July 24, 2014

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Slots slated to cause stir at Ohio tracks

CINCINNATI — The introduction of video slot machines will have most of Ohio’s racetracks scrambling to install machines while others face even bigger changes.

At one track, it likely will mean a move from the county fairgrounds where local officials allow betting on harness racing and simulcasting but don’t want slots. For another track that has been for sale for months, it means the ante has gone way up.

The first step is to get financing for the gaming license, which will cost $65 million for 10 years for as many as 2,500 machines.

“I know the governor wants the first license payment, $13 million, by Sept. 15,” Jack Hanessian, general manager at River Downs, said. “First, you’ve got to find the money. We don’t have it laying around.”

The second problem is finding space for up to 2,500 video terminals.

“Our facility is not a winter type facility,” Hanessian said. “We have space in our grandstand mezzanine but it has to be modified because it’s open. We could button it up and get some air conditioning and heating in there; we have restrooms and food service, so that’s not a problem.”

Lebanon Raceway, a harness track north of Cincinnati, is considering a move from the Warren County Fairgrounds to some site in Montgomery County closer to Dayton. General Manager Mel Hagemeyer says a temporary tent facility might be used until a new track and clubhouse can be built.

Warren County commissioners asked their legal counsel to look into a possible lawsuit to block implementation of slots.
The compromise between Gov. Ted Strickland and Senate Republicans to let the Lottery Commission license video slots at Ohio’s seven racetracks is expected to raise $933 million to help fill a gap in the state’s two-year budget.

The agreement could mean suitors will take another look at Thistledown, the Cleveland-area track that has been for sale for several months while its parent company, Magna Entertainment Corp., is operating under Chapter 11 bankruptcy protection.

Brent Reitz, Thistledown’s general manager, said the slots agreement was encouraging but deferred comment on the track’s plans to a Magna spokesman, who was not immediately available.

Although Ohio tracks have long sought expanded gambling, they won’t be able to do anything substantive right away.

“They have to establish the rules first,” Hanessian said. “It all depends on what the state can do quickly. The Lottery is in total control.”

Lottery officials are shooting for a May startup date for video terminals at tracks, spokeswoman Jeannie Roberts said.

“There are a million technical details that have to be nailed down,” she said. “We want to do it as clearly and completely as possible.”

All three Thoroughbred tracks in Ohio — River Downs, Thistledown and Beulah Park, in suburban Columbus — have said they could not continue without an infusion of money.

Tracks in neighboring states that already have slots or casino gambling have siphoned away customers and have lured horse trainers because they are able to offer bigger purses supplemented from other forms of gambling.

“It really was a blessing,” Hanessian said of Strickland’s sudden turnaround in support of racetrack slots. “The racing business has been deteriorating. Now we’ve got an opportunity to survive.”

River Downs’ good fortune will put more of a pinch on Turfway Park in northern Kentucky, just south of Cincinnati, where General Manager Bob Elliston has seen a steady erosion of business to the slots and table games at riverboat casinos in nearby Indiana. Now Turfway faces direct competition for race fans.

“The nuance here that’s unique to Ohio is that not only are we facing competition for the horse population in several states that have slots, now we’ve got a racetrack that’s nine miles away from Turfway in direct competition.

“They will be able to invest millions … tens of millions … hundreds of millions in their facility. That’s a
game-changer in many respects.”

Slot and racetrack facts

  • Thoroughbred: Thistledown near Cleveland; Beulah Park near Columbus; River Downs near Cincinnati.
  • Standardbred: Lebanon Raceway, Lebanon; Northfield Park, near Cleveland; Raceway Park, Toledo; Scioto Downs, near Columbus.
  • Racing regulator: Ohio State Racing Commission.
  • Slots regulator: Ohio Lottery Commission.
  • Cost of slots license: $65 million for 10 years for up to 2,500 machines per track.