Penn National’s Beulah Park thoroughbred track near Columbus last year had four times the purse money than its Raceway Park harness racing track in Toledo, and far less money wagered, the investigation found.
Penn originally planned to move thoroughbred racing from Beulah Park to Dayton, then changed direction and said it would establish a thoroughbred track in Youngstown and a harness racing track in Dayton. “Nothing is finalized,” Bob Tenebaum, spokesman for the gaming company, told the Daily News.
Tenebaum said the type of track won’t limit the company’s investment. Penn is investing about $400 million on a casino in Columbus and $200 million for a new casino in Toledo, he said. The racinos in Dayton and Youngstown will cost an estimated $200 million each.
“The company is saying, regardless of the type of track, that we’re willing to make that investment,” Tenebaum said.
But the type of track can have a big difference in the amount of revenue it generates, and a harness track may bring in less tax revenue, the Daily News found.
Ohio’s seven commercial racetracks — three thoroughbred and four harness — had combined purses of $26.8 million in 2011, with daily purses averaging $44,369 for thoroughbreds compared to $33,659 for harness races.
And those purses are about to get much fatter — to as much as $150 million — once they are supplemented with video slots revenue. It’s unclear whether a harness track here would draw less video lottery terminal (VLT) activity than a thoroughbred track, but a Daily News examination of slot machine revenue for a pair of tracks in the Philadelphia area — one for harness racing and one for thoroughbreds — shows the thoroughbred track drew $100 million more in gross slots revenue, according to Pennsylvania Gaming Control Board data.
Gross revenue for slot machines at the Parx Casino north of Philadelphia, which has a thoroughbred track, topped $380 million between July 1, 2010, and June 30, 2011. Harrah’s Chester Casino and Racetrack, the harness track south of the city, generated $280 million in gross slots revenue during the same time period.
A harness track in Dayton could also have competition from Lebanon Raceway, which wants to build a $150 million facility with VLTs and harness racing along Interstate 75, possibly at the corner of Ohio 63 and Union Road.
“With a new harness track in Dayton and one in (Warren County), this region would become an epicenter for harness racing in the Midwest,” said Tom Gray, who owns standardbred horses used in harness racing. “A new harness track would put Dayton back on the map.”
But the twin harness tracks so close together raise questions about how much gambling the area can support, particularly since full-blown casinos are being constructed in Cincinnati and Columbus. John Blair, professor of economics at Wright State University, believes both racino owners will make money due to the current popularity of gambling, but he said other businesses in the area could suffer.
“What we don’t see, is that the racetracks will take money away from other recreational facilities in the region,” Blair said.
In its investigation, the Daily News used state data to compare purses and wagers. Beulah Park, for example, held 122 live racing days in 2011 with $4.7 million in purses. Raceway Park, on the other hand, had 45 live harness racing days, and tallied just over $1 million in purse money.
Total wagers at the two parks also showed a sizable gap. Beulah Park topped $26.5 million for live racing and simulcasting in 2010, with $950,641 paid in state taxes on those wagers. Raceway Park wagers were $2.3 million less, with $862,293 paid in state taxes.
The taxes are paid daily starting at 1 percent of the first $200,000 wagered, and topping out at 4 percent for all sums over $400,000 wagered, according to Ohio law.
A thoroughbred track in Dayton would create more economic advantages for everyone involved, said State Rep. Terry Blair, R-Centerville, who owns both thoroughbred and standardbred racehorses.
“I don’t think it’s in the best interest of the state of Ohio to build a standardbred track in Dayton,” Blair said. “We already have a standardbred track that’s going to be new, just 40 miles away. It will attract the same crowd as a Dayton track and the video lottery terminals won’t maximize returns.”
State Rep. Louis Blessing, a Cincinnati Republican and one of the leaders in the Ohio House, said he thinks Penn is making a mistake.
“I’d tell Penn National to move the thoroughbred track to Dayton to avoid competition with the track in Warren County,” he said. “That just makes good sense. I’m puzzled by Penn’s change of plans.”
Thoroughbred breeders upset
A quarter-mile off a country road in West Alexandria, the aroma of freshly cut wood fills a manicured barn at Ben and Judy Mears’ Frontrunner Thoroughbred farm.
Inside the barn, Ben Mears puts down wood-chip bedding in the stall that houses the pride of his stables: Lightnin N Thurder, a 1,300-pound stallion ranked No. 1 on Ohio’s sire list.
“He is proud of who he his,” Judy Mears said of the stallion. “He knows he is the king of the hill.”
Horse racing in Ohio — both for thoroughbreds and harness racing — has undergone hard times. In lobbying for the VLTs, track owners predicted the industry could disappear altogether without the revenue the slots would generate.
Now that the state has agreed to allow VLTs at racetracks, there is a whole new optimism, at least among those who make their living there.
