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Retama Park is in a race for survival
Track officials press case for alternative gaming
By W. Scott Bailey
San Antonio Business Journal
Updated: 5:00 p.m. PT July 2, 2006
Retama Park, fresh off the completion of its spring quarter horse season, suffered a slight dip in terms of total on-track revenue.
But park and industry officials say the future of Texas horse racing threatens to bring much worse news as an increasing number of nearby states continue to lure away big bettors, bigger revenues and top horses.
Retama Park officials say the total amount of money wagered at the Selma, Texas, track during the recently completed quarter horse season was down 1 percent compared to 2005 -- from $9.07 million to just under $9.02 million. That figure includes a 5 percent boost in on-track simulcast wagering, which are the bets placed by Retama Park gamblers on races held at other tracks.
Retama Park Marketing and Publicity Director Doug Vair says on-track simulcast revenue increased from less than $6.2 million in 2005 to $6.5 million this quarter horse season.
But it's the money gamblers are wagering outside of Retama Park and Texas that has industry officials on edge.
"It's pretty simple," says Retama Park CEO Bryan Brown. "The surrounding states, because of their alternative gaming, are taking a portion of the revenue and dedicating it toward their (racing) purses.
"As that happens," Brown continues, "we have fewer horses and lesser horses in Texas. That means the sport is deteriorating here."
According to Vair, some surrounding states are offering racing purses (money paid to owners of winning horses) as high as 300 percent greater than what Retama Park can currently afford to pay.
Survival of the fittest
Vair says Texas track operators are "in a fight for our survival."
Both he and Brown say Texas tracks need some relief from state lawmakers -- soon.
That relief could come with the legalization of video lottery terminals for Texas horse tracks. The terminals are similar to the slot machines that tracks in other states are using to grab business away from Texas.
Proponents of the terminals say they would generate billions of dollars for the state and allow Texas race tracks to compete with those in states like Oklahoma, Louisiana and New Mexico.
Critics argue that such terminals threaten to open Texas up to even more gambling-related concerns. And so far, state lawmakers have been unwilling to pass legislation allowing their use.
Meanwhile, there are more examples that bettors are losing interest in Texas horse tracks and are betting their money elsewhere.
At Retama Park, for example, officials have seen the amount of money wagered on its races by bettors at other tracks drop 37 percent this season compared to last. The amount of that "export" money wagered on Retama Park races was less than $2.8 million this season, park officials say. In 2005, it was more than $4.4 million and three years ago it was nearly $5.1 million.
"This shows what we are up against," Vair says.
Life support
Industry officials say the longer state lawmakers debate alternative gaming options for horse track operators, the less able they will be to compete with tracks in surrounding states. Vair suggests continued inaction could ultimately cost Texas some tracks. It may already be costing the state money and jobs.
A Perryman Group study indicates that the authorization of video lottery terminals at licensed Texas racetracks would create more than 26,000 new jobs and contribute more than $1.2 billion annually in state revenue.
Keep Texas Running, a coalition of organizations supporting the Texas horse racing industry, supports the legalization of video lottery terminals at racetracks.
Tommy Azopardi, executive director of the Texas Horsemen's Partnership, a member of the coalition, says an increasing number of state legislators recognize that Texas "can no longer afford to subsidize other states' governments" by creating conditions that encourage bettors to travel outside the Lone Star State.
Those who have fought legalization of video lottery terminals in Texas include the Baptist General Convention of Texas (BGCT) and the League of United Latin American Citizens. Both groups suggest that legalizing the devices will do more harm than good for Texans.
In a letter posted on the BGCT's Web site, the organization's executive director, Charles Wade, writes: "The state's revenues from gambling come at the cost of what otherwise could have been spent on consumer items, saved or invested for a better and more secure future, or used to pay off debt. The cost is sad and painful."
Despite the opposition, Retama Park's Brown says the industry will be back in front of state lawmakers next session.
"We'll fight as hard as we can until we get this done," he says.
Time may be one of the industry's biggest enemies. Vair says some Texas tracks are already beginning to hemorrhage money.
"Some tracks are on life support," he says. "We have become as lean and mean as we can in staffing and production."
Vair says the addition of video lottery terminals could result in major changes for Retama Park. He says it could lead to the addition of hotels and restaurants on or around the venue, as well as a doubling of park personnel.
Without lawmakers' help, all bets may be off. "Will the industry go away (in Texas)? It sure could," Brown says.
As for Retama Park, Vair says it is owned by the city of Selma, but it is bondholders who stand to gain or lose in the end.
"Our future depends upon how long the bond holders want to keep this thing going," Vair explains.
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