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Sunday, December 7, 2014

Proof that Slots are Not the Answer

Slots, the savior for racing is under attack.  The enemy?  The expansion of casinos through out the Mid-Atlantic is not only the scourge of Atlantic City; racetracks are suffering as well.  A perfect example is Delaware.

Since Delaware has had casinos (or racinos), casinos have opened in Maryland and Pennsylvania.  As a result, slot and table revenue has fallen significantly in the Diamond State, threatening the long-term viability of  Dover Downs whose stock, once hovering around $20 now sits at $1.05, after being threatened with de-listing by the NYSE (Dover Downs Gaming and Entertainment:DDE).  In 2007, purses at Dover Downs and Harrington combined were approximately $46 million; in 2013, $28 million in 2013 resulting in purses being cut.  The problem is not confined to the standardbreds, at Delaware Park, they shaved roughly 20 days off their schedule to conserve the purse account.  With more casinos expected to open, the drop in revenue and their related contribution to the purse account should be expected.  This will require decisions to be made; reduce purses, cut the number of races daily, reduce the number of racing days may be in the future.  No one is suggesting the day of $800 purses will be returning, but who knows where the bottom is?

So while the purses are dropping, the casinos are asking the state to help them as they are struggling under their debt service.  Negotiations to grant relief to the casino operators may come at the expense of purse accounts as the state is likely not desire experience a cut of revenue (which they already have).  Some track operators have even mentioned the dreaded 'D' word, decoupling.

Delaware is a cautionary tale.  As casino gaming expands in other areas, any state with racinos  may expect similar experiences. Eventually racing is going to have to make it on its own; it better start working on revamping the game.

Notice the dearth of claiming races at the Meadowlands?  Over the past two night, there was one claiming event contested.   Some may like claiming races, but in my book classified races are better  because there is less renting of horses; meaning horsemen need to take better care of their horses because they are going to be in the barns a long time.

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