Nags to Riches

A late push for slot machines in Springfield may be Fairmount Park's silver bullet

Out of the gates first for all to behold, Lion Heart galloped to an audaciously impressive lead two Saturdays ago at the 130th running of the Kentucky Derby in Louisville.

The expensive grandson of a sterling stud, Storm Cat, Lion Heart has connections and a pedigree that look much better than those of Smarty Jones, the Pennsylvania-bred horse that chased him valiantly down the backstretch. But in the end, it was the blue-collar stalker that would prevail despite his modest upbringing at shabby, working-class Philadelphia Park.

No one was certain Smarty Jones could win the big one until Smarty Jones won the big one -- and not until the final turn at that. Now, after a bare-knuckle and ultimately unsuccessful effort to obtain slot machines for its betting pits last year, Fairmount Park and its legislative cohorts appear to be borrowing a page from Smarty's playbook -- sitting back and seeing how the budget race breaks before making a sly move on the homestretch.

Until late last week, Lanny Brooks, a Fairmount Park thoroughbred owner, trainer and executive director of the track's Horsemen's Benevolent and Protective Association (HBPA, the track's de facto union for jockeys, trainers and stable hands), was cautiously pessimistic about the odds of slipping a slot-machine provision into the Illinois state budget before the legislature breaks session on May 21.

"We're going down to the wire again this year," Brooks says by phone two days after the Derby. "If we don't get a bill passed, it means we're going to have to go in the red in the purse account and continue to go in the red until we finish the meet on September 18."

The reason Brooks fears the HBPA will have to distribute purses while in the red is because of a legislative provision instituted with full-card simulcasting in 1995 called "recapture." The term means that in the event total wagers placed on live racing are not within 75 percent of the live handle the year before simulcast betting was permitted (in 1994), the horsemen must pay racetrack management 2 percent of the difference between the actual and targeted live handles.

"With so many [simulcast] races to bet on, the live handle has gone down and down and down and recapture has gone up and up and up," Brooks explains.

He isn't fooling. In 1994 the total live handle for the five racetracks in the state of Illinois was $1.2 billion. By 2003 that figure had plummeted to $308 million. So last year, the five Illinois tracks had to fork over some $18 million in recapture penalties. As the runt of the litter, Fairmount's share was $1.8 million.

On May 6 Brooks received word from Illinois senator Denny Jacobs of East Moline that a piece of gaming legislation was being finalized that would grant Fairmount and its ritzier upstate track brethren 500 slot machines apiece. Just as critical, though, is a provision that would eliminate recapture.

"Recapture is eliminated immediately," says Brooks. "That puts $1.8 million back in our purse account right away."

While Jacobs gives the eleventh-hour legislation "pretty good odds of getting out of the Senate," he is careful to note that it will not move in the House without some indication of gubernatorial approval.

"He's not wild about slots at tracks," says Jacobs of Illinois Governor Rod Blagojevich, a fellow Democrat. "He considers that to be expansion. But a lot of the fees he wants are not going to be approved, so to me, the gaming bill is an opportunity for him to get out of his budget problems and continue his education-spending expansion."

While Blagojevich took a hard-line stance against the slot provision last year, his office has left the door for negotiation slightly ajar this year.

"He doesn't believe expansion is necessary to meet budget obligations," says Blagojevich spokeswoman Abby Ottenhoff. "But the legislative process involves give and take. So he's willing to keep an open mind."

Putting slot machines into a facility that already features wagering aplenty and classifying the move as "expansion" seems somewhat strange to longtime horse-racing columnist Andrew Beyer.

"The one argument that racetracks have had is that you're putting them [slot machines] into an existing gambling facility," says Beyer, whose columns appear in the Daily Racing Form and the Washington Post. "A lot of states have concluded that's the most benign way of doing it. It's not like they're going into grade schools and churches."

Beyer is quick to tout West Virginia's Charles Town Race Course as an example of a left-for-dead track that's had new life breathed into it via on-premises slot machines.

"Charles Town was actually, for a time, shut down," says Beyer. "Charles Town was a Fairmount-type place, and now they've got pretty decent racing. They run maiden races for in the vicinity of $30,000."

To place this figure in context, Fairmount's total purse for a nine- or ten-race daily slate rarely exceeds $60,000. And while some horse-racing purists lament having to turn to slot machines for salvation, Beyer reminds us that slot-machine revenue means more purse money, which results in better, larger racing fields and, in turn, enhanced betting interest.

"I don't know how much any of these things really help the core racing business in terms of creating more horseplayers or more fans," says Beyer. "But an infusion of money from slots has saved many a racetrack and increased purse money. The purse money improves the quality of racing and makes your product more viable, particularly in the simulcasting market. So everybody benefits."

 
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