Yet another track that is dead to me

[Kasept]

Originally Posted by philcski

The problem with Churchill's angle here is Steve Williams et al don't give a **** about takeout or what it means, in fact if you talk about takeout he probably would ask for Chinese. "Out of state casino muppet" is exactly what he is. He lives in a town of less than 700 people located more than 2 hours from the nearest proposed casino site. His constituents struggle for food and lodging, perhaps he should work on luring some jobs to the area? A damn hypocrite, just like Sheldon Adelson and his phony Restore the Wire Act bill and all the rest of the "conservative" party these days, preaching small government this and that and freedoms of the people. Freedoms my ass. If I want to pull a slot machine or play poker tonight I should be able to without having to drive 70 miles up I-75 to Cincinnati.

Frankfort knows what takeout is and how handle works considering the regularity with which they reach into racing's pocket including yesterday's .5% ADW fee. Part of a larger strategy to enhance the case for slots/table games.

[cmorioles]

Sounds like a great strategy to me. Let's screw our customers so we can get slots, then we don't need our customers. How can anybody think that is ok if you like racing?

[Kasept]

Originally Posted by cmorioles

Sounds like a great strategy to me. Let's screw our customers so we can get slots, then we don't need our customers. How can anybody think that is ok if you like racing?

They've established that their interest in racing is largely limited to their biggest event(s). They want to maximize the Downs as an entertainment venue.

Who says that anyone is supportive of how they operate?

When you're put out by the corporate sensibility running CDI, the horsemen's position when they exercise their options and tracks run by someone that clearly loves the game and spends his own money, I'm not sure what you have left..

[cmorioles]

Originally Posted by Kasept

They've established that their interest in racing is largely limited to their biggest event(s). They want to maximize the Downs as an entertainment venue.

Who says that anyone is supportive of how they operate?

When you're put out by the corporate sensibility running CDI, the horsemen's position when they exercise their options and tracks run by someone that clearly loves the game and spends his own money, I'm not sure what you have left..

When you say you don't blame them, I took at as support. Sorry if that is wrong, but that is how it read to me.

Frankly, I'm sick of hearing about the need for enhanced gaming! We've all heard the arguments for it, and how it helps the sport, and it is all complete bullcrap. All it does is allow the sport to continue without fixing any of the real problems. I, for one, hope they NEVER get slots.

[Kasept]

Originally Posted by cmorioles

When you say you don't blame them, I took at as support. Sorry if that is wrong, but that is how it read to me.

Frankly, I'm sick of hearing about the need for enhanced gaming! We've all heard the arguments for it, and how it helps the sport, and it is all complete bullcrap. All it does is allow the sport to continue without fixing any of the real problems. I, for one, hope they NEVER get slots.

I said I don't blame them for being frustrated with Frankfort and nearly a decade of inactivity. Try approaching this from a practical standpoint where you're in this business in KY watching as Iowa, Indiana, Pennsylvania and now even Ohio syphon off your horse population with their gaming-enhanced purses. What are you supposed to do? If you say, what does Keeneland do, note that Churchill doesn't have a horse sales business to underwrite their racing program. It's not a defense for raising takeout. It's an explanation of the environment in which the decision was made.

[cmorioles]

Originally Posted by Kasept

I said I don't blame them for being frustrated with Frankfort and nearly a decade of inactivity. Try approaching this from a practical standpoint where you're in this business in KY watching as Iowa, Indiana, Pennsylvania and now even Ohio syphon off your horse population with their gaming-enhanced purses. What are you supposed to do? If you say, what does Keeneland do, note that Churchill doesn't have a horse sales business to underwrite their racing program. It's not a defense for raising takeout. It's an explanation of the environment in which the decision was made.

I do understand why they want slots. I'm from Maryland, grew up on Maryland racing, so I know what happens when all the neighboring states have slots. It sucks. But I also know slots are nothing but a short term cure and getting them does nothing to help horseplayers, absolutely nothing.

Not only don't they help horseplayers, they generally make things worse.

[10 pnt move up]

Originally Posted by cmorioles

When you say you don't blame them, I took at as support. Sorry if that is wrong, but that is how it read to me.

