Smarty’s influence extends
to racinos

May 18, 2004 5:58 AM

While Smarty Jones was deservedly hogging the nation’s headlines — he is a true Cinderella super horse and will win the Belmont and Triple Crown — there were other very significant things happening last week in gaming and racing.

Here are some of them.

In Illinois, the Democratic governor, Rod Blagojevich, and the Democratic mayor of Chicago, Richard Daley, crossed swords in an unusual high level intraparty duel over a casino for the Windy City. A day after Daley announced he would seek legislative approval for one, Blagojevich announced he would veto the bill if it reached him. Democrats in the Senate, siding with Daley, said they would move forward with major gambling expansion, including the Chicago casino and slots for Illinois’ racetracks.

In Maryland, the racing commission upset all existing applecarts when it overwhelmingly refused, by a 6-1 vote, to approve the $10 million sale of Rosecroft Raceway to a veterinarian who in turn had promised a 90% share to Greenwood Racing, which owns Philadelphia Park. The commission deemed the sale "not in the best interests of racing." Where Rosecroft goes from here remains to be seen — there have been other suitors, including Indiana based Centaur, which still thinks it has a shot even after being counted out by the commission — but thorny issues remain, including thoroughbred and harness racing accord on simulcasting revenues. It now seems likely, however, that Maryland, if not its tracks, will get slots before winter.

In Washington, DC, the Senate passed a tax bill that includes elimination of the 30% withholding tax on foreign residents betting in their countries on U.S. races — highly signifidcant for international simulcasting — and a reduction in the holding period for capital gains on horse sales from 24 months to 12 months. Companion legislation in the House contains neither of these provisions, so it remains to be seen what emerges from conference.

In California, a state appellate court validated a ballot initiative, sponsored by 5 tracks and 11 card rooms, that could put a referendum on the November ballot that would require Indian gaming tribes to pay 25% of their revenues to the state or face the issuance of 30,000 slots to tracks and card rooms, destroying the tribes’ current monopoly.

In Minnesota, where Caesars Entertainment wants to build a casino near the huge Mall of America in Bloomington, the company’s president was told bluntly by a Bloomington state legislator that they were neither wanted nor welcome.

In Michigan, the House voted, 85 to 20, to double the state tax on Detroit’s three casinos, from 18% to 36%. The Senate, which last month approved racino legislation calling for 70% of revenues to the state, has not yet taken up the casino tax proposal.

In Florida, the state Supreme Court ruled that a constitutional amendment proposed by a group called Floridians for a Level Playing Field can go on the statewide ballot next November if the proponents can come up with 488,722 valid voter signatures. The court ruled 7-0 that the proposal of state horse and dog tracks and other gaming interests is valid. The group, which seeks slots at tracks, says it already has more than half of the needed signatures, and $2.2 million in the bank.

In New York, where the New York Racing Association vehemently denied merger talks with Magna Entertainment two months ago, chairman Barry Schwartz now says the two sides are indeed talking, adding that "There are a number of eares where we feel we might be helpful to each other."

In Texas one state senator has introduced new legislation for slots at tracks and sports palaces like the Astrodome in Houston and Reunion Arena in Dallas, and another has said she will, if necessary, talk the measure to death with a filibuster.

All that was going on while Smarty Jones ran the rest of America’s best 3-year-old thoroughbreds into the ground in the Preakness.

He did something else, too. He made it highly likely that his home state will pass legislation for slots at tracks there, and if that happens Maryland and Ohio will follow suit in short order.

Wonderful what a good horse can do.