Kentucky tracks see business float away Racing: With casinos rollin' on the river, the state's horse industry wants to get a handle on -- sound familiar? -- slots.

February 03, 1997|By Tom Keyser | Tom Keyser,SUN STAFF

LOUISVILLE, Ky. -- Slot machines jingle just across state lines, but the sound in this state -- rich in horse tradition, home to one of racing's glamour events -- is that of distressed horse-industry leaders beating the drum for slots of their own.

To Marylanders, it's a steady refrain. Industry leaders, including Joseph A. De Francis, majority owner of Laurel Park and Pimlico Race Course, say that they need slots to stave off competition from Delaware and West Virginia, where the machines are legal.

But the state under siege here is not Maryland. It is the premier horse state in the nation: Kentucky.

"What we're going through is a mirror image of what's happening in Maryland," said Thomas H. Meeker, president and chief executive officer of fabled Churchill Downs. "We've known for years that this was coming. But the political interests, the legislators in the past always said: 'We don't want to make any snap judgments based on projections. We want to see, in essence, some blood in the water.'

"Well, we're beginning to see some blood in the water."

The deep-rooted horse industries in Kentucky and Maryland -- home of the Kentucky Derby and Preakness, two flashy jewels of the Triple Crown -- aren't the only ones bleeding. Pari-mutuel gambling in every region of the country is losing ground to slot machines or full-fledged casinos, many operated by Indian tribes.

Today, some form of casino gambling is legal in at least 29 states, according to International Gaming & Wagering Business magazine. That means Maryland and Kentucky are in the minority.

Referring to Kentucky, Timothy T. Capps, executive vice president of the Maryland Horse Breeders Association, said: "Here's the crown jewel of the American racing and breeding kingdom. This is Camelot. And there's trouble in Camelot."

Based in Illinois and Indiana, four riverboat casinos float on the Ohio River, which forms Kentucky's northern border and flows past four of its tracks, including Churchill Downs in Louisville and Turfway Park in Florence.

The most recent additions to this armada -- the Grand Victoria in Rising Sun, Ind., and the Argosy in Lawrenceburg, Ind. -- opened in October and December, respectively. Both are short drives from Turfway Park in northern Kentucky.

About the same time, in September, Ohio tracks began simulcasting -- televising races from across the country for local fans to bet on -- an industrywide practice on which Kentucky's Turfway Park, until then, had held a regional monopoly. Two of those Ohio tracks, River Downs in Cincinnati and Lebanon Raceway just north of Cincinnati, are short drives from Turfway Park.

"We felt the hit right away -- this double hit," said Jerry L. Carroll, chairman of Turfway Park. "And it's killing us."

During his track's 22-day holiday meet that ended Dec. 31, betting was down 35 percent from the year before. Turfway Park awarded 16 percent less in purses -- the money to winning horses. Average daily attendance declined from 2,952 to 1,834.

Usually an aggressive promoter and one of the sport's inventive thinkers, Carroll greatly cut back marketing in the face of the riverboats' overwhelming success.

"Here I am going to put up $200,000 worth of advertising, and the riverboats come in with $3 million worth. And I'm talking about one month," Carroll said. "How am I supposed to compete with that?"

Downriver near Louisville, about a 15-minute drive from Churchill Downs, one of the nation's largest riverboat casinos is set to open. Originally planned for this spring, its opening has been delayed indefinitely because of environmental concerns at the site.

But when Caesars World does open across the river in Indiana, the four-deck floating casino will offer 3,750 places to gamble -- the majority being slot machines. Related enticements will include a golf course, 500-room hotel, IMAX theater and gondolas soaring above the river capable of snatching more than 1,200 gamblers an hour from Kentucky.

A grim-faced Meeker estimates that business at Churchill Downs will plummet 30 percent.

Politics of slots

Like their counterparts in Maryland, Meeker, Carroll and other industry leaders in Kentucky -- with the notable exception of several high-profile breeders associated with the staid Keeneland track and its world-famous horse sales -- are asking ++ for permission from state legislators to install slot machines at racetracks. And, again, like their counterparts in Maryland, they contend that slots are necessary for the long-term health of racing in their state.

"We are not in the business of creating a new industry in the state of Kentucky, in other words, the casino industry," Meeker said. "That's not our intent. Our intent is to make the racing, the horse industry in Kentucky, more competitive and stronger and have the ability to grow into the future.

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