Beyer On The Money

[miff]

What will happen if subsidies to racetracks are cut back or eliminated? Check out Andy Beyers whole article in the Wasingtomn Post.



By Andrew Beyer, Published: March 19The Washington Post

At a time when the horse racing business has suffered a serious decline, one segment of the sport is enjoying a bonanza. These are great times for horsemen in states where purses are subsidized by revenue from slot machines.

Owners and trainers at Parx — the former Philadelphia Park— must think that they have died and gone to heaven when they run a bottom-level $5,000 claimer in a race with a $25,000 purse — plus aThese windfalls exist because many states, when they legalized slots, opted to install them in racetracks and decided to aid the sport by earmarking a certain percentage of revenues for purses and breeder awards. But what the state gives, the state can take away, and many are taking a fresh look at their largesse to the horse business:

●In Pennsylvania, Gov. Tom Corbett has proposed cutting $72 million of subsidies to horse racing and breeding to pay for other agricultural projects.

●In Ontario, the provincial government has proposed ending all slots payments to the horse racing industry as of 2013.

●In Indiana, the state's inspector general advocated slashing the subsidy for horse racing.

●In New Jersey, Gov. Chris Christie ended state support of racing and blasted leaders of the sport for "extorting the taxpayers for millions of dollars in subsidies to their industry."

Horsemen have reacted with shock and outrage to such proposals, but they should have seen these haymakers coming. Many state governments are under severe financial pressure and are struggling to maintain basic services for their citizens. As politicians look for sources of revenue, they can't ignore the millions of dollars now flowing into horse racing, and they can readily frame populist arguments that the money is being misallocated.

Christie said: "I am no longer going to permit millionaire horsemen to take money . . . from the taxpayers of the state to fund their industry." In Ontario, Education Minister Laurel Broten sent out a news release declaring, "We simply can't afford to support . . . horse racing subsidies. . . . when the . . . money could get better health care for our seniors and full-day kindergarten for our 4- and 5-year-olds."

In most places, the racing/slot machine relationships developed along similar lines. In some cases, a racetrack couldn't survive on its own merits, but it was such an important part of its community that the public supported legalizing slots to keep it alive. (This was the case at Charles Town.)

In others, proposals for legalized slots faced a lot of not-in-my-backyard opposition, and the perfect answer was to put the slots in an existing gambling facility — a racetrack. The track, of course, got a percentage of the profits for running the operation. The rationale for allotting money to purses and breeders' awards (rather than, say, health care for seniors) was to revive the sport by improving the product and attracting more fans.

(continued in Washington Post)

[trackjohn]

I think it was Thomas Jefferson who said \"A government that is big enough to give its citizens  what they need is big enough to take it away\"...

[alm]

Is Chris Christie talking about millionaire horsemen like ME?  

The only thing missing in my pocket are the millions.  What a stupid remark from a guy who never met a free meal he didn\'t like.  

New Jersey SFB,POS.

[JimP]

I am a long time fan of this sport, but I don\'t see why it should be subsidized. Any business should stand on its own. When the subsidies are removed the industry economics will adjust accordingly. If the industry can\'t sustain itself without subsidies then I guess it shouldn\'t exist.

[alm]

JimP Wrote:
-------------------------------------------------------
> I am a long time fan of this sport, but I don\'t
> see why it should be subsidized. Any business
> should stand on its own. When the subsidies are
> removed the industry economics will adjust
> accordingly. If the industry can\'t sustain itself
> without subsidies then I guess it shouldn\'t exist.


I am not sure whether you are calling income from racetrack related casinos a subsidy of purses.  That\'s a ridiculous conjunction if you are.  Stop and think for a minute, do the poker tables subsidize the blackjack tables?  Those who breed and race horses have been adjusting to the economic realities of the business for many years.  They are breeding fewer and fewer horses, for example.  Rationalizing the gambling industry is the same as rationalizing any industry.  Changes are  made to strengthen the entire industry and the inclusion of casino dollars into the horseracing purse structure is nothing more than a rationalization as I see it.

