THE BLAME GAME, PART II

Last week, I wrote about the 800 lbs. gorillas known as ADW companies, and how they are going to impact the industry in Virginia. Some time post Xmas, I’ll address the big picture and the role ADW may play in the future of our entire industry.

Today, I want to focus on what has happened in Virginia since Colonial Downs opened and why the industry has shrunk and not grown as we all had hoped. I’m going to endeavor to be brief…

I hear a fair amount of the blame game played about the situation here in the Commonwealth. Some fingers point at the VTA and the Virginia H.B.P.A. which (as previously noted here) befuddles me. The majority of fingers typically point at the racetrack.

However, truth be told, the real bad guy is the enabling legislation and the Virginia General Assembly (along with several Governors) who haven't had the political courage, conviction or the dedication to the economic, agricultural and land use issues related to what we do to take a position which would allow our shrinking industry to recover (and perhaps, some day, grow).

First, a little about the racetrack, the most commonly blamed party. I worked for the Maryland Jockey Club for almost ten years. I attended seemingly zillions of senior staff meetings so I know how racetrack management thinks and the issues with which they are confronted. Some of what CLN does makes sense to me from a business standpoint, some of it does not.

None the less, the main point is to remember that the racetrack is a business endeavoring to make a profit. If it were a non-profit platform designed to simply further the economic interests of the other stakeholders, things would be much different. There are non-profit racetracks and race meets in America and some of them work splendidly – Keeneland, Del Mar and Oak Tree at Santa Anita come to mind.

But, Colonial Downs is not a non-profit, it’s a for-profit business and it is the responsibility of the folks who work there to try and make money. That obviously changes the dynamic on many of the key issues – racing days, purses, ADW contracts, signal sales, etc.

So clearly their efforts to make a profit with limited resources is a hurdle for our industry to overcome, but it isn't the only reason for the downward trends - or even the primary reason.

So who, or what, is to blame?

For starters, I don’t believe in the theory of “singular cause.” Things rarely happen for one reason. More typically a confluence of relevant issues/factors causes change. The decline in Virginia racing and breeding has been caused by two big factors.

The first is competition from other states. Pretty simple math here. We have 40-some days of racing and a $1.1 million Breeders Fund. Surrounding states, some fueled by alternative gaming, have year-around racing and Breeders Funds ranging from $4 million to almost $10 million. While the regional industry isn’t in great shape, the number of economic opportunities available in WV, MD and PA have caused many Virginians to do business elsewhere.

The second reason is…drum roll…the government. Yes, they are supposed to be our friends, and they are supposed to help us in a time of need. But, unlike tobacco, which they rescued not so long ago in spite of the overwhelming evidence that it rather consistently kills people, Virginia’s government can’t get over its moral and/or intellectual opposition to what fuels the horse racing and breeding engine – pari-mutuel wagering. "Gambling" is the big heavy yoke we all wear around our collective necks.

I won’t bore you with a long dissertation about how the lottery and pari-mutuel differ. But I will tell you that one has 4,900 outlets and one has 9, and you know which is which. One obviously was never saddled with nearly-impossible-to-pass local referendums while the other was, and again it’s easy to figure out mathematically which is which.

Every attempt the industry has made to expand the traditional OTB or the newer ADW economic models are consistently met with the cry of we oppose “the expansion of gambling.” What they mean to say is “we oppose the expansion of YOUR gambling while our gambling expands every time the lottery invents a new game or a new convenient store/gas station opens.”

This is exasperating, to say the least.

Now that we have a new legislature and a new Governor-elect, it is time for us to sit down with these folks yet again and ask them some very simple questions? Everybody wants to talk about the economy, jobs, taxes and Virginia’s deficit. So, does the Virginia government (both individually and collectively) really care about the economic well-being of the participants in the Thoroughbred racing and breeding industry? They say they care about jobs, but do they care about our jobs?

In this brutal economy, are they going to allow their intellectual and or moral issues relevant to pari-mutuel racing to further the financial suffering of the industry’s participants? Are they going to allow their personal issues to negatively impact Virginia’s economy, the tax base and ultimately the deficits we are struggling to overcome.

After the holidays, we need to start asking those questions. Are they going to help us, or are they going to sentence more Virginians to economic hardship and/or unemployment? Do they care about our jobs, our land, our people, out contribution to the economy and the tax base?

It’s time to point the finger at the right folks and ask the right questions.

We are currently working with the Governor-elects transition team. All we want for Christmas is the right answers to these questions.

Happy Holidays everybody. -- GP

(Note: The opinion stated above is that of the author. It does not reflect the position of the Virginia Thoroughbred Association or the Virginia H.B.P.A, their board of directors or their members individually or collectively.)