CHARLES TOWN – A bill that would reduce the minimum number of racing days each year at state racetracks has stalled in the Senate Judiciary Committee, but that hasn’t stopped Horsemen’s Benevolent Protection Association President Randy Funkhouser from worrying about it.
Last week, Funkhouser squared off before the Jefferson County Commission with Hollywood Casino General Manager Al Britton, who says measures to reduce racing days are needed to offset losses from competition in surrounding states that have introduced tables games. “They have as many lobbyists as we’ve ever seen up there,” Funkhouser said, adding that the states racetracks are pushing hard for tax reductions, race day reductions and measures that would have the effect of reducing the total purse fund.
“The horsemen are very concerned about this,” Funkhouser told the commission, adding that they were “talking about leaving and closing down and so forth.”
Funkhouser said that the expenses for horsemen, especially feed, are continually rising though purses are not, making the horse racing industry more and more vulnerable.
Britton said, though SB 255 would reduce the minimum number of racing days by almost one third, the number of days would have to be determined in later negotiations with the HBPA.
“I want to point out that [150 days] is the minimum,” Britton said. “I also want to remind the commission that currently the minimum is 220 days, but we have negotiated with the horsemen to run 235 days. If that bill were to be successful …it does not mean that Charles Town Races would go to 150 days. We would negotiate that, as we have in the past, with the Charles Town HBPA.”
“All we are looking for is flexibility,” he said, adding that simply having more races would not necessarily be more profitable. “It has to do with what horses are available. In order for races to be successful, you have to have full fields.”
Funkhouser said that tracks throughout the country are moving to reduce the number of racing days. He said he worries this trend will lead the racing community into a “gypsy” lifestyle, where horsemen must travel from track to track rather than remaining at one track for year-round racing.
“What they really want are 30 to 60 day boutique meets,” Funkhouser said. “I think that if they were to get that 150-day minimum, there is no way in the world they would give us 235 days again.”
Britton said the introduction of table games at Maryland Live in Anne Arundel County, Md., and new casinos in Baltimore and at National Harbor set to come online in the next few years are making the new measures necessary.
“We took a hit when Maryland Live opened in Anne Arundel. We’ve seen a decline in the (slots) revenue of something in the 15 to 17 percent range,” he said.
Britton said tax reductions are needed to free up funds for more capital investment and marketing to help the casino compete against new competition.
“I think everyone anticipated even a greater impact from (the opening of Maryland Live) and so far, I think we’ve been able to compete quite well. And that is because we have invested in this property to the tune of over $400 million to date.”
Commissioners said they were concerned about the potential of revenue losses from the casino. They pointed out that 20 percent of the county’s budget comes directly from Hollywood Casino, and that they had only projected a 5 percent decline in slots revenue in the coming year.
Britton said West Virginia casinos have higher tax burdens than most of their competition. “We pay one of the highest blended rate taxes in the country,” he said. “Our blended rate is in the high 40s to low 50s.”
He said those taxes are collected from gross revenue, not from profits.
“We don’t know how Maryland Live is going to use their decreased tax burden to compete, whether through marketing or what,” he said. “As long as we have tax stability, we are able to compete. But what throws a wrench in that is the competition. The reduction in table games tax, right now, is primarily to prevent or persuade Wheeling Island not to close down their table games.”
But Maria Catignani, executive director of the HBPA, argues that those reductions will come at the expense of many more jobs in the horse racing industry.
“They’re doing that in an effort to save the jobs of 105 people,” Catignani said. “But in the grand scheme of things, that $6 million comes out of purses, and that is going to effect the lives of 1,500 people.”
She said a 2011 study completed by the West Virginia University Bureau of Business and Economic Research indicated that horse racing in Jefferson County generates $211 million in economic activity in the local area.
“The churn of the money in the community is incredible,” she said.