Racino’s new baby: A problem child?

Jul 6, 2004 4:25 AM

The baby arrived in the early hours of morning, between midnight, and 1 a.m., as so many have, and brought unbounded joy, as so many do.

For the racetracks of Pennsylvania and their horsemen, he was a godsend, as most babies are, and he came none too soon. They are the proud parents of one of the most generous and far-seeing gaming programs born in the new era of alternative gaming.

When the legislators of the Pennsylvania House finally passed the state’s Gaming Act at 1:45 or so last Sunday morning, it changed the fortunes of the tracks, the property taxes of the state’s residents, and the landscape of gaming in the East.

The House legislators’ colleagues in the Senate had passed the bill earlier in the week, 30 to 20, just four more votes than were needed, with nine Republicans joining the 21 Democrats in that body to give governor Ed Rendell his hard-fought and long-sought victory. Their action, and the governor’s signature, which is assured, ultimately can give the Keystone State 61,000 slots at 14 locations from east to west.

Pennsylvania’s four existing tracks — two harness and two thoroughbred — and two on the drawing board but not yet built, in Chester near Philadelphia and Erie in the far northwest corner of the state, are assured of up to 3,000 slots to start and a possible added 2,000 later, subject of the gaming board to be appointed.

Both the track and non-track slots facilities will pay into a Horsemen’s Purse fund, which according to formula will receive 18% of gross revenues. The State Gaming Fund will get 34% of gross terminal revenues. Local governments will get 4%. A Pennsylvania Gaming Economic Development and tourism Fund will get 5%. The tracks will actually pay 12% to purses, with the other 6% coming from non-track facilities.

Bottom line, this will leave tracks with roughly 45% of the gross terminal revenue, but they will have to pay $5 million over the first five years, and from $250,000 to $1 million a year thereafter, for backstretch improvements. And they will have to ante $50 million each, up front, for their license.

If you are in racing in Pennsylvania, even with the $50 million, this is a very good deal.

If you are in racing in neighboring Maryland, it is a very bad deal, unless the speaker of the House, Michael Busch, gets off his high horse and allows Maryland to have slots. Regardless of what Busch says, Maryland gamblers will visit their nearest Pennsylvania location, and Maryland horsemen will leave the state in significant numbers.

If you are in racing in West Virginia, or own a track there, you will experience erosion from gamblers and horsemen heading north across the state border.

And if you are a horseman or track operator in Ohio, you had better kneel down and say a few prayers.

The governor of Ohio, Bob Taft, says he will veto any gambling legislation in his state, and knowledgeable Ohioans seem to think it would be difficult to override his veto. He has a year and a half left in office, and with a racino at Magna’s The Meadows near Pittsburgh an easy drive from eastern Ohio, track operators at Thistledown and Northfield Park near Cleveland can be excused for frowns and fears.

New Jersey tracks now are locked out of seeking slots for four years under their recently signed agreements with Atlantic City casinos to pay them $85 million for purses during that time, in exchange for abandoning their pursuit of slots.

So the baby born early Sunday morning, who kicked and fussed during his 18-month in utero, will continue to keep up the neighbors in Maryland, West Virginia, Ohio and New Jersey with his squalling and his shouts.

There are good babies and bad, as mothers and fathers know from experiencing either restful or restless nights with their newborn.

This big kid may turn out to be both.

His Pennsylvania parents are likely to think he is adorable.

The neighbors next door may find out quickly that he is a noisy brat.