Frankly, I'm sick of hearing about the need for enhanced gaming! We've all heard the arguments for it, and how it helps the sport, and it is all complete bullcrap. All it does is allow the sport to continue without fixing any of the real problems. I, for one, hope they NEVER get slots.

You have a bigger voice than I do but thats been my argument for a long while.

Very bad this crutch they are using.

[ScottJ]

Originally Posted by Kasept

I said I don't blame them for being frustrated with Frankfort and nearly a decade of inactivity. Try approaching this from a practical standpoint where you're in this business in KY watching as Iowa, Indiana, Pennsylvania and now even Ohio syphon off your horse population with their gaming-enhanced purses. What are you supposed to do? If you say, what does Keeneland do, note that Churchill doesn't have a horse sales business to underwrite their racing program. It's not a defense for raising takeout. It's an explanation of the environment in which the decision was made.

Steve,

Thank you for the intelligent discourse and responses in this thread. Obviously, this discussion could descend into an ugly discussion and the community here at Derby Trail has kept the conversation on point.

Earlier in this thread in our first exchange, you mentioned that CDI has an obligation to its shareholders. You are absolutely correct and have succinctly stated CDI's number one problem as a corporate entity. Horse racing and gaming is their vehicle to render shareholder value, their mission. Having doubled their share price in the last three years, you could argue that CDI has been successful.

Our problem is that the sport itself is not their underlying mission. This is what creates the tension between horse enthusiasts and the actual product on offer by CDI. Your messages explain that they are raising takeout in order to potentially force the gaming discussion within the state. In the near-term, this helps neither racing nor the shareholders, but the longer term view is being taken with the shareholder in mind.

One could argue that CDI is holding excessive capacity : excessive real estate holdings and conducting an excessive number of races. These holdings are often gambles on favorable gaming legislation rather than offering a managed horse racing business model.

Is CDI managing their capacity and product effectively? Should they be forced to unlock the embedded value of these holdings either through facility/real estate sales or increasing demand (by decreasing supply). Running the September meeting created further dillution of their overall product and provides a platform to argue about overall supply.

Arguing that CDI is under the gun in Kentucky due to gaming in neighboring states provides an unnecessary free pass to the management team. Clearly, this has not impacted their share price escalation.

As a shareholder that was handed a take-out rate as the solution to business problems on the horizon, I would question why the company would not create a 25-30% across the board rake on all bets if that is indeed the correct business solution.

Ultimately, Keeneland understands its business - horse sales and boutique meetings - and the variables involved in those models. Rather than playing for gaming revenue, the Keeneland company gives the impression of a better managed horse racing entity within the rules that bound Kentucky.

This brings us back to my opening comment where I have decided not to wager on their centerpiece event this year. There are plenty of three year old events during the year, many likely better positioned in the summer months.

As we learned from Wall Street, Lehmans and Bear Stearns were allowed to fail - perhaps horse racing has reached the point where some major players must be allowed to fail as opposed to being propped up from the horse player.

Sincerely, Scott

[tector]

CDI and NYRA make Frank Stronach look like the Jesus Christ of major track owners/operators.

Aside from a few big days, CD racing is not all that in any event. They have killed CRC and are doing the same to FG.

[Cannon Shell]

Originally Posted by cmorioles

I do understand why they want slots. I'm from Maryland, grew up on Maryland racing, so I know what happens when all the neighboring states have slots. It sucks. But I also know slots are nothing but a short term cure and getting them does nothing to help horseplayers, absolutely nothing.

Not only don't they help horseplayers, they generally make things worse.

CDI's interest in slots in KY isnt chiefly to enhance its Churchill downs racing program, it wants them to add to its bottom line period. What makes Churchill Downs (the track) different than virtually every other racetrack that might gets slots is they also have a wildly profitable property as well (Derby/Oaks weekend). While there is little doubt that CDI even remotely "cares" about its racetrack businesses as they have demonstrated, the facts are as Steve outlined, the casino companies and their lobbyists in surrounding states have KY's legislature in their pockets and CDI is obviously willing to maneuver to counter that in anyway possible with racing and its players an afterthought. I'm pretty sure that if Casino's were to be ok'ed in KY that CDI still has a large interest in Ellis's cut as part of the deal with Geary as well.

