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Tuesday, July 12, 2011

Tea Party Takes Aim at Racing; The Fight for the Final License

The Tea Party is taking aim at racing. Here is a blog entry from the Potomac Tea Party Group which is attacking the subsidies the horse racing industry is receiving.  Specifically, they are attacking the 'subsidy' which allows horses to be depreciated in three years instead of seven years.  Were this tax benefit to be taken away, the yearling market would be seriously hurt and there would be even fewer horses available for racing as people would be less willing to invest in racehorses. 

I am sure if the Potomac Tea Party is opposed to this subsidy, other Tea Party groups are as well.  But while on the national level the Tea Party is concerned with the federal budget, rest assured they are concerned at the state level with the subsidies the racing industry receives and we know what subsidies the racing industry receives on the state level means; purse subsidies in the name of VLT revenue.

While not an official member of the Tea Party as it would not play well in New Jersey, is there any wonder why Governor Christie is a favorite of the Tea Party?  Sure he is cutting the state budget and social programs, but what was one of the first things he took aim at?  Subsidies for horse racing.

Make no mistake, the Tea Party is no friend of horse racing.  As much as they insist the Tea Party is a group of fiscally conservative people, don't kid yourself.  The social conservatives are using this period of extreme economic downturn and are using the Tea Party as a shield to implement their own agenda of social conservatism.  Given the option, they will be more than happy to cut subsidies such as VLT revenue in favor of funding education and other more socially acceptable programs and the argument of preserving jobs in a gambling-related industry is likely to fall on deaf ears.

If you are like me, you may have originally discounted the Tea Party as a fringe movement and normally they would have been considered as such, but in times of economic upheaval these fringe groups tend to tap into the anger and gain more traction than they normally would.  I sense as the economy eventually approves and the public wakes up to the fact the Tea Party is more than a group of fiscal conservatives, they will become discredited.  The question is how much damage will they cause before then, which for our discussion means the damage they will cause to racing?

Enjoy your subsidy while you can.  There is a group out there gunning for that subsidy.  The question is will they be successful in getting it away from you?  To not take the Tea Party as a serious threat like I originally did may be a big mistake.

The Fight for New York's Last Harness Racing License - There must be a lot of big money people that love harness racing in New York as there are now three contenders for the last harness racing license in the Empire State.  The latest entrant is Mark Fernandez and Donald Cole who are looking to revamp the Bonnie Castle Entertainment Center in Alexandria Bay, New York into a 30,000 sf 'upscale casino' with a 125 room hotel in addition to revamping an old 5/8 mile track (if you use Google Earth, you can see the track) and add 500 seats to the Entertainment Center for gamblers to wager on horse racing.  For those not familiar with Alexandria Bay, it is located on the St. Lawrence River. Funding has been secured for this project and they are going to file the paperwork to secure the last license.

This latest entrant has to compete against a couple of other groups.  Thomas Wilmot and his group is looking to build a racino in Syracuse via a project called Syracuse Raceway.  This proposal calls for racing to resume at the New York State Fairgrounds in Syracuse where racing was last contested in 2005 and to build a racino nearby.  This proposal is being opposed by Vernon Downs as it would threaten its existence.  Ironically, the Wilmot family was involved with purchasing Freehold Raceway years ago after the fire and sold off most of the property to develop a shopping center before selling the racetrack.

The final proposal comes from Louis Cappelli and the Mohegan Tribal Gaming Authority which wishes to build a racino complex on the grounds of the old Concord Hotel in Thompson, New York; just down the road from Monticello Raceway.   This project has been suffering from financing issues for quite a while and also is threatened by a competing proposal by Monticello Raceway to move their track to a piece of property adjacent to Mr. Cappelli's project.    

If I had to handicap the three projects, I would give the Alexandria Bay project front running status.  Mr. Cappeli has not been able to secure financing for the longest while and lost a lot of the property he had up at the Concord as a result of financial difficulties.  Being Monticello is down the road, or potentially next door, I don't see the lottery giving a slot license to just move existing gambling money down the road.  As for the Syracuse project, I see a similar problem;  a racino in Syracuse would not only threaten Vernon Downs, but it would also present problems for Finger Lakes Racetrack.  The Alexandria Bay project, is in an area where there is no competing racing or slot parlor.  If a racing license and a slot license is to be issued, it makes the most sense to offer it to a facility which will not siphon business away from other racinos or racetracks.  Of course this assumes the lottery will issue a slot license.  First of all there is some question as to whether a slot license is available and as a representative of the lottery has indicated, the concept of slots was to stabilize the existing racing industry.  They are not sure they will give a slot license to a racetrack being built just to get a gaming license.

Of course, we know without the possibility of slot machines, none of these projects would even be on the drawing board and that is a warning sign.  No one wants a project with harness racing; they only are agreeing to host racing so they can get a casino established.  This means the moment they have the opportunity to get rid of the races, they will show the horsemen the door; that is unless racing can be reinvented and made self-sufficient.  The question is will anyone try?


Anonymous said...

I really enjoy reading your blog but your Tea Party comments are completely out of line. I am a proud TP member but by no means a "social conservative". I believe in a woman's right to choose, gay rights, etc. Your thinking seems in line with the rest of the mainstream media which is why that medium has lost the respect of so many people. Anyway, before I completely lose my temper I will say that on an ideological level I understand the desire to end those subsidies, but I love horse racing so that's a tough one for me.

Pacingguy said...

Don't get me wrong. I think a large number of Tea Party members are solely fiscal conservatives but when you consider who was behind the establishment of the Tea Party, you will find social conservatives having their hands in it and I believe (personal opinion) if they get a chance, those people will corrupt the movement and adapt a social conservative movement.

I could go into other issues which will identify some of the people i consider social conservatives in the Tea Party, but I will not go there as this is a racing blog and quite honestly, I hate bringing politics in this blog.

The point I was trying to make is there are groups out there looking to take on racing and it's special tax treatment on depreciation and if they get a large enough voice in some states, you can kiss VLT subsidies good bye as there are more important places for it to be spent. Some of that will be based purely on fiscal conservatism, some of it will be based on social conservatism. I am trying to light a fire under these people who have their proverbial heads in the sand.

Pacingguy said...

Note to all: I am posting a policy on politics and my blog. Look at the black bar at the top of the blog site for my statement on politics.