HARNESS TRACKS OF AMERICA Executive Newsletter

HARNESS TRACKS OF AMERICA
Executive Newsletter
A daily fax and e-mail report on racing and gaming developments in North America and beyond
Stanley F. Bergstein, Editor
February 29, 2008
MONEY PROBLEMS IN QUEBEC
Failure of a government plan to revitalize Quebec’s
harness racing industry by reducing the
number of VLTs in bars has led Attractions Hippiques,
Paul J. Massicotte’s ambitious operation
including four tracks, to cancel two nights of
racing. The underperforming VLT operations,
called Ludoplexes and located next to the tracks,
have fallen well below anticipated projections
and could impact Massicotte’s plans to build a
new Hippodrome de Montreal north of the city.
In cancelling racing on Saturdays in Montreal
and Tuesdays in Trois-Rivieres, Massicotte said,
“This is a decision that I bitterly regret when I
think back to the hopes raised throughout the
Quebec horse racing industry when we signed the
agreement late in 2006 with the government of
Quebec. We were enthusiastic and excited about
this plan to relaunch the industry. In Quebec City
and Trois-Rivieres alone we invested $15 million
more than the initial $23 million committed under
the agreement with the Quebec government.
Moreover, we increased purse money by 40%, as
soon as possible, in order to support the thousands
of jobs that depend on this industry in the
province. We worked with equestrian associations
to bring together stakeholders across Quebec.
I do not exaggerate when I say that we gave
more than 110% in meeting our commitments.”
The Ludoplex plan gives 22% of VLT revenues
to the tracks, but they in turn must reinvest 60%
of that money through purses. Massicotte said,
“At this point, we are forced into making very
difficult decisions. I hope Loto-Quebec (which
runs the VLTs in the province) can soon agree
on a new recovery plan for the industry. That
would allow us to return to a full racing schedule
and, of course, move ahead with the construction
of a new complex north of Montreal. I hope
there is a political will to act -- the survival
of a whole industry depends on it.” Racing
on Sundays continues in Montreal.
CAL-EXPO APPROVED TO RACE
The California Horse Racing Board yesterday
unanimously approved transfer of the harness
racing license at Cal-Expo from retiring Sacramento
Harness Racing to the fair management,
which will operate harness racing at least until
the end of the year. The move, necessitated when
not-for-profit Sacramento Harness felt it no longer
could sustain rent payments to Cal-Expo,
will mark the first time Cal-Expo will operate
racing outside the State Fair meetings held there.
Cal-Expo’s CEO, Norb Bartosik, told the Sacramento
Bee that harness racing will continue
on Thursdays, Fridays and Saturdays through
Aug. 2, when a break for track renovation for
the State Fair meeting takes place, and will resume
in mid-September. Bartosik said, “We’re
picking up many of the same people who worked
with Sacramento Harness. It’s a very fine staff.
We’ll be ready to roll when our dates start.” Recently
elected Sacramento Harness president
Ivan Axelrod, who is chairman of the USTA and
a financial consultant, said the association’s financial
problems were “just too overbearing”
to continue as operator of the meeting. “More
than 20% of our income went to rent,” he told
the Bee, adding, “Nobody can pay that kind of
rent and be viable.”
A SIGNIFICANT DEVELOPMENT
The chairman of the House Democratic Policy
Committee, Congressman George Miller of
California, has become a co-sponsor of Barney
Frank’s Internet Gambling Regulation and Enforcement
Act, which would allow licensed operators
to provide Internet gambling services in
the United States. Miller, who also is chairman
of the House Education and Labor Committee, is
one of the most influential leaders of the Democratic
party and now becomes a major supporter
of federally regulated Internet gambling. The
Frank bills are HR 2046 and 2607.