Racing and slots equal a marriage made in Fort Knox

Jun 19, 2007 2:13 AM

For those who missed out on Google when it went public and berserk, we hope deeply that you jumped in 13 years ago when Peter Carlino went public with Penn National Gaming.

Chances are you scoffed at the idea of buying in on a race track just outside Harrisburg, Pennsylvania. It is the state capital, but the nearest things of interest are the Susquehanna River, which flows past its western edges, and the remarkable town of Hershey, some 15 miles or so to the east.

Hershey is the Chocolate Town, worth a trip anytime to smell the delicious sweetness that covers the town, constantly. As a boy, my parents took me there frequently, and it was and is a delight. a delicious sensory treat that still pervades my memory , a lifetime later.

I’m not sure, however, that the sweetness of Hershey is any sweeter than the syrup of dollars that poured over the nearby little town of Grantville last week.

Grantville is where Peter Carlino set up shop with Penn National Race Course in 1994, and from that base he set sights for the sky.

Last week he got there, when two New York big money outfits, Fortress Investment Group and Centerbridge Partners, paid him $6.1 billion for his scattered empire of racetracks, racinos and riverboats he had assembled in those13 years, and paid off another $2.8 billion in Penn National indebtedness.

Pennsylvania was not the only place where money was being tossed around for gambling interests last week. Churchill Downs announced it was paying $80 million to acquire AmericaTab, Bloodstock Research Services and the Thoroughbred Sports Network. That sounds like a solid buy, and adds thousands of ready-made customers to Churchill’s account wagering list.

Elsewhere, the governor of Ohio said no to instant racing video games, dashing the hopes of tracks there to recoup some of what they spent and lost trying to get slots last November. The governor of Ohio, Ted Strickland, apparently was bemused by the argument of whether instant gaming was a game of chance or skill, which was being seriously debated by legislators.

"Without being frivolous about a serious matter," he said, "I would just say I was born at night, but not last night."

Illinois tracks, meanwhile, gambled big, apparently confident they could pull off a grand bluff. A friend of racing, state Rep. Lou Lang of Skokie, a Chicago suburb, introduced a bill to expand gaming. It included slots at Illinois tracks, badly needed by them with Indiana recently getting racinos next door.

By the time Lang’s bill made it to committee, it was so torn and shredded by amendment —including slots at tracks being removed as part of it — that Lang himself voted against it. The Senate had passed the bill by one vote, but the House Gaming Committee destroyed it, by a vote of 20-2.

The hope of Lang and the tracks is that the legislature, faced with serious state budget problems, now will vote for an alternate plan, with slots at tracks part of it. The bill that was defeated in committee provided for four new casinos to join the state’s riverboats in subsidizing the state’s tracks, but the tracks would rather have the slots themselves.

In Maryland, the governor, Martin O’Malley, publicly declared without reservation for slots at tracks, in the face of the threats of the extinction of racing with slots on all sides, in Delaware, West Virginia and now Pennsylvania. The Meadows, 12 miles south of Pittsburgh, opened its temporary racino last week, handling $8.6 million in the first 15 hours of slot operation.

In Delaware, a legislative committee, with bipartisan support, moved a sports betting bill forward, over Gov. Ruth Ann Minner’s strong objections.

Which leaves New York, currently the Wild West of gaming. MGM bowed out weeks ago as operator of slots at Aqueduct. Empire and Excelsior, the two American groups seeking the New York Racing Association franchise, salivated at the prospect of taking over. An Australian group is still bidding big money. And then, out of the blue, governor Elliott Spitzer let it be known that he preferred reorganizing NYRA, giving it another 20 years of control of racing, and giving operation of the slots at Belmont Park and Saratoga Race Course to Excelsior, reportedly his first choice with casino veterans Steve Wynn and Richard Fields as part of the group. Whether he can sell the legislature, which adjourns this week, on that plan, is next week’s serial chapter.