Ben Mears bought his prized sire after learning that Penn planned to put a thoroughbred/VLT track in Dayton.
“Our goal was to do the best job we could to bring thoroughbred racing back to top shelf again in Ohio, because it has gone downhill,” said Mears, who has 14 other horses at his breeding farm. “We don’t even have an Ohio Derby anymore.”
The downturn is reflected in the number of Ohio-foaled thoroughbreds, which dropped from 496 in 1988 to 89 in 2010, according to a Ohio State Racing Commission 2010 report.
Meanwhile, as Ohio’s industry suffered, track purses and breeding programs blossomed in several surrounding states, due in no small part to slots revenue.
Mears said he was “devastated” when Penn announced it was no longer putting a thoroughbred track in Dayton, and stopped plans for building a training center on his property.
But he also questions the business decision. In Youngstown, thoroughbred racing would face competition from Pennsylvania and West Virginia, where purses are already enhanced with casino revenue.
A Dayton track, he said, would draw horses from Kentucky, which doesn’t have video slots, and from Indiana, where harness and thoroughbred racing takes place on shared tracks limiting each racing season.
Mears has no doubt that Dayton would pay a price for Penn’s decision to put its thoroughbred track across the state.
“It boils down to excitement, to glitz and glamour,” he said. “Have you ever seen a movie about harness racing? The next Kentucky Derby winner could be bred right here. Dayton needs that kind of excitement.”
Cradle of development
Tom Gray remembers a time when there used to be a waiting list to get a stall in the Montgomery County Fairgrounds barns.
Now, many of the stalls are empty and a cache of sulkies and practice carts stand upright between paint-chipped barns; stable cats scamper around owners and trainers as they tend their horses.
The barns’ disrepair could be a metaphor for what’s happened in the harness racing industry.
Just as the thoroughbred numbers have shrunk, so too have the number of standardbred stallions — from 456 in 1976 to 106 in 2010, according to state data.
Penn’s intent to put a harness track in Dayton, while bad news for people like Ben Mears, has given fresh hope to standardbred enthusiasts like Gray.
The former tool salesman and tavern owner doesn’t buy that harness racing takes a back seat to thoroughbreds.
“A photo finish is exciting whether its a harness or a thoroughbred race,” he said.
The greater Dayton area, because of Lebanon Raceway and the popularity of harness racing at county fairs, is a longtime cradle of development for talent in the harness industry.
Harness driver Dan Noble of Xenia was the national dash winner in 2011, meaning he had more wins than the approximately 7,000 other drivers licensed by the United States Trotting Association.
“He beat the best of the best,” David Elliott, president of the Greene County Harness Horsemen’s Association said. “His dad, Chip Noble, won the title three times.”
Gray said thoroughbred purses have always been heftier than those in harness racing, but he noted that track location is a big factor. The Beulah Park market in Columbus is nearly three times that of Toledo’s Raceway Park, he said.
“Harness racing holds its own to thoroughbred racing, when operations are run equally,” said Gray, using Northfield Park near Cleveland as an example. That harness track held 214 live racing days in 2011 with purses totalling $6.9 million, the highest of all Ohio horse-racing tracks.
Gray said standardbred horses are more durable than thoroughbreds, capable of racing up to 35 times a year, compared to about 10 for thoroughbreds. And, he said, it’s a sport that women and men can complete in equally.
The entertainment is family-friendly, he said.
“We are an agricultural industry that has gambling,” said Gray. “We are not a gambling industry first.”
Not everyone excited
Not everyone is exited about the expansion of gambling opportunities in the Miami Valley.
Phil Burress, president of the Christian group Citizens for Community Values, said he doesn’t know of any kind of gambling that would be good for the city of Dayton.
Burress grew up around River Downs in Cincinnati and said he spent a lot of time behind the scenes there and at Lebanon Raceway.
“Any time you deal with gambling, you’re going to have corruption,” Burress said. “Crime surrounds places like that and drugs.”
But Blessing said the state will take steps to ensure that doesn’t happen. The winner of every race is drug tested along with any other horse that a steward or judge wants tested, according to Ohio regulations.
All jockeys and drivers must pass a Breathalyzer test before the start of a racing program.
And in addition to the usual track security, investigators for the state Bureau of Criminal Investigation, an arm of the attorney general’s office, will be on scene, according to the lawmaker.
“We’ve got watchers watching the watchers,” Blessing said. “Money is accounted for. The (VLT) machines are tested. The last thing a facility wants is for the public to think their machines are fixed. They’ll lose customers.”
Elliot said as soon as the track in Dayton is a definite go, stalls at county fairgrounds around the region will fill with standardbred horses training to race there.
But he’s not betting on anything yet.
“In this business, don’t believe anything until you see it,” he said. “When I hear those slot machines ringing, I’ll know.”
Contact this reporter at (937) 225-2362.
About the Author