2002 - Harness Tracks of America, Inc.

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
NEW ERA AT NORTHLANDS
HTA’s member Northlands Park in Edmonton,
Alberta, opens its 2002 season today with two problems
all tracks wish they could face: the highest
purse structure in its history, and a stable area
overflowing with horses. Thanks in large part to
increased revenue from the track’s 262 slot machines,
Northlands expects its average daily purse
distribution to be $112,000, up 18% over last
spring’s average of $95,000. With the high purse
schedule and plenty of horses to compete for the
money, horsemen know they are only going to get
to race their horses every other week, rather than
weekly, because of the supply. Northlands will
race only two programs a week -- Friday and Saturday
-- until the end of this month, when Wednesdays
will be added to the schedule. Weeknight
post time will be 6 p.m., Saturday afternoon cards
will start at 1 p.m.
A BONUS IN KENTUCKY?
It’s too early to tell if Kentucky will get VLTs, but
if the legislation put forth by the state’s tracks
passes, there will be a bonus above and beyond
the machines. The bill also provides for repeal of
the license and admission taxes on Kentucky
tracks, which last year amounted to more than
$600,000. The chief sponsor of the bill in the
House, Jim Callahan, says the loss of tax revenue
would be minimal compared to the revenues that
VLTs would produce. If the tracks’ projections
are right, Callahan’s comments are understated.
The tracks think the state could get $40 million in
the first year, $142 million in the second, and more
than $300 million a year after that. Callahan told
the Associated Press that “It’s the only type of
revenue you can look at and say each year it’s
going to get better. And it doesn’t cost the
taxpayer a penny.” The license tax, which
the tracks propose repealing, currently
costs Churchill Downs $1,500 a day, and
smaller tracks $500 or so a day.
March 8, 2002
DOVER SPINOFF MARCH 18
Dover Downs Entertainment’s board of directors
has approved the spinoff of its gaming interests,
and that division of the company’s business will
take place a week from Monday, on March 18.
The gaming business, including HTA’s member
Dover Downs, will be transferred to Dover Downs
Gaming & Entertainment, a newly formed Delaware
corporation, with 100% of the shares of that
company’s common stock and Class A common
stock being distributed, on a pro rata basis, to
Dover Downs Entertainment’s stockholders. Dover
Downs Entertainment will change its name to
Dover Motorsports, Inc. and will continue trading
on the New York Stock Exchange under its existing
symbol of DVD. The new gaming group has
been authorized to list its shares of common stock
on the New York Stock Exchange under the symbol
DDE and will be publicly traded for the first
time on or about the effective distribution date of
March 31. No Dover Downs Entertainment stockholder
will be required to pay cash or other consideration
for any shares of Gaming & Entertainment
stock received in the spinoff, or to surrender
or exchange shares of DDE in order to receive
Gaming and Entertainment stock. IRS has issued
a ruling that the stock distribution will be tax free,
except for cash received in lieu of fractional
shares, which will not be issued as such. Dover
Downs Gaming and Entertainment will consist of
Dover Down Slots, the newly built Dover Downs
Hotel and Conference Center, and Dover Downs
Raceway.
AN IOWA SLUGFEST AHEAD?
Without fanfare, a bill to eliminate the Racing Association
of Central Iowa, which holds the license
and operates Prairie Meadows Racetrack and
Casino, and replace it with local officials, has won
committee approval in the Iowa House. The
bill also calls for two votes in November,
one on continuing horse racing and the other
on continuing the casino.