[TreadHead]

The only ridiculous conjunction I see is the using of a broad brush to paint horse racing and brick-mortar casino gaming into the same bucket.  The 2 have practically nothing to do with each other, including the fact that casino gaming is house-advantage based and not parimutuel.  

If regulations allowed it, businesses would put up slots rooms in places like the old Jeep plant in Toledo to help keep those businesses afloat too, but archaic laws prevent that from happening in most states.  Owners of racetracks should not be any more entitled to receive a windfall of casino profits any more the the owners of any other business, but they ridiculously try to dumb down the discussion saying it is all \"gambling\" and they should be entitled.

If the few great minds we have left in this game would focus their efforts on how to actually save racing instead of how to get more casino money integrated or crying over how that casino money is being taken away, then it might be possible to make some progress.

[JimP]

I believe you are confusing the business of horse racing from the business of gambling on horse races. Maybe there is an argument for the congruence of casino gambling and horse race gambling. I personally think it is a reach, but I can at least see the argument. But as far as any natural congruence between casino gambling and horse racing, I just don\'t see it. The relationship is an artificial one in my opinion, and exists purely as a subsidy from one business to another. Everyone is entitled to have their own opinion about such cross subsidization. Mine just happens to be that each business should stand on its own.

[HP]

Once upon a time in New Jersey there were racetracks and no casinos.  I think part of the deal with what are being called \"subsidies\" was that one reason the racetracks didn\'t kick up more of a stink about the casinos coming in was because the casinos agreed to pay out a percentage to the tracks to smooth things out?  Since racing was the only game in town and would be hurt by the casinos?  Now that the casinos are going broke everyone is giving the tracks a swift kick in the ass?  

The ugly part of this, beyond anything personal about Christie, is that horseracing actually creates a fair amount of jobs?  For people that aren\'t millionaires?  But a lot of those jobs go to people that aren\'t on Christie\'s radar?  Poor people, grooms and the like?  You hear about horse racing millionaires but not a peep about the lost jobs.  Figures.  

God forbid Christie would talk about the real thing killing New Jersey.  If you drive for 15 minutes in any direction in New Jersey you go through five separate towns.  Each with its own bureaucracy and administration.  Unless a lot of this is consolidated on a county-wide basis all these towns are going to go broke, and it\'s just a matter of when.  

Of course NOBODY in these towns is going to vote for or initiate a consolidation program because the very people making that decision would lose their jobs.  So Christie looks for a soft landing where he can act tough and he finds HORSE RACING.  No matter how you feel about this argument regarding casinos, there are plainly MUCH bigger fish to fry that would have a MUCH bigger impact on the financial health of New Jersey, but those fish are not politically expedient to fry.  Christie is a bully plain and simple.  In my town their brilliant idea was to lay off the school custodians.  The superintendent oversees about 1,500 kids and makes over $220K.  Less than a mile away there\'s another guy overseeing 1,500 kids making the same salary.  Combine the jobs?  Save hundreds of thousands of dollars?  Leadership on this issue is not on Christie\'s radar.  HORSE RACING is the problem!  Figures they attack the one thing I like out here.  

HP

[alm]

TreadHead Wrote:
-------------------------------------------------------
> The only ridiculous conjunction I see is the using
> of a broad brush to paint horse racing and
> brick-mortar casino gaming into the same bucket.
> The 2 have practically nothing to do with each
> other, including the fact that casino gaming is
> house-advantage based and not parimutuel.  
>
> If regulations allowed it, businesses would put up
> slots rooms in places like the old Jeep plant in
> Toledo to help keep those businesses afloat too,
> but archaic laws prevent that from happening in
> most states.  Owners of racetracks should not be
> any more entitled to receive a windfall of casino
> profits any more the the owners of any other
> business, but they ridiculously try to dumb down
> the discussion saying it is all \"gambling\" and
> they should be entitled.
>
> If the few great minds we have left in this game
> would focus their efforts on how to actually save
> racing instead of how to get more casino money
> integrated or crying over how that casino money is
> being taken away, then it might be possible to
> make some progress.


