Joker Casino
Racinos Keep the Horses Running
Behind the glamor of hosting Triple Crown or headliner events like the Kentucky Derby, the Breeders' Cup, the Preakness Stakes and the Pimlico Special, famous racetracks like Churchill Downs and Pimlico face the grim reality of a declining live gate and handle. For famous and obscure horse racing venues alike, bet volume had consistently, if gradually, declined at least since the 1980s. One successful counter-strategy has been to integrate other forms of gaming.
Come now the racino, a combined race track and casino. In the beginning, track owners filed applications with licensing boards solely for video lottery terminals (VLT's) and slot machines. This had the dual advantage of minimizing operating expenses and of capitalizing on the tremendous popularity of such machines. After all, Bally alone has 345,000 slot machines installed worldwide, or an average of 73 in each of an estimated 4,727 casinos, horse tracks, greyhound tracks, racinos and cruise ships eager to provide the thrills, amenities and service gamers have come to expect.
The evolution really began when West Virginia assented to the racino concept in 1990. And this gaming variant got off the ground in 1994 when MTR Gaming Group installed video lottery terminals in Mountaineer Race Track & Gaming Resort in Chester, West Virginia.
Typically, VLT and slot machine revenues generated healthy cash surpluses. State taxes and payout's to lucky gamblers absorbed just half the dollar income. That left a great deal more that track owners usually divided evenly between race purses and corporate profits. Such was the revenue stream from a total of 3,200 VLT's that the Mountaineer Gaming Group was able to offer hefty race purses, certainly more attractive than those of any track in the surrounding states. Almost overnight, Mountaineer shed its seedy reputation.
Owners of contender thoroughbreds jostled for a place on the schedule. By 2005, Mountaineer had no less than 28 stakes and handicaps year-round.
The introduction of reel-spinning slot machines, first put to a vote in Iowa in 1994, revealed just how successful racinos could be. After the vote had passed, Polk County used a $27 million bond issue to renovate the Prairie Meadows clubhouse into a casino with no less than 1,100 slot machines. Twelve months to the date after the racino opened, the reel-spinning slot machines had thrown off fully $119.3 million in revenue.
The county quickly paid off the year-earlier bond issue, as well as a $36.6 million issue that had been used to construct Prairie Meadows in the first place. But the really important development was that the track was now able to dangle a six-fold increase in prize money for horse owners and jockeys.
A similar success story occurred at Delpark in Delaware. The addition of a casino to the race track and golf course complex threw off so much revenue Delpark ranked fifth nationally in average racing purse offered during the 2005 season.
As of 2006, racinos were legal in at least ten states: Delaware (since 1995), Iowa, Louisiana, Maine, New Mexico, New York, Rhode Island (since 1992), West Virginia, Florida (since 2004) and Pennsylvania (2006). Many racinos have now evolved to offer the popular table games roulette, poker and blackjack.
All in all, the strategic move of incorporating at least slot machines in hoary horse and greyhound racing tracks generated the kind of purses needed to draw more promising thoroughbreds and more first-time competitors. The race tracks have therefore been able to revitalize their core business.