Slots Keep Investors Interested in Racing

At the “Racing’s New Partners” panel, on Wednesday, executives from companies that own racetracks confess that had it not been for the slot machine revenue available to them as racetrack owners, they would have given up on racing long ago.  Each company’s racetrack has taken advantage of gaming expansions. 

The panel was held at the fourth quadrennial Racing Congress in Las Vegas. 

Chief Operating Officer of Harrah Entertainment Inc., Tim Wilmot, made his feeling very clear when he stated, “We would have had no interest in Chester Downs if not for gaming.  All our profits will come from the 2,700 slot machines there.”  Chester Downs is Philadelphia’s latest Standardbred racino.  Wilmot went on to further discuss the company’s investment plans, “We’ve invested in Bluegrass Dowms and Turfway Park in case Kenucky ever gets gaming.  Our primary interests are slot machines and table games.”

In a similarly motivate business transaction, Connecticut’s massive Indian Casino, Mohegan Sun, took over The Downs at Pocono. Mohegan Sun’s Robert Soper, also Pocono President, admitted that the acquisition had virtually nothing to do with racing; it was the gaming that peaked their interest.  The Downs at Pocono was formally owned by Penn National Gaming Inc.

Quebec Senator, Paul Massicotte, said the promise of 1,900 slot machines was the only hook that gave him the ability to bid on four Standardbred tracks.  His firm will build a new racino in Quebec as a part of the acquisition.  The new racino will be the fifth in Quebec.  Massicotte says, "The 1,900 machines are what make the transaction viable.  It's horse racing, but we expect to lose $20-million a year initially on the horse racing side of the business."

Slot machines have proven to be the primary business for many gaming companies.  Racing has been categorized as a necessary “cost” to keep business running.  The panelists of “Racing’s New Partner” focused on the additional benefits of fully integrating slot machines and horse racing.

Chuck Keeling is VP of Great Canadian Gaming Corp.  According to him 15% of the on-track handle at Hastings Race Course is generated in a simulcasting room set up by the track to function as an entrance to the slots parlor.  Great Canadian Gaming Corp. owns not only Hastings Racing Course, but several Standardbred facilities. 

Chris Scherf acted as moderator for the panel discussion.  Scherf is currently the Thoroughbred Racing Association’s Executive Vice President.  During discussion, he posed an extremely intriguing question to the panel members, “Aren’t you concerned that if slots far out perform racing then the government will eliminate racing altogether?”

The response from Mohegan Sun’s Soper was that “Horse racing needs to stop worrying about how slots may affect racing and instead focus on how racing can become more exciting.  They’re two different industries.”

Former president of Prairie Meadows Racetrack and Casino, Bob Farinella, encouraged his management team to always support racetracks with gaming.  That way the track remained as an example of gaming’s positive affects on horse racing and state agriculture.

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