Wagers down 15 percent at once first-rate venue
This should be a showcase week for the Fair Grounds.
Saturday’s 101st running of the Louisiana Derby includes a number of Kentucky Derby contenders. The Fair Grounds Oaks, also set for Saturday, should produce the favorite for the Kentucky Oaks, the first leg of the Triple Crown for fillies. And the return of 2013 Belmont Stakes winner Palace Malice highlights an extraordinary field for the Louisiana Handicap, yet another major event on the Saturday calendar.
Instead, these are troubled times for the Gentilly racetrack — troubled enough to lend serious doubt to the Fair Grounds’ ability to maintain its first-rate reputation, especially when thoroughbred racing is struggling nationwide to at least stabilize a declining fan base.
The track estimates a 15 percent drop in the total amount wagered on races from the 2012-13 season. Officials also have cut purses and eliminated stakes races twice this year due to the decreased revenue.
The downturn is part of a long-term decline in racing; handles statewide in Louisiana are down 32 percent from 2007. But not all tracks have suffered equally. In fact, competitors like Tampa Bay Downs and Oaklawn Park in Hot Springs, Ark., are increasing the quality of their races.
“We’ve had to ship most of our fillies and mares back to Kentucky because there aren’t enough races worth keeping them here,” said trainer Larry Jones, who started the season with 40 horses and is ending it with only three. “And we’re having a hard time convincing the owners that this is a good place to come back to.
“We’ve always enjoyed it here and had success here, but right now, things are in a bad cycle. It’s tough.”
When Churchill Downs Inc. purchased the Fair Grounds when the track was in bankruptcy in 2004, racing fans took it as a positive sign that the parent company of Churchill Downs in Louisville, Ky. — and the owner of racing’s most-storied event — was investing in New Orleans. But a decade later, the shine has come off: CDI is under fire from the local racing community, as well as many of the owners and trainers who have used the track as their primary winter base for years.
They say the problems include a lack of maintenance, particularly of the turf course, where approximately half of the scheduled races have been moved to the dirt or canceled because of drainage issues; the track’s focus on the slots and video poker instead of amenities for horse-racing fans; and officials’ general attitude favoring short-term, bottom-line decisions to the detriment of the sport.
They fear that the Fair Grounds will go the way of Hollywood Park, a former CDI property that closed last year, or Calder Race Course, a CDI-owned track that has suffered a major decline due to what the industry considers neglectful practices by the owners.
“The Fair Grounds is an institution which is part of the fabric of our city and our state,” said Bryan Wagner, a former national handicap contest winner and husband of Louisiana Racing Commission member Judy Wagner. “But Churchill Downs is making money off it while letting it go downhill.”
Things boiled over at a Feb. 17 meeting of the state racing commission when Fair Grounds officials presented a progress report.
“I’m not directing this at anybody personally, but as a supporter of the Fair Grounds and somebody who has been going to the Fair Grounds for 30-plus years, we are seeing a deterioration in racing like I have never seen before … a decrease in handle and ... the erosion of services within the racetrack,” Commissioner Thomas Grimstead said after hearing the Fair Grounds’ presentation.
The situation is particularly disturbing to those believe that CDI now views itself more as a gaming company than a standard-bearer of the sport associated with its name.
In 2013, the company reported record net revenue of $779.3 million from its varied interests, including casinos in Mississippi and Ohio, online gaming enterprises, and five racetracks. Less than half of the revenue came from the tracks.
Robert Evans, CDI’s chairman and chief executive office, has acknowledged that while Churchill Downs, and in particular the Kentucky Derby, is the company’s brand, horse racing is no longer the centerpiece of its business. The company has even moved its business headquarters from underneath the fabled twin spires of Churchill Downs to an office building 15 miles away.
“Unfortunately, we have a partner in Churchill Downs which doesn’t have the same goals that horse racing in Louisiana has,” said Stanley Seelig, president of the Louisiana Horsemen’s Protection Benevolent Association, which represents owners and trainers. “If they can’t do the job, let’s give the license to somebody that will put horse racing first.”
State Rep. Patrick Connick, R-Marrero, is proposing action this legislative session that would allow the state to do just that.
HB 808 would give the Louisiana Racing Commission the power to suspend the track’s valuable slots license if the track isn’t properly maintained. Another Connick bill would mandate that 10 percent of slots revenue to go toward upgrades at the track.
“The Fair Grounds is a treasure and we need to preserve it,” Connick said. “They (CDI) are in the facility because of horse racing, and those slot machines are there to supplement racing. Part of that means using that to fix up the track. I know they have to answer to their investors, but we’re asking for a little piece of the pie to keep this treasure in good working order.”
Churchill Downs Inc., which declined direct interviews for this story but did respond to written questions, strongly objects to the notion of legislative interference.
