Sunday, March 05, 2006

In Slots We Trust

In any state where you find horse racing without slot machines, you will find hundreds of horsemen who are convinced beyond debate that bringing the one-armed bandits to their venue will usher in a new era of prosperity. "Look at Delaware Park and Mountaineer" is the mantra of the downtrodden everywhere. Actually, they might have something there. Looking at the way in which slots came to those places, a key to the horsemen's success was the fact that their own share of the slots revenue was guaranteed in the state law before the first busload of senior citizens began gambling away their grandchildren's inheritances.

Unfortunately, success in a few states has elevated belief in the efficacy of slots to the level of a religion, with blind faith and fervency replacing reason. Even a strong fundamentalism has evolved (pardon the pun), so that any person who raises questions about the central tenet that slots are good for racing, period, is looked upon as a heretic, with burning at the stake not entirely out of the question.

If racing ever needed a St. Paul, a Thomas Aquinas, or a Martin Luther, it is now. Fundamental doctrine needs to be revised, fundamentally. It's not about the slots at all, it's about the LAW.

There are a few things the faithful need to consider. Let's start with a nice slap to the head. Three days ago, the Miami Herald reported that negotiations between Gulfstream Park and representatives of the Florida Horsemen's Benevolent and Protective Association, over what percentage of newly legalized slot revenue will go to purse pools, have nearly broken down. Gulfstream, it seems, is standing by it's offer of slightly over 4 percent. Yes, I said FOUR, not FOURTEEN. Does this look like Mountaineer Park or Delaware??

Now if you live in Ohio or Michigan, and your local HBPA is supporting legislation at the state capitol for slots at your race track, this news item alone should be enough to challenge your religious fervor, and send you running to the nearest telephone to see if your share of this "new revenue stream" is specified in the legislation or will be determined by negotiations after the bill becomes law.

Negotiations between horsemen's organizations and track managements are a nasty business, at best. A committee comprised of trainers and owners trudges up to the general manager's office, loaded with a combination of hope, fear, and a minimal amount of trust for one another. Most of these will, at some time in the near future, be going back to management to ask for a race to be written, or stalls and tack and feed rooms to be allocated, and are, therefore, substantially dependent upon the goodwill of management for their livelihood. If they really piss off somebody on the other side of the table, they may simply be excluded from ever participating in racing at that facility again. The actual business acumen and educational level of the committee members may range from competent to abysmal, but often the dullards will tend to resent and subvert the insightful and articulate.

But management comes to the table like a pride of hungry lions. Unlike those horse-owning fools across the table, they know last year's return on investment (ROI), and return on assets (ROA) too. They know what every tenth of a percent of any revenue stream will mean to the bottom line. Having already secured one hundred percent of the revenue from parking, admissions, programs, and concessions, as well as the lion's share of revenue from simulcasting, phone betting, and the card room, if any, they are ready to feed again. And they sense their prey's fear and disunity.

Setting aside the larger question of why horsemen would want to settle anything this way, how could any in their right minds leave the distribution of slots revenue to this process? True, state legislatures are not exactly the College of Cardinals, but horsemen's associations can send competent professional lobbyists to represent them, and the numbers of voters on their membership rolls are a counterweight to the race tracks' bankrolls among career minded legislators. In race track language, we've got a much better shot.

Blind faith in slots is simply not enough. Before it's too late, horsemen and their leaders need to learn a new mantra: "Until the horsemen's share of the revenue is guaranteed in the law, WE ARE OPPOSED TO SLOTS LEGISLATION."

Otherwise, it will be the Christians and the lions all over again.


Anonymous Steve Zorn said...

Amen. In NY we (the horsemen's organization) went to Albany and got the basic parameters of the slot revenue split enshrined in the law. As a result, we'll start with 7.25% and increase to 10% once the construction costs are paid off. A lot better than what Stronach is offering in Florida.

Steve Zorn
Castle Village Farm

9:02 PM  

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