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| Louisville Courier Journal August 24, 2004 Video Gambling Called Key to Horse Industry Larry Smallwood, manager of Swifty Farms in Seymour, listened to testimony yesterday in the Indiana Senate as a committee heard about a possibly bleak future for Indiana's horse racing industry. By Lesley Stedman Weidenbener INDIANAPOLIS — Horsemen laid the groundwork yesterday for another push to gain slot-like gambling machines at Indiana racetracks, making a presentation designed to impress lawmakers with the industry's value to the state. However, there was virtually no discussion of the video gambling machines themselves as those who testified spoke mainly about the state of Indiana's horse racing industry during the two-hour presentation to the Interim Study Committee on Agriculture and Small Business Issues. But the message from horse breeders, owners, trainers and the businesses they support was clear: Without the revenue from video gambling, Indiana's horse racing industry won't survive. "We can support our industry without state support if we have alternative gaming," said horse owner Jerry Walker, using the Statehouse code words for electronic pull-tab machines, which are similar in style and play to slot machines. Walker told lawmakers yesterday that racehorses make up just 6percent of the state's total equine population but account for 25percent of the industry's economic impact. "Why should the state support horse racing?" Walker asked lawmakers. "Because it makes good economic sense." Larry Smallwood, general manager of Swifty Farms in Seymour, told the committee that the Hoosier racing industry is in such decline that he's preparing to sell 16 of the firm's 57 mares this year. The remaining horses will be used for breeding in other states, he said. The farm has four thoroughbred stallions. Last year 160 mares were bred to those stallions, making the foals eligible for valuable purses and awards earmarked for Indiana offspring. This year — with those purses and awards 30percent to 40percent lower — Swifty Farms will breed less than 60 mares to its stallions. "Indiana-breds are just not in demand anymore," Smallwood said. The reason is somewhat complicated. Indiana's modern horse racing industry was essentially born in 1994, with the opening of Hoosier Park in Anderson, a track whose majority owner and operator is Churchill Downs Inc. of Louisville. But lawmakers were concerned that casinos — which were set to open the following year — would steal racing customers, so they established a subsidy for the horse industry. The subsidy — cash taken from casino taxes — was a hit, propping up racing purses far beyond what could have been sustained from betting alone. According to horsemen who testified yesterday, the higher purses meant a boost in the number of horses bred, trained and run in Indiana. But with just one track, there weren't enough races to meet the demand. Many horsemen supported the Indiana Gaming Commission's licensing of a second track — Indiana Downs near Shelbyville — which opened in late 2002. The second track provided many more days of racing, but it also meant that the casino subsidy, which didn't increase, had to be shared and spread across more races. The result has been lower purses, which translates into less revenue for owners and breeders and the rest of the industry. The situation is exacerbated by those states — including New York, West Virginia and most recently Pennsylvania — where lawmakers have approved slot machines or other video gambling to supplement track revenue. In those places, purses have increased so dramatically that breeders and trainers are taking their horses out of Indiana to race. Martin Bruner, a thoroughbred owner and breeder in Batesville, told lawmakers yesterday that three years ago, his horses won four allowance races, finished second twice and third four times. He called it a "good season" that netted him about $115,000 in purses and other financial awards for running Indiana-bred horses. With expenses of about $75,000, Bruner said he earned a profit of roughly $40,000. But because Indiana purses and breeding awards have dropped so dramatically, that same season would actually result in a $22,000 loss today, Bruner said. "I'm an optimistic guy," Bruner told the committee. But "if you put the numbers down and look at the book, you can't do it. We need some help." Horsemen and track owners say that help should come from video gambling, but they have been unsuccessful for several years in selling lawmakers on the idea. That's in part why the study committee's chairman, Sen. Bob Jackman, R-Milroy, scheduled two hours of testimony about the plight of the racing industry. Jackman, a supporter of the gambling machines as a supplement to racing, allowed industry representatives to schedule who would speak. There was no testimony against the proposal. Copyright 2004 The Courier-Journal.  |
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