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 March 15, 2002
INDY POLITICS KILL SLOTS BUT KY SLOTS STILL ALIVE
Hoosier Park, caught in the middle of a bitter political
party fight between the Indiana legislature chief sponsor of a slots-for-tracks bill there, Demo-
Kentucky faces budgetary problems too, and the
and the state’s governor, lost its pull-tab slots this cratic representative and majority caucus leader
morning, when the legislature virtually abdicated Jim Callahan, says he has seen increasing support
this week in both House and Senate for his
its responsibilities and adjourned without doing
anything to close the state’s expected $1.3 billion legislation. The House Majority Floor Leader and
shortfall. A furious governor Frank O’Bannon was, a colleague proposed a bill this week that would
according to the Indianapolis Star, “left pounding finance prescription drugs for senior citizens with
his fist in frustration on a table in his statehouse slot revenues, and Callahan said that as far as
office” as he faced the only options left: deeper specific projects that could benefit from slots revenue
are concerned, “Anything is on the table --
budget cuts, including to education, and bringing
the legislature back for a special session. “The anything legal.” The bill, which passed the House
people of Indiana at some point are going to demand
there will be a special session,” the gover-
majority this week, is scheduled to return to the
Licensing and Occupations Committee by a large
nor said. “At the time when we needed vision, committee for technical amendments and could
some closed their eyes. At a time when we needed reach the full House for a vote by midweek next
leadership, some turned their backs. At a time week, or sooner. In its present form, the bill would
when we needed courage, some chose to do nothing.”
of profits, with purses getting