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Monday, October 20, 2014

The Colonial Downs Aftermath and Food for Thought?

Now that Colonial Downs is shutting down, perhaps for good, at the conclusion of the current standardbred meet; the result of being unable to reach an agreement with the thoroughbred horsemen over the number of days of live racing and the makeup of the meet.

Unfortunately, the standardbred horsemen suffer in this disagreement though they are not a party to the dispute.  Without the ability to simulcast thoroughbred races at Colonial's OTB locations and at the track, it is not financially feasible for Colonial to operate the track for a standardbred meet; there is not enough money being wagered on harness simulcasts.

The dispute is a familiar one.  Virginia, a state without slots is unable to offer competitive purses which means they offer mediocre racing which doesn't draw the interest of simulcast gamblers.  While the Virginia horsemen realize a long meet is not feasible, they want to run a meet primarily geared to the Virginia bred horses with a few races geared towards out of state horses.

Jeffrey Jacobs, the man who pays the bills for Colonial Downs realizes the track can't survive with its usual fare of racing considering the abundance of racing in the Mid-Atlantic region.  What he wants to do is offer a boutique meet, a 'Saratoga South' where there would be race cards geared towards the national stables with fewer races for Virginia bred horses.  Jacobs correctly theorizes race cards full of horses of national importance would attract simulcast gamblers, allowing Colonial Downs to go back to its early glory days and return the track to a better financial footing.  Of course, to offer these purses, there is the need to simulcast thoroughbred races all year in order to build the purse account up.

While the two groups basically agreed on the number of days (26), they couldn't agree on how the days would scheduled and how much racing there would be for the local product versus imported talent.  When Jacobs attempted to form a new horse group, it was known the VRC would not accept them, hence Jacobs surrendered his license.

The dispute at Colonial Downs is of importance to the standardbred industry because the dispute in Virginia touches on issues facing harness racing.  There is too much racing content offered on most days when you consider the audience interested in harness racing.  You may say those slot states don't have such a problem since their purses are subsidized but that is not true in the long term.  Even if you disregard the states cutting the amount racing gets from slots or decoupling, you have the issue of over saturation.  Over saturation is going to cause purse accounts to shrink as less slot money will flow into those accounts, resulting in purses being cut as is the case of Delaware, a state where the tracks are in financial peril.  If subsidies are reduced sufficiently, horsemen and tracks are going to look at handle more seriously.

The only way tracks are going to be able to get handle up is by offering racing which people will be interested in wagering on.  The only way this will be possible is if tracks will adopt Jacob's approach of offering boutique meets.  The days of racing year round at one track or even a state is not going to be possible; we need fewer tracks running at the same time so those running will get a larger share of the simulcasting pie.  The question is what will the final solution look like to address this problem?

Perhaps we need to look at Monmouth Park, specifically the year they offered their 'super meet' when they offered inflated purses to attract horses from the top stables, getting some horses which would have headed to Saratoga to reside in Oceanport.  At the conclusion of the super meet which got national attention, Monmouth conducted a lower grade meet featuring NJ bred races.  Yes, Monmouth lost money that year, probably due to the fact the same number of tracks raced against them.

Harness racing would be best served to address the issue of how to reduce the number of race dates while things are going relatively well.  Failure to address the issue now may result in a Virginia-type standoff which has cancelled thoroughbred racing in 2014 and apparently in the future; at least until a game change moment occurs.

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