“Legislation dictating how and where private business invests capital should be alarming to anyone that runs a business in Louisiana,” it said.
If Connick’s bills were to pass, they likely would be tied up in court for some time. Regardless, Connick says the state must do something.
“We’ll work with anybody, but if you don’t come to the table and you don’t acknowledge what the problem is, then that’s another problem that’s got to be addressed,” he said. “We’re going to use every ounce of power the state has to make them understand that they have to take care of the Fair Grounds. They can save it or sell it. Just don’t take our money and run.”
CDI says it values the track, for both its historic and financial importance, although it contends that the racing operation struggles to turn a profit. When asked if the company would consider selling the facility, officials did not respond.
“Just like Churchill Downs, the Fair Grounds has a rich history our company values very much,” the response said. “Churchill Downs knew that when it purchased the track out of bankruptcy in 2004. Churchill Downs is the same company that reinvested heavily in New Orleans after Hurricane Katrina by rebuilding and reopening the track and several OTBs (off-track betting parlors, of which there are 11 in the New Orleans area) along with building a new casino and new OTBs. And we continue to invest capital into the Fair Grounds facility.”
To some, though, that’s hard to see, especially where the turf course is concerned.
After severe problems with the turf last year, which were exacerbated by large crowds trampling the surface during Jazzfest, CDI brought in Mick Peterson of the University of Maine and executive secretary of the Racing Surfaces Testing Laboratory.
Although some $300,000 was invested in drainage, equipment and a new strain of Bermuda grass, a cold and wet winter resulted in a large number races being taken off the turf, although the figures have improved in March.
Still, the problems with the turf resulted in smaller fields, which in turn reduced the amount being bet. That’s because handicappers favor large fields that attract more exotic wagers, and turf races themselves are considered more predictable than their dirt counterparts.
“While some horsemen and the leadership of the LHBPA want to condemn the management of the turf course, many other horsemen and industry experts acknowledge the impact of the severe weather and the long-term approach to course management we have taken,” CDI said in its written response. “The integrity of the turf course will continue (to) benefit from the best management practices.
“They (the LHBPA) basically want us to start over. We don’t feel we need to do that.”
Longtime local trainer Dallas Stewart agreed with CDI on that count.
“The bottom line is that they tried to fix it, it didn’t work, and now they are trying again,” he said. ‘This is a trial-and-error process and meantime everybody bitches.
“The main (dirt) track surface has been perfect, and the goal is always to have a safe track. Anytime you cut purses, everyone is going to be unhappy. But race trackers always have to just roll with the punches.”
As for the amenities for the players, a major complaint has been the lack of a video screen on the infield scoreboard.
When a large number of investors in Starlight Racing, owner of Louisiana Derby favorite Intense Holiday, attended the Risen Star Stakes at the Fair Grounds last month, they were miffed to find that from the grandstand and rail area, the race won by their horse had to be followed with the naked eye.
“We couldn’t have been treated any better up in the suites,” said Jack Wolf, managing partner of Starlight Racing. “But when we came down to watch the race on the apron, we expected to be able to see the race on an infield screen.
“Somebody said it hasn’t worked for a couple of years. Some of us have an issue with that.”
CDI apparently has no plans to install a new screen, although a $12 million high-definition one described as the world’s largest has been installed at Churchill Downs. CDI did point out there are more than 700 screens, mostly small tableside ones, in the rest of the Fair Grounds.
Other complaints have been made about the dearth of tellers, both at the Fair Grounds and in the OTBs. CDI said it feels that between tellers and machines there is sufficient staffing.
Track regular Henry Price of New Orleans said the teller situation can be tricky.
“They’re not always there when you need them,” he said, “Sometimes there’s just one, and when a line forms, people get all stirred up having to wait.
“Then the mutuel machines are too complicated for most bettors. Sometimes it won’t take your money or put out a ticket, and you have to holler for a teller.”
Racing Commission executive secretary Charles Gardiner said he has heard from all sides on the issues and hopes to bring everyone to the table in the near future. After the Feb. 17 confrontation, he appointed subcommittees from the commission to make a report at the group’s April 22 meeting.
Among the items on the table would be reduction in the number of racing days, at both the Fair Grounds and the state’s other three racetracks. CDI has said it favors such action because it would lower expenses without cutting into slots revenue.
However, the LHBPA likely would be opposed because it would cut horsemen’s racing opportunities. Such a proposal would have to get though the Legislature, where the LHBPA has considerable influence.
“We are dealing with issues on a scale of which I’ve never seen before,” Gardiner said. “But our mission statement is to balance the interests of the horsemen, the racetracks and the fans — to serve as an arbiter if you will.
“We’re going to get behind closed doors and try to hammer things out. But finding the solutions that some people may think are pretty simple are very complex.”