Good News In Ohio

by Ed Meyer

posted on January 10, 2009 in News | 3 Comments >>

Ohio’s three Thoroughbred tracks begin the 2009 racing season Saturday, with a new agreement with horsemen on how to split off-track revenue, that an advocacy group says contributes more than $770 million a year to the state’s economy.

Two of the tracks had threatened to quit racing if no agreement was reached, but problems for the industry remain as bettors place more money with Internet hubs, and race tracks have an increasingly smaller pie to divvy up.

The new deal gives horsemen about 20 percent more money, said Dave Basler, executive director of the Ohio Horsemen’s Benevolent & Protective Association.

Beulah Park in suburban Columbus will start its racing meet Saturday, and River Downs in Cincinnati begins races in April. Thistledown, near Cleveland, is operating under special permission from the horsemen because the owners are trying to sell the track.

Ohio Racing Commission figures show that less money is being wagered at Ohio race tracks every year. The total amount of money handled was $372 million in 2007, compared with more than $600 million a year from 1997 through 2001.

Track owners want the legislature to legalize slot machines, saying they need other sources of revenue to raise purse levels to those offered in neighboring Indiana, Michigan, Pennsylvania and West Virginia, which have slots.

Some tracks also complain that Ohioans have a limited amount of discretionary money available for gambling, and much of it is going to out-of-state slots or to gambling boats in Indiana.

Another theory gaining traction is that much of the falloff of wagering at Ohio race tracks is going to systems that allow gamblers to bet via Internet or telephone. The wagering systems are known as advance-deposit wagering (ADW) accounts.

“If a guy’s betting through an ADW, that’s hurting the track and horsemen,” Basler said.

In Ohio, winning bettors get back 82 cents of every dollar wagered. Four cents goes to operate the Ohio State Racing Commission and its programs, and the track and horsemen each get 7 cents.

The track pays its employees and operating expense out of its share, and the horsemen’s share goes toward purses.

That system worked fairly well until other forms of gambling were legalized in several states, and many people chose the rapid action of casinos. Race tracks responded by pushing for simulcasting, through which customers could bet on races elsewhere. But that resulted in the track that was importing the signal keeping a share, and the host track and horsemen getting a lesser amount.

Then came ADWs, which allowed betters to place wagers without ever going to a track. At first, that seemed like “found money,” Basler said. But the ADWs kept an even bigger share, leaving the host track and horsemen about half of what they shared from the tracks where races were being run, Basler said.

The amount of money wagered with ADWs has become so significant that the lost revenue poses a serious threat to Ohio racing, says Sam Zonak, executive director of the Ohio Racing Commission. He has proposed making ADWs illegal in Ohio to force bettors back to the tracks.

David Nathanson, president of TVG, the nation’s largest advance-deposit wagering company, declined to say how much money TVG handles from Ohio. Nationwide, TVG handled $142 million in the third quarter of 2008.

“Ohio isn’t the only state where there has been a dispute between tracks and horsemen,” Nathanson said. “Those, in combination with dismal economic conditions, have led to the worst year in parimutuel wagering in horse racing since 1988.”

Equibase Company, which follows the industry, reported Tuesday that $13.67 billion was wagered on races at U.S. tracks in 2008. That’s down 7 percent from $14.72 billion bet in 2007.

“The economy is the main factor in that. It has nothing to do with infighting in racing,” Nathanson said.

Horsemen have the right, under the Interstate Horseracing Act of 1978, to refuse to allow a racetrack to export its signal. Jack Hanessian, general manager at River Downs, has estimated that the horsemen’s refusal to let him export the track’s signal to ADWs from May 2008 though Labor Day, cost horsemen $300,000 in purse money.

Mike Weiss, general manager at Beulah Park, said Thursday that a similar refusal by horsemen could have meant $1 million less to split this year.

Last month, Beulah Park threatened to close its barns, leaving horsemen scrambling for a place to board their horses. Finally, track owner Charlie Ruma forged a deal with Basler.

Weiss not only thinks that racetracks and ADWs can coexist, he sees ADWs as vital to Ohio’s marginal tracks.

“It’s the fastest-growing part of racing,” he said. “I don’t believe that shutting off ADWs would bring a lot of people to the racetrack. We’re trying to attract a younger demographic, and this is a different world with the Internet and mobile phones.”

On that, Basler agrees.

“From my perspective, ADW companies are not the enemy,” he said. “They allow us to reach a segment of the population we would not otherwise reach.”

3 Responses to “Good News In Ohio”

  1. Rathna says:

    New deal bring 20% extra money is really good but recession dont affect these players??I really wounder from where peoples are getting money to enjoy this game,were it intakes plenty of money to give joy to both the vieweres and the players as well.

  2. Simi says:

    I really, really hate gambling. It spoils the life of peoples getting involved and who not involved as well. So nothing to comment positive on this.

  3. Ed says:

    I understand that you don’t like to gamble. That is your choice just like going for a hamburger, having an adult beverage, or lighting a smoke. It is your choice.

    There are almost 200,000 jobs in racing in one state that will be lost. Do you like to be taxed? Well if this iniative fails, the taxes on everyone will go up. The unemployment rate goes up, and in this economy we need all we can save.

    Like it or don’t, it will generate jobs and create tax monies. This will fund schools, and allow in-state children to attend college. It will also benefit special education programs in schools, and allow for schools to get more computers and better resources for our children.

    Sometimes we need to put our personal beliefs aside for the good of the many. Do you want to tell that family of four that has been involved in racing they will lose their home? How about adding to the existing state financial woes? Like it or not, it is an answer. I don’t hear many coming up with answers that save jobs, help children in schools, and allow for higher education.

    As far as gaming being recesion proof, that is a myth. I have a friend who owned a liquor store. Notice how it was in the past tense. They lost it due to rising taxes, and patrons travelling to other states. More unemployment…..

    This is not about who and what to wager upon. This is a call to save a large group of tax producing jobs. You don’t have to go to the track. You can just benefit from the school programs and higher education programs if you have school age children.

    Feel free to hate gambling, it is your choice. But also look at the lives and jobs it affects. Maybe, when they get displaced they will come over and apply at your job location. It is easier to save what we currently have, rather than create new jobs.

    Just keep an open mind about the issue.

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