Musings for a Snowy Morning

It seems everyone has a problem with Governor Christie's latest commission regarding racing and entertainment.  The racing industry claims they have no representation on the commission.  The gaming industry claims they have no representation on the commission either. 

Of course, no one expresses any concern that the customer is not being represented from either side.  Casino customers can explain why they are not visiting Atlantic City and horse racing fans can explain why they have been abandoning the race tracks.  But then again, no one really wants to hear from the customer.  Heaven forbid the casino industry hears from their customers that Atlantic City is not a destination worth traveling to when they can go fifteen or thirty minutes from their home to a slot parlor (soon to be full casino in Delaware and Pennsylvania); the racing industry hears from their customers that their product is too expensive to play with respect to takeout and their facilities leave much to be desired.  After all, if the customers were heard, the casino industry may have to deal with the reality that they need to expand gaming in the state to go where their customers are and racing may actually have to cut the takeout and spend money to make the racetrack a place people want to visit.  For the benefit of both industries, there should be consumer representation; in the case of racing, a representative from HANA would be appropriate.

It turns out Christie's transition team did consider the possibility of gaming at the Meadowlands site.  However, due to the fact the transition committee had three representatives from the casino industry versus the one racing representative, reference to a gaming facility with VLTs at the Meadowlands was stricken from the final report. This prompted standardbred breeder, Mike Gullotta to issue a minority report. Regardless, it is being reported that Christie has not ruled out or ruled in VLTs for the Meadowlands. The horsemen are hopeful and the casino interests are slowing starting to seethe. That being said, I wouldn't be holding my breath. The New Jersey legislature has already made it clear that VLTs are a non-starter.

I can't help but wonder if horse racing spent even a fraction of the effort it is spending trying to get slots on improving the racing experience for customers (pricing, shorter time between races, improving facilities, etc.) if we would be in the position we currently are. My guess is no. There are plenty of people who love the sport and the challenge of playing the horses; we just have been chasing them away.

In the February 3 edition of The Horsemen and Fair World, the magazine reports on a contentious Illinois Racing Board meeting. During the January 26 IRB meeting, the board voted unaminously to limit the interstate commission fee to a maximum of 5%. As a result, of this decision, no out of state track could charge an Illinois race track more than 5% to carry their simulcast signal. TrackNet, owned by Churchill Downs (owner of TwinSpires and future owner of Youbet) wanted the limit set to 9%. Before the decision was voted on, the Tracknet president indicated if the proposal was approved, he would immediately terminate the transmission of TrackNet track signals to Illinois Racetracks or raise other fees to make up the difference. IRB President Joseph Sinopoli's response?

This sort of antitrust monopolistic activity that you are engaged in is so bad for horse racing when you combine with a bunch of tracks and use your muscle to demand various things for various racetracks.

It is refreshing to see a regulator come out and call it the way he sees it. TrackNet wants to charge 9% for their signal but you can be sure they don't want to pay that much to bring an outside signal into their own facilities or their ADW. Barring an anti-trust court fight, the only way to solve the problem regarding fees being charge for importing or exporting signals is for regulators to set a limit which will allow all parties to earn a reasonable return on wagering.  If no one is willing to take the case to court, the only answer is for other tracks to form their own consortium and set up their own ADWs to compete against the existing ones.