WV Racing Struggles With Plan for Stability

A request by management and horsemen at Hollywood Casino at Charles Town Races to reduce the number of live racing days for 2015 has renewed a discussion about the future of West Virginia Thoroughbred racing and what must be done to preserve it.

The discussion comes amid a tenuous financial situation for the industry. Since 2004 combined purses at the state's two Thoroughbred tracks have dropped almost 40% even though they are supplemented by revenue from video lottery terminals and table games.

Charles Town originally applied for 220 racing programs, the minimum number required by state statute. But in conjunction with the Charles Town Horsemen's Benevolent and Protective Association, the track requested a reduction to 193 programs for 2015.

The matter came before the West Virginia Racing Commission Dec. 16, but the regulatory agency couldn't act on it because of statutory requirements. Impacted parties such as horsemen and pari-mutuel clerks must first be officially notified, and if any object, a hearing must be scheduled.

A similar situation developed earlier in the summer when Mountaineer Casino, Racetrack & Resort requested to drop live racing in December because management projected the purse account would be depleted by the end of November. Though the Mountaineer HBPA board of directors voted to support the dates cut, individual horsemen objected and forced a hearing in Hancock County, where Mountaineer is located.

A hearing officer ordered the track to offer eight races a night instead of nine from September through November and said the track could eliminate 14 programs in December if it deemed purse money wasn't available. The meet ended Nov. 30.

Though a sufficient number of horses per race is a concern, there is a much bigger issue. Purse revenue from VLTs and table games at the two racetracks is down because of casino competition in neighboring states. Simultaneously, the state Legislature is taking more of racing's financial share from VLTs and funneling it to other state programs.

"The motivation to reduce dates was to preserve the purse account," Charles Town HBPA executive director Maria Catagnani told the WVRC. "We're looking at what we have and trying to be forward-thinking. We have ongoing discussions with management to allow us to continue racing through the year, and if funds are available, we would add days to the program."

Catagnani said the agreement not to make up 20 racing programs canceled earlier in 2014 because of weather and racing surface conditions helped preserve the purse structure at Charles Town in the final months of the year.

In 2005 the West Virginia Legislature passed a bill that authorized the transfer of more than $11 million a year in VLT purse money to make up a shortfall in workers' compensation programs in the state. The shift in funds was supposed to expire but never did.

In 2004, the year before the legislative action, purses at Charles Town totaled $51.9 million, and at Mountaineer $37.6 million, according to The Jockey Club Information Systems. By 2008, the purse payout at Charles Town had dropped to $39.3 million; at Mountaineer, $30.8 million.

The reduction in available purse money has been further fueled by subsequent legislative action to tap the VLT purse fund for other purposes,including earlier in 2014 when lawmakers grabbed another 10%. In addition, there has been a steady decline in business at the two West Virginia racetrack casinos because of intense casino competition in neighboring states.

The 2014 Mountaineer meet ended with total purses paid of $23.2 million. The 2014 meet at Charles Town is expected to end with about $32.8 million paid in purses, according to TJCIS statistics. Combined, that's a decrease of 37.4% since 2004.

Horsemen's groups are expecting to lobby the legislature to restore the funds originally redirected for workers' compensation programs but now used for other purposes. They're also calling for the WVRC to be more involved in mapping out a strategy to preserve the pari-mutuel racing industry.

In public comments submitted to the WVRC earlier in December, Joe Funkhouser, a member of the Charles Town HBPA board of directors, suggested pari-mutuel takeout reductions, advance deposit wagering, historical race wagering machines, and the new EquiLottery concept as options that should be studied and seriously considered. He also said resources should be used to promote racing in the state.

"Live racing marketing and promotion is almost nonexistent except for a few days per year," Funkhouser said. "Perhaps the commission would be a better steward of state advertising dollars to market live racing if racing associations fail to promote live racing on a regular basis. There would be no racetrack video lottery or table games without live racing.

"If the commission is content slashing racing days without trying to study what works in other jurisdictions and implement those ideas for West Virginia, there may not be a racing industry to promote in the near future."

Such could be the case with Greyhound racing at two tracks in West Virginia. The Legislature has ordered a study into the economics of dog racing, which also is supported by VLT and table games revenue, and there have been suggestions lawmakers in 2015 could consider legislation that would decouple dog racing from casino gambling.

Such action would result in a "buyout" of the Greyhound industry similar to one approved by Iowa lawmakers last year.

The WVRC in late summer adopted a resolution calling for legislation that would lower the minimum number of required racing days each year and offer flexibility to the commission, horsemen, and tracks when it comes to adjusting racing schedules to reflect market conditions. A stakeholders' meeting to discuss racing dates and revenue measures, however, was postponed after it was learned the Legislature would commission its own study.

So as the 2015 legislative session approaches, there is no comprehensive strategy.

"The racing commission is on the record of taking action (via the resolution) to address these issues," WVRC member Bill Phillips, who proposed the resolution, said Dec. 16. "Other than just being on the record, it should be an advocate (for the issues).

"We had a meeting planned, and it was postponed, but now we've found out the study is about dog racing only. We should think about getting all the parties together as we had planned."