I read this weekend that because of the addition of the September meet and the avg on track handle dipping below 1.2 million not only can CD raise takeout but also now qualifies to pay a lower pari-mutual tax of 1.5% as opposed of the old rate of 3.5% on bets made in the state. So essentially it seems like they have raised rates while at the same time getting a 2% tax break.

They dont care about racing period. They have invested in racing properties only as a potential leading to racinos/casinos. I expect that once Duchossois passes and there isnt a change from the current chances for a casino in IL that AP will be on the market soon. If Calder isnt profitable from a casino standpoint, they will be on the block as well. If twinspires doesnt remain profitable enough they will dump that too though that is unlikely to happen.

Let's face it horsemen are higher on CDI's list than horse players simply because they are forced to be contractually and via the Wire act. But make no mistake they will throw us under the bus as quickly as they are able to. Like I've said before I dont blame anyone for not betting on their signal. Just don't kid yourself into believing it matters to them.

[freddymo]

Originally Posted by Cannon Shell

CDI's interest in slots in KY isnt chiefly to enhance its Churchill downs racing program, it wants them to add to its bottom line period. What makes Churchill Downs (the track) different than virtually every other racetrack that might gets slots is they also have a wildly profitable property as well (Derby/Oaks weekend). While there is little doubt that CDI even remotely "cares" about its racetrack businesses as they have demonstrated, the facts are as Steve outlined, the casino companies and their lobbyists in surrounding states have KY's legislature in their pockets and CDI is obviously willing to maneuver to counter that in anyway possible with racing and its players an afterthought. I'm pretty sure that if Casino's were to be ok'ed in KY that CDI still has a large interest in Ellis's cut as part of the deal with Geary as well.

I read this weekend that because of the addition of the September meet and the avg on track handle dipping below 1.2 million not only can CD raise takeout but also now qualifies to pay a lower pari-mutual tax of 1.5% as opposed of the old rate of 3.5% on bets made in the state. So essentially it seems like they have raised rates while at the same time getting a 2% tax break.

They dont care about racing period. They have invested in racing properties only as a potential leading to racinos/casinos. I expect that once Duchossois passes and there isnt a change from the current chances for a casino in IL that AP will be on the market soon. If Calder isnt profitable from a casino standpoint, they will be on the block as well. If twinspires doesnt remain profitable enough they will dump that too though that is unlikely to happen.

Let's face it horsemen are higher on CDI's list than horse players simply because they are forced to be contractually and via the Wire act. But make no mistake they will throw us under the bus as quickly as they are able to. Like I've said before I dont blame anyone for not betting on their signal. Just don't kid yourself into believing it matters to them.

It's been a nice equity to own and they have a responsibility to do what is fundamentally in the best interest of share holders. While a issue for race fans and gamblers and the the entirety of the sport, it means zero to the share holders. Doomed

[10 pnt move up]

Originally Posted by Cannon Shell

CDI's interest in slots in KY isnt chiefly to enhance its Churchill downs racing program, it wants them to add to its bottom line period. What makes Churchill Downs (the track) different than virtually every other racetrack that might gets slots is they also have a wildly profitable property as well (Derby/Oaks weekend). While there is little doubt that CDI even remotely "cares" about its racetrack businesses as they have demonstrated, the facts are as Steve outlined, the casino companies and their lobbyists in surrounding states have KY's legislature in their pockets and CDI is obviously willing to maneuver to counter that in anyway possible with racing and its players an afterthought. I'm pretty sure that if Casino's were to be ok'ed in KY that CDI still has a large interest in Ellis's cut as part of the deal with Geary as well.

I read this weekend that because of the addition of the September meet and the avg on track handle dipping below 1.2 million not only can CD raise takeout but also now qualifies to pay a lower pari-mutual tax of 1.5% as opposed of the old rate of 3.5% on bets made in the state. So essentially it seems like they have raised rates while at the same time getting a 2% tax break.

