By Mark Hansel
NKyTribune managing editor
The Future of Horse Racing was the topic at the March Northern Kentucky Chamber of Commerce Eggs ‘N Issues discussion at Receptions Banquet and Event Center in Erlanger.
Moderator Mark Simendinger of Kentucky Speedway and the Kentucky Horse Racing Commission draws a laugh from panelists Mike Battaglia, right, and Steve Cauthen. The March 2018 Eggs ‘N Issues discussion focused on the future of horse racing (photos by Mark Hansel).
The panel included two legends in the sport, former jockey Steve Cauthen of Walton and longtime Turfway Park track announcer Mike Battaglia. Mark Simendinger, general manager of the Kentucky Speedway and a member of the Kentucky Horse Racing Commission, moderated the discussion.
The proliferation of casinos throughout the United States has changed the gambling landscape and negatively impacted the revenue stream at some race tracks.
Ohio and Indiana have standalone casinos but also now allows slot machines at race tracks. That money has helped maintain or boost the purse structure in those states.
The Kentucky Legislature has consistently blocked attempt to allow voters to decide if the state’s race tracks should be permitted to install slot machines.
Kentucky approved historical racing in 2010, using devices that look and operate like a slot machine, but are based on already run races.
Kentucky Downs, Keeneland and Ellis Park have all installed the devices and Churchill Downs has a facility that will include the machines under construction.
In February, Turfway Park announced a $25 million renovation that will include the installation of 500 of the instant racing terminals, sometimes referred to as historical racing machines, but has not identified a timeline for the project.
Battaglia has seen the impact of casinos on the sport and said Kentucky and especially Turfway Park, are getting into the game late, maybe too late.
An American horse racing analyst, race caller, and television broadcaster, Battaglia got his start at Churchill Downs in 1974. Over the course of his career he served as track announcer at Turfway Park, Keeneland, and Churchill Downs where he called 19 Kentucky Derbys during his tenure. He was inducted into the Kentucky Athletic Hall of Fame in 2017.
Roger Babik of Master Provisions talks with legendary jockey Steve Cauthen following Tuesday’s NKY Chamber Eggs ‘N Issues discussion on the future of horse racing.
“Keeneland and Churchill, they have no problem…they are standalone, they’ve done great,” Battaglia said. “Turfway has been struggling because of Belterra and Indiana and that’s why you’ve seen the purses at Turfway drop to the $94,000 level. Tracks like Keeneland, Churchill, Saratoga and Del Mar, nothing is going to affect them. I think they are fine.”
Turfway’s location, near the borders of Indiana and Ohio, subject it to competition from long-established standalone casinos in those states, as well as the racetracks there, that also allow slot machines.
Instant racing has helped boost revenues at some tracks in Kentucky, but it remains to be seen if it will improve the fortunes at Turfway which faces direct competition from nearby facilities with more traditional slot machines.
It is fair to say that Turfway Park has struggled to remain viable since the proliferation of casinos in the region have provided gamblers with other options.
Turfway Park eliminated its Kentucky Cup day of racing, which took place in September and offered key prep races for the November Breeders’ Cup, in 2012. Since then it has also lost its September dates to Churchill Downs and had Kentucky Derby eligibility points for its signature race, now called the Jeff Ruby Steaks, reduced to 20.
The addition of online wagering platforms, such as TVG, which also airs live races from across the country, now makes it possible for bettors to wager and watch races at home, on their phones, or anywhere else they have internet access.
Battaglia said all of those things have created additional challenges for Turfway.
“Churchill Downs took away 30 points for the Kentucky Derby,” Battaglia said. “The winner of the Spiral Stakes (now the Jeff Ruby Steaks) always was going straight to the Derby because he got 50 points and that really hurts. We’ve got to get that built back up – we’ve got to get the purses built back up, we’ve got to get the 50 points back up and I’d like to see us get our September dates back.”
Cauthen is now 57 and retired, but is still referred to in some quarters as “The Kid,” a nickname he picked up while winning races in record numbers as a teenager. Cauthen was the youngest jockey to win the U.S. Triple Crown (1978), and the only jockey to have won both the Kentucky Derby (1978) and England’s Derby Stakes (1985 & 1987). His career includes numerous racing wins outside of the United States including the French Derby, Irish Derby, and Italian Derby. 2018 marks the 40th anniversary of his U.S. Triple Crown win.
Cauthen has remained active in horse racing. He purchased a breeding and training facility in Verona called Dreamfields, which he recently sold to New Day Equine and has owned and bred horses throughout his post-racing life.
He continues to work in racing management with Dixiana Farms in Lexington and moves horses throughout the country.
He said casino gambling has really allowed New York race tracks to improve their purse structure.
“Looking back over time, New York and California racing were the best and Kentucky and the Midwest were right behind,” Cauthen said. “Churchill and Keeneland, now that they have stepped into the gaming side of it can keep their purses up. They’ve always had good purses and good horse attract the best handle, but you have to something to boost the purses, so you get better races.”
Cauthen used a typical claiming race as an example of why trainers and owners began to look outside of Kentucky to run their horses
A claiming race provides an opportunity for a rival owner to purchase, or “claim” a horse for a predetermined price. The horses are usually not the same caliber as allowance or stakes horse which are protected from purchase when they run in those races. There is a risk involved in running a horse in a claiming race, but the reward is a better opportunity to pick up the winners share of the purse.
The claiming price can differ significantly from the race purse which can be boosted through revenues from casino gaming and that is what has happened in Kentucky’s neighboring states.
“I remember back when I had a few horses racing around here, at Turfway Park and I was racing a horse in a $7,500 claiming race, it was running for a $7,500 purse,” Cauthen said. “At that time Mountaineer Park (in West Virginia, which also has casino gaming), I could send him up there and run him (in the same $7,500 claiming race) for a $22,000 purse.”
That has changed over time as some racing jurisdictions, including West Virginia, have reduced the amount of revenues designated for purse money from casinos at race tracks.
An argument often used by Kentucky’s legislators for not allowing voters to decide if slot machines should be allowed at race tracks in the Commonwealth is that the additional revenue generated can be shifted away from purses. It can be distributed elsewhere or, as states come to rely on the revenue and casino owners look for a stronger return on their investment, they can lobby for a larger portion to be returned to them.
As one Kentucky legislator has said repeatedly, “Casino owners see race tracks the way brothels view piano players. Sooner or later, you realize you don’t need the piano player.”
The consensus in the industry is that horse racing faces challenges, including the need to attract national attention beyond signature events such as the Triple Crown and Breeders’ Cup races, but will remain viable enough to achieve success at its larger venues. There is also no question that casino revenue can provide a revenue boost to some mid-level race tracks, and by extension a state’s breeding industry, if managed properly.
The jury is still out, however, on how instant gaming at Turfway Park which is “late to the game,” and faces strong, established competition in neighboring states, with what many view as a superior gambling option, will fare.
Turfway Park’s owners, which includes the group that owns Jack Casino in Cincinnati, appear ready to gamble $25 million that it will succeed.
Eggs ‘N Issues takes place monthly at Receptions Banquet and Conference Center – South in Erlanger. For more information on Eggs “N Issues and other NKY Chamber programs and events, click here.
Contact Mark Hansel at mark.hansel@nkytrib.com
