tracks regularly, but the retired truck driver now does his wagering at Belterra Casino Resort nearby in Indiana. He wore a Belterra pullover, sporting his loyalty on his back.
He had cashed two winning bets on simulcast races in Florida, but grumbled "they didn't pay much." He said Kentucky racing has suffered from uncompetitive purses.
His son, Jerry Lillard, still enjoys playing the horses, but said the horses competing at Turfway are generally "bottom feeders."
Ellis Park in western Kentucky, which offers live racing in summer, has also struggled. But that track is installing slot-like machines for instant racing games based on past horse races. Ellis is remodeling its clubhouse and expects the new revenue to spike its purses. Turfway wants to add instant racing but is awaiting the outcome of a legal challenge against the game before jumping in.
Turfway president Elliston estimates that casino gambling would pump $100 million into Turfway, allowing it to double purses.
But for now, that's just a dream. Meanwhile, just across the Ohio River, casino gambling is coming to Cincinnati, creating a new competitor for entertainment dollars. The nearby Indiana casino already drains gambling dollars away from Turfway.
Kentucky-based horsemen looking for the biggest paydays have noticed the casino-enriched purses offered at Penn National, Parx Racing and Presque Isle tracks in Pennsylvania.
In 2005, Penn National offered about $60,000 in daily race purses; now it's about $175,000 daily, said spokesman Fred Lipkin.
"Obviously that increase is strictly due to the influx of gaming money," he said.
Last year, thoroughbred owner Jim Wright shipped one filly to Pennsylvania to run at Presque Isle. The horse had four second-place finishes in six starts, yet Wright said she outpaced the net profit earned by his six horses that ran at Kentucky tracks. He plans to ship four or five horses to Pennsylvania to run this summer.
Jeff Greenhill gave up his career as a chemical engineer and moved to Kentucky to learn the horse business. In 1999, horses he trained won about $500,000 in prize money, nearly all in Kentucky races.
Now he's joining the outmigration from Kentucky. Last year, about three-fourths of the nearly $500,000 his horses earned came from races in places like Pennsylvania and West Virginia.
"I feel like I owe it to my clients to run where the purses have the best chance to pay for their horses," Greenhill said. "You can't do that in Kentucky."
Not everyone sees slots as a savior for Kentucky racing. Longtime breeder Arthur Hancock, owner of Stone Farm near Paris, Ky., said racing would be relegated to secondary status if casinos ever got a foothold at the racetracks,
"I don't know of any business that lives off the charity of another business, especially a competitive one," he said. "It would be a short-term gain and a long-term disaster for racing."
Trainer Dale Romans, a fixture on the Kentucky racing circuit, has shifted much of his stable to New York in pursuit of larger purses. Romans, who won the 2011 Preakness with Shackleford, plans to increase his presence in New York. This spring he will race horses there that would have raced at Keeneland and Churchill Downs in the past.
"I'm Kentucky through and through - born and raised," Romans said. "It's devastating not to be able to race there on a full-time basis. But it's hard to convince clients - and most of my clients are from outside Kentucky - that we should be running there instead of New York."