They dont care about racing period. They have invested in racing properties only as a potential leading to racinos/casinos. I expect that once Duchossois passes and there isnt a change from the current chances for a casino in IL that AP will be on the market soon. If Calder isnt profitable from a casino standpoint, they will be on the block as well. If twinspires doesnt remain profitable enough they will dump that too though that is unlikely to happen.

Let's face it horsemen are higher on CDI's list than horse players simply because they are forced to be contractually and via the Wire act. But make no mistake they will throw us under the bus as quickly as they are able to. Like I've said before I dont blame anyone for not betting on their signal. Just don't kid yourself into believing it matters to them.

Racing has no one to blame for the situation you have outlined, anyone could have seen this coming way before the first slot machine was installed.

Reading all the information it sounds like a sound business decision, if track revenue really is meaningless and this is just a means to an end who cares about track takeout related dynamics. They want slots and if thats the bottom line then cant blame them.

Sucks though to be an actual player who bets real money.

Why should someone do that?

[parsixfarms]

Originally Posted by 10 pnt move up

Reading all the information it sounds like a sound business decision, if track revenue really is meaningless and this is just a means to an end who cares about track takeout related dynamics. They want slots and if thats the bottom line then cant blame them.

Maybe I am missing something here, but the argument long advanced by Churchill, Keeneland, KEEP and other racing-related groups is that they need slots in Kentucky in order to save/preserve what is one of Kentucky's signature industries. By taking this action, Churchill transparently shows that it cares little about horse racing. If I were a Kentucky legislator in light of that fact, I would view Churchill as little more than a gaming company whose headquarters just happen to be in Louisville. Why should they be entitled to have slots any more than a company like Penn National, or even one of the Las Vegas-based casino companies? For that reason, I'm not sure it is a sound business/lobbying decision.

[tector]

Sounds like the cheapskates at CDI need to drop a bigger bag on...uh...I mean lobby more intensely...some of the legislators in Franklin.

Guess where they are getting the money to do this "lobbying"?

[10 pnt move up]

Originally Posted by parsixfarms

Maybe I am missing something here, but the argument long advanced by Churchill, Keeneland, KEEP and other racing-related groups is that they need slots in Kentucky in order to save/preserve what is one of Kentucky's signature industries. By taking this action, Churchill transparently shows that it cares little about horse racing. If I were a Kentucky legislator in light of that fact, I would view Churchill as little more than a gaming company whose headquarters just happen to be in Louisville. Why should they be entitled to have slots any more than a company like Penn National, or even one of the Las Vegas-based casino companies? For that reason, I'm not sure it is a sound business/lobbying decision.

CDI is not really a racing organization but a gambling venture that happens to own racetracks.

[OldDog]

Originally Posted by freddymo

It's been a nice equity to own and they have a responsibility to do what is fundamentally in the best interest of share holders. While a issue for race fans and gamblers and the the entirety of the sport, it means zero to the share holders. Doomed

Too bad we can't organize a takeover.

[Cannon Shell]

Originally Posted by 10 pnt move up

Racing has no one to blame for the situation you have outlined, anyone could have seen this coming way before the first slot machine was installed.

Reading all the information it sounds like a sound business decision, if track revenue really is meaningless and this is just a means to an end who cares about track takeout related dynamics. They want slots and if thats the bottom line then cant blame them.

Sucks though to be an actual player who bets real money.

Why should someone do that?

A lot of people saw this coming years ago but most people thought because of the Derby they were a racing company and would always take care of racing. When I relocated to KY, Churchill Downs was by far the most horseman friendly track in the country. Every year from 2005 on they got worse and worse. The track surface budget was cut, maintenance on the backside was cut, services were cut, a lot of veteran employees were let go and clueless people hired to replace them. The most horseman unfriendly thing they ever did was buying youbet and spend virtually every non-Derby marketing dollar driving live handle to Twinspires where bets made via the ADW they only had to give us less than 50% of our on track take. (something like 3% rather than 7%)
They took away the press box and made it the mansion and made the Derby press watch on a TV or from a viewing stand with a bad view and little room. Yeah they are making a little more money but didnt exactly make any friends in the media with that move.

They put up a $12 million dollar TV screen despite their own execs being quoted last week as saying racing was in a depression and they raised the take to make up $8 million. Shareholders are a convenient excuse every time they want to cut something related to racing or raise prices. That isnt saying that they are making poor, big picture moves because it is painfully obvious that they dont intend to try to maximize any racing property outside of Oaks and Derby.

It is a bit childish for us in the industry to feel betrayed because without racing CDI doesnt have slot parlors in S Florida or New Orleans. Most people in the industry have approx zero sense of loyalty. Owners fire trainers at the drop of a hat to run to the latest juice guy. Trainers steal owners off of other trainers lying on their death beds. Most of your help would jump ship if the guy in the next barn paid $50 a week more. Fact is that casinos and slot parlors were coming whether we like it or not, whether we were on board or not. CDI is really no different than Penn National gaming, Greenwood, Harrah's or Gov Cuomo. Everyone of them wants to squeeze racing by the neck till it croaks.

Personally I have had enough. I'm going to stable at Monmouth in the late Spring, summer and into the fall and somewhere in Florida in the winter with perhaps a handful staying at the training center in S jersey as well or maybe Aqueduct. I will do the best I can for the remaining years the game has at tracks that at least make some attempt to make racing the centerpiece. Hopefully we can get 20 more years out of it.

[Cannon Shell]

Originally Posted by parsixfarms

Maybe I am missing something here, but the argument long advanced by Churchill, Keeneland, KEEP and other racing-related groups is that they need slots in Kentucky in order to save/preserve what is one of Kentucky's signature industries. By taking this action, Churchill transparently shows that it cares little about horse racing. If I were a Kentucky legislator in light of that fact, I would view Churchill as little more than a gaming company whose headquarters just happen to be in Louisville. Why should they be entitled to have slots any more than a company like Penn National, or even one of the Las Vegas-based casino companies? For that reason, I'm not sure it is a sound business/lobbying decision.

Churchill has very few friends in the KY legislature. They are perceived (rightly) as arrogant and have made a series of moves and proclamations that have managed to piss off both parties. A few years back they threatened to move the corporate headquarters out of Louisville to Chicago over some issue they had with lawmakers. Tom Meeker made a lot of enemies in the legislature and Evans hasnt exactly endeared himself. There has been a lot of sentiment that because of CDI slots will never come to KY and while it is impossible to know for sure because the out of state casinos companies have spent a lot of lobbying money in KY, they arent any closer than they were 12 years ago.

[JJP]

Funny how 20 years ago, the horsemen were (logically so) opposed to slots. Then they did a 180, and wanted to hook their ship to slots, completely ignoring the longer term problems. Slots are nothing but a band aid solution.

What will be interesting? Eventually we will see expanded sports betting. And when THAT happens, it will be a sledge hammer to the industry.

[Cannon Shell]

Originally Posted by JJP

Funny how 20 years ago, the horsemen were (logically so) opposed to slots. Then they did a 180, and wanted to hook their ship to slots, completely ignoring the longer term problems. Slots are nothing but a band aid solution.

What will be interesting? Eventually we will see expanded sports betting. And when THAT happens, it will be a sledge hammer to the industry.

The longer terms problems would have been short term problems w/o them.

How do you think racing would fare if they built a casinos right down the road from the tracks and we got nothing but competition? While the tracks seem a bit like traitors now that they have morphed into gaming companies a whole lot of them would have surely went under especially when the economy went south. We may not like the direction that many have gone in but we cant race without them either.

I think that it is naive to believe that racing could have figured out some sort effective national strategy that would have stemmed the tide against casino's. Sports betting isnt that close especially if the Supreme Court declines to hear NJ's case. Not to mention that it is already easy to set up an online sports wagering account currently. Anyone who wants to make a wager on a sporting event in this country shouldnt have any problem doing so.

While there is no doubt that the money hasnt exactly been well spent, it is difficult to make a case that w/o slots revenue we would be in a better place.