New York state's $25-million (U.S.) loan to the New York Racing Association will stave off a shutdown there, but partisan politics and overregulation stifle racetracks everywhere, Woodbine Entertainment Group chief executive officer David Willmot says.
Prior to Tuesday's loan announcement, the NYRA had threatened to close its three horse-racing tracks - Belmont Park, Saratoga, Aqueduct - soon after the Belmont Stakes on June 5. Its officials had said it did not have enough money to continue to operate. Last week, the NYRA sent a 60-day notice of layoff to its 1,400 employees.
Part of the cash-flow problem stems from the Off-Track Betting Corporation - run by the state but not by the tracks - owing the NYRA $17-million, but declaring bankruptcy earlier this year. Also, although the state allowed casino slots at Aqueduct back in 2001, it still hasn't appointed anybody to run them.
"There's nothing wrong with New York [tracks]that [a repair to]a broken OTB model and a partisan political arena couldn't fix," Willmot said in Toronto. "The biggest thing is that Albany [the state capital]has been fooling around for so many years on the naming of a slot operator, which in that market, would be highly profitable.
"The New York racing product is still good and the wagering in total on that product is still strong. Their problems are much more political and structural."
Willmot said he didn't believe for a moment New York state would allow racing to cease. But the racing association has been "handcuffed" by not being able to run its own business, he added.
Kentucky, once the mecca of the thoroughbred industry, also faces political pressure squeezing its ability to compete against other state industries that have slot machines. A 2008 state task force concluded that, by 2013, other U.S. states will overtake Kentucky, and suck away its business, if politicians don't allow slots in the bluegrass state.
The study showed racetracks with alternative gambling are projected to see a combined increase in annual purses of 45.5 per cent, while tracks that don't have such alternatives will suffer a 11.9-per-cent decline by 2013.
Pennsylvania, Louisiana and West Virginia tracks - all fuelled with slots money - are now attracting Kentucky horsemen. But although racing is Kentucky's prime industry, politicians currently won't budge on allowing slots at tracks - even though projections suggest such machines could inject $780-million over two years into a strained state budget.
"Kentucky is maybe the most frustrating and mystifying jurisdiction of all," Willmot said. "There are only 4.5 million people in Kentucky, but 100,000 jobs in Kentucky are in horse racing. That's a huge number for such a small state. You would think if any place would be receptive to changes, it would be Kentucky."
Willmot said in Kentucky, the old world has trouble accepting issues in the new world. And that its horse people and breeders would "like to wave a wand and go back 40 years."
"But it's just not possible. You've got to react to changes in the world," he said. "It's a classic case of fiddling while Rome burns."
Although regulation is important to ensure the integrity of racing, Willmot said regulation also is acting as a handcuff on racing's ability to be "agile and nimble" to respond to gaming competition.
North of the border, the Canadian Pari-Mutuel Agency, which regulates betting, seems to still be very much in the "go-by-the-book kind of approach," Willmot said. In other words, it interprets the regulations to disallow tracks from trying new things, such as a jackpot bet. CPMA is currently undergoing a review of its regulatory function.
"In every day, dealing with [the CPMA] it's painful to the extent they seem reluctant to consider new forms of distribution, new forms of account wagering, new bet types - more interesting products to the customer," Willmot said.
For example, he says, anybody can walk into a convenience store and buy a lottery ticket, providing only proof of age. "You can blow every cent to your name buying lottery tickets and no one is even going to ask you your name," Willmot said.
But punters trying to register a wagering account with a track must "jump through hoops" to get one. The online form asks for name, gender, birth date, address, home, business and cellphone numbers, social insurance and driver's licence numbers.