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SLOTRACING by Clockerbob


"Dog racing or horse racing, it doesn't matter: Those who don't have slot machines, want them. And those who have them are profiting mightily." - Louise Taylor, HERALD-LEADER BUSINESS WRITER, March 22, 1999

Like white-hot tumbling volcanic lava, slot machine gaming has exploded into overdrive, nationally geared by the greed of competing state governments for that quick boost of gaming jobs and tax revenue guaranteed because of the high percentage of winnings returned to players of slots (e.g. 94.4% coinage is returned as winnings to the slot players at Prairie Meadows Casino and Racetrack in Iowa).

     Professional, amateur and collegiate sports are expanding further into the national scene via slick and constant t.v., radio and newspaper presentations and advertisements. T.V. channels, radio programs, talk shows and magazines devoted solely to sports programming are growing (e.g. ESPN the Magazine & The Sports Reporters) as sports franchises are expanding into virgin markets and new consumer-friendly stadiums are being flooded with fans. But, the sport of gambling on horse racing has stalled, despite the fact that horse racing had been granted the status of "Most Favored Industry" by both the administrative and law enforcement branches of our Federal and State governments since its inception.

     MONOPOLY: Stage one of being tagged a "Most Favored Industry" found horse racing being graced with a monopoly on legal gambling for several decades (except for a few states that had buggy and dog racing) and being an untouchable from federal prosecution due to J.Edgar Hoover's penchant for the ponies and racing's WASPy ruling class which was an identical match with the profile of the FBI. This combo of a monopoly on a vice and freedom from prosecution festered a bloated business tumor, similar to those that the Big Three American auto makers of the late seventies, Amtrak and the Post Office exhibit. Of our four industrial patients covered by government insurance: The auto industry developed a leader in Lee Iaccoca and was spurred by competition from imports to return to a robust relationship with its consumers in a highly competitive market. The other three industrial patients are still covered, cradle to present, by government financing and catering. Unable to produce a leader or be spurred by, or to respond to competition they continue to handle their patrons as if under the influence of a bloated business tumor.

     The Post Office and Amtrak grind on as federally protected monopolies, while horse racing cracked when its monopoly was exposed to competition. States, one by one, realized they could dramatically expand their tax revenues and jobs from gaming by ending horse racing's stranglehold on legal gambling.

     Horse racing's monopoly on legal betting was first chiseled a bit when New York started a state lottery in 1967. Maryland followed in 1973; Delaware in 1975; California, 1985; and Florida, 1988. These state lotteries took hold, proving that people wanted to gamble and that horse racing couldn't capitalize on their hundred year head start on the lotteries in some states. Next wack on horse racings gaming monopoly: Indian tribal gaming and Atlantic City's casinos both prospered despite lacking the location and history of Belmont Park, Saratoga, Santa Anita, Arlington and Gulfstream racetracks. People were traveling farther to bet more on slots and casino-style gaming, and neighboring states' governments took notice.

Excerpt: From the Detroit News,7/30/99, "Detroit Casino Opens To Large Crowd"

     "Live Thoroughbred racing may be a memory in the Detroit metropolitan area, but gambling sure isn't. On Thursday, the $225-million MGM Grand casino opened, and about 5,000 people, some of, whom waited almost eight hours to get inside were on hand..."

     WHITE WELFARE: Stage 2 of horse racings' "Most Favored Industry" status finds Delaware, Charles Town, Prairie Meadows, Arlington and San Juan Downs racetracks celebrating grand re-openings due to their respective state governments granting them on-site slot machines (4) or proposed revenue from slots (1, Arlington). These five racetracks that had been shuttered for dwindling fan support still lack the consumer patronage to survive or the internal business drive to compete with other forms of gaming. Yet four are flourishing now with funding from slot machines. Slotracing is born. Pound your 100+ year old horse racing business tumor towards your customers, operate with immunity from federal and state law enforcement oversight, become more organized crime-friendly than consumer-friendly, and be graced with virtually lifetime funding from on-site slots or a percentage of the profits from slots. Slotracing.

Excerpt: 2/24/97 - From Bill Finley, Daily News Sports Writer, "Dover Finds a Slot a Gambling Mecca, But a Harness Bust" Dover, Del.

"There was $224 in the win pool, less than half that to place and show, as the horses came on the track to kick off the card on this Presidents' Day at Dover Downs. Their appearance went mostly unnoticed by the few hundred people milling around in the grandstand, half of which was closed due to lack of interest. Some horse won. Some others lost. No one would remember who was who the minute it was over. There was no life here.

"But there was money. Lots of money. More money than any trainer, owner or driver ever dreamed he or she would be racing for in tiny Delaware at tinier Dover Downs. By the time the 13 races were finished, the horses had competed for $107,640 in purses. On a typical day, the Meadowlands is the only harness track in America that offers more prize money than Dover Downs."

"The slot machines have absolutely given this industry a future in Delaware," said Charles Lockhart, the executive vice president of Cloverleaf Standardbred Owners Association, which represents Dover's horsemen. "Without them, there'd be no more racing."

     The draw of winnings in the upper 90S percentile range of coinage return to slot patrons seems lost on horse racing management. An expert slot patron can bathe in a return as high as 99% on a full pay video poker machine, and even more as a casino's slot club card member. The blinking, colored, lighted action whirls endlessly amid free drinks, short-shirted cocktail waitresses, free parking and no admission.

     Horse racing has a return of around 50% after a patron is roughed up for parking, admission, racing program, clockers, chartman, writers, handicappers, NTRA, stewards, individual tracks' hand-picked testing labs, racing mafia shake, federal take, the state's cut and mis-information. More of the days net winnings leaves through the informationally privileged owner-trainer-jockey parking lot (e.g.Valhol's Arkansas Derby, Cielo Canosa maiden win 8/13 at Del Mar) than the general parking lots in horse racing. In comparison, 100% of the days net winnings leaves through the slot patron's free parking lots.

Excerpt: William Nack, July 20th, 1974, Thoroughbred Record

     "Ruffian had just romped to victory in the Astoria Stakes at Aqueduct on July 10 (1974) when Ogden Phipps spotted trainer Frank Whitely sipping a glass of water near the winner's circle...... "You need more water than she does," kidded Phipps. Only three fillies faced Ruffian in the Astoria, and she made fast work of all of them. Eyes were flashing from the teletimer to Ruffian as she drilled around the far turn. Voices fell to a hush as the board stopped at 21 4/5 for the opening quarter. ... "Braulio Baeza on Laughing Bridge tried to keep in touch but could not. ... "I don't know. I just chaser her," he (Baeza) said. "I could have cut through the centerfield and she still would have beaten me." Value to winner of the July 10th, 1974 Astoria: $16,241.

     I hotwalked Dearly Precious, who won the next edition (1975) of the Astoria ($16,560 value to winner). Dearly Precious had a tan deer nose, a sprinter's build which featured lamb chop buttocks and looking down over her stall's webbing in the evening she was a Renoir reclining on her bed of straw with front legs dressed in white cotton wrappers tucked under. Both Dearly Precious and Ruffian were honored with an NYRA stake race bearing their name.

     July 2nd, 1999, 25 years later, without the benefits of slotracing the Astoria Stakes for two year old fillies went to press from Belmont Park Racetrack (EST 1905) and the 1999 edition of the Astoria had a purse of $100,000 with a value to winner of $65,760.

     July 2nd, 1999, the Iowa Oaks for three year old fillies had a $125,000 purse and was staged at Prairie Meadows Racetrack and Casino (EST April 1995), a five year old business venture. Prairie Meadows Racetrack (EST 1989) was once shuttered because only one gaming item was on the menu: betting on the ponies, forcing it into bankruptcy in 1992. Then Prairie Meadows Racetrack was kissed by horse racing's status as a "Most Favored Industry" and granted slotracing. Now on July 2nd, 1999 at the Prairie Meadows Racetrack and Casino the purse for the Iowa Oaks was $125,000. The day's total on-track handle on the ponies on July 2nd was $118,550 less than the purse for the featured race while the total coin-in for Prairie Meadows Casino for July 2nd, 1999 was $8,940,814.85.

     Listed below are the winners and purses offered on the Iowa Oaks, formerly run as The Heartland Oaks, since slotracing at Prairie Meadows Racetrack and Casino was established in April of 1995,

1995 Beau's Princess - $16,350

1996 Rewana's Okie - $22,590

1997 Lucinda - $50,000

1998 Nickel Classic - $100,000

1999 Golden Temper- $125,000

Prairie Meadows will pay out $14.4 million in purses in 98 days of racing this year, and that total will rise to $19.9 million in 2002.

Excerpt:, WASHINGTON POST. July 9, 1999 "Prairie Meadows hits jackpot thanks to slots" by Andrew Beyer, Altoona, Iowa

"Only a few years ago the track offered some of the cheapest racing in the country, with total purse money averaging about $20,000 per day. Yet over the Fourth of July weekend, high-class horses were lured to this suburb of Des Moines by a $125,000 race for sprinters, a $200,000 stakes for 3-year-olds, and a $350,000 race for older horses. Without slot machines, this couldn't have happened. Without slots, Prairie Meadows wouldn't exist."

WHITE WELFARE: The racetrack that succeeds will be nurtured by aid to a dependent industry provided by the state, such as slotracing. At a successful track, as dramatically as state funding increases, so will horse racing's political contributions, number of political consultants, and political hires. The horse owners, trainers and jockeys will wheel out of their parking lots with bigger cars from "Most Favored Industry" induced increases in purses. The little guy living on the backside of Arlington Park and the bettor on the frontside will be the ones pressed for more juice to pay their latest burden to the politicians.

CHECKMATE: Las Vegas slot players shop for cash rebates, reel slot machines with the highest % return, video poker machines with the best pay tables, food comps and pretty cocktail waitresses. Slot machines account for 80% of the gaming revenue in gambling-diversified Las Vegas.

Because the racetrack slot barns must send a healthy percentage of the revenue generated by slot players to feed horse racing, they will never be able to offer the comps, cash rebates, or as high a win rate on reel slots or video poker machines as a Las Vegas casino.

If Maryland introduces slot playing to their state Las Vegas style, without the halter, then Maryland will generate more jobs, tourism, and tax revenue from legalizing slot machines than Delaware, because slot players shop. The state of Maryland, by simply taking the revenue that is generated by slot players but diverted to horse racing in Delaware and returning that slot revenue to Marylandís slot players in the form of food comps, cash rebates, a higher % return on Marylandís slot machines, better pay tables and conveniently located emporiums built for slot players, will harvest a significant number of Delawareís and surrounding statesí slot players.

Is the gamble on Marylandís future in producing an attractive product for horseplayers or for slot players? Ask Las Vegas or ask Magna Corp., which has reneged on expenditures on backstretch improvements at Laurel Park, Pimlico Race Course, and Bowie Training Center until they know whether or not Magna Corp. will get slot machine revenue.

Copyright © 1999 Robert Kachur