Legislation in Iowa is being considered to allow the two greyhound racinos to cease greyhound racing if they pay $70 million to the state over seven years. The tracks claim greyhound racing is all but dead. As one spokesman has said, "there are more dogs than people in the grandstand". The casinos have indicated that handle on greyhound racing has shrunk from $120.6 million to $6.2 million in 2011.
In addition, the purposes of the racino subsidies to these two tracks was to prompt up a local industry, but 40% is going to out of state breeders and stables. The legislation also calls for money to be given to the Iowa Racing and Gaming Commission to transition those who worked in the greyhound industry into other jobs; of course some people feel the 'Illinois effect', the process where money allocated for one purpose is used for another one; in this case leaving former greyhound workers without these funds.
This raises and important question which is relevant to horse racing. How long is a casino supposed to throw good money after bad? Clearly greyhound racing is dying, far faster than any form of horse racing, but this question, whether it passes in Iowa now or later clearly has impact on horse racing. It is not even a case of defending the casinos, but it is poor economic policy to throw good money after bad. Subsidies are meant to help an industry right itself, not to be an endless cash flow for failing industries to keep going operating the same failed business model. This is why horse racing needs to reinvent itself and become relevant. If it is cost effective for casinos to in effect pay salaries to people in the greyhound industry and not race, why should they continue to race?
Subsidies are not meant to be paycheck to greyhound workers or horsemen forever. They are meant to give industries time to turn around. Unfortunately, there are some horsemen who think subsidies are endless stream. Sooner or later, they will find out otherwise. You can talk the talk, but it action which counts. Do you want the industry to survive?
Right now it is Iowa greyhound workers. It is time for horse racing to decide once and for all to innovate and survive or just do what they are doing until the states say 'Enough'. It will be like musical chairs, except all the chairs will be removed at one time.
2 comments:
I'm glad that you posted this news; the "racino" effect is something that I have pondered for a number of years.
At this writing, slots increase purses at racetracks (we certainly feel the effects of that here in slot-less Texas) but it seems at some point, the casino/gaming industry is going to tire of subsidizing horse racing. Of course, such as in the case of Iowa, the casino wouldn't even be there if not for the fact there is pari-mutuel wagering.
There's certainly some potential for trouble ... It may start at two little greyhound tracks in Iowa, but then will it trickle to Prairie Meadows, then other tracks???
Sue,
I don't think Prairie Meadows is in immediate threat. As a 501(c)4,they have to do certain things as a public benefit corporation. They got rid of the trotters and run a successful t-bred meet and a so-so quarter horse meet. The quarter hores may be in trouble, but the runners should be there for a while I figure if this bill passes.
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