Excuse me.  You think there would even BE horseracing without gambling?  You like to watch horses running in circles for the thrill of it?  That\'s another planet from mine.

There may be a dozen varieties of ways to connect gambling concepts, but personally I would prefer to see tracks with casinos helping satisfy the animal spirits than to watch the mob move in on the Indians to set up mini-Las Vegas\' around the country with NO connection to the sport I love.

When you go getting philosophical about businesses standing on their own you prove only one thing....you have no clue.

[JimP]

LOL.

[Funny Cide]

alm Wrote:
-------------------------------------------------------
>
> Excuse me.  You think there would even BE
> horseracing without gambling?  You like to watch
> horses running in circles for the thrill of it?
> That\'s another planet from mine.
>
> There may be a dozen varieties of ways to connect
> gambling concepts, but personally I would prefer
> to see tracks with casinos helping satisfy the
> animal spirits than to watch the mob move in on
> the Indians to set up mini-Las Vegas\' around the
> country with NO connection to the sport I love.
>
> When you go getting philosophical about businesses
> standing on their own you prove only one
> thing....you have no clue.

JimP is the one who gets it.  Slots have nothing to do with horse racing.  To say  they\'re related and therefore slots should fund racing makes as much sense as saying the NASCAR should fund horse racing since they\'re both racing.

[alm]

Funny Cide Wrote:
-------------------------------------------------------
> alm Wrote:
> --------------------------------------------------
> -----
> >
> > Excuse me.  You think there would even BE
> > horseracing without gambling?  You like to
> watch
> > horses running in circles for the thrill of it?
>
> > That\'s another planet from mine.
> >
> > There may be a dozen varieties of ways to
> connect
> > gambling concepts, but personally I would
> prefer
> > to see tracks with casinos helping satisfy the
> > animal spirits than to watch the mob move in on
> > the Indians to set up mini-Las Vegas\' around
> the
> > country with NO connection to the sport I love.
> >
> > When you go getting philosophical about
> businesses
> > standing on their own you prove only one
> > thing....you have no clue.
>
> JimP is the one who gets it.  Slots have nothing
> to do with horse racing.  To say  they\'re related
> and therefore slots should fund racing makes as
> much sense as saying the NASCAR should fund horse
> racing since they\'re both racing.


I don\'t care if they are related or if they are on different sides of the planet.  I\'m a horse owner and anything that jumps a purse, therefore giving me a \'better\' shot at earning dollars, is of great interest to me.  I daresay everyone in the business would have to say the same thing.  

If you look at Berkshire Hathaway\'s portfolio of corporations you will find the same logic prevails.  Very few of them relate to the others under the umbrella, except for one quality: they make money or they are out.  If every horse owner determined he or she could not make money on any of their horses, they would cut their losses...they would HAVE to.  Then you would be back to betting on roulette wheels.  Then you\'ll have nothing but casinos.  There would be no racing.  

I don\'t believe you are watching horse races for the thrill of guessing who\'s best.  Or maybe you are.  LOL to me?  That\'s all I\'m looking for.

[TreadHead]

It\'s funny Alm, you just summed up the racing industry\'s entire problem with this post, you care only about your self-interests and not about what is logically or morally correct.  At least you are honest about it.

[alm]

How many horses do you have in training pal?  How many horses have you bred in your life?  Seriously, I would like to know.

[RICH]

Yes, big purses are good, but it\'s only temporary, racing is basically a drag now, I don\'t need to go into details, you all know it already. I hope it turns into something like Dubai or Japan, maybe Europe, but anything but this. All I care about now is Belmont and Saratoga, and based on the last 2 years, that\'s a drag, its depressing. I do alot more gardening now. By the way, I been doing this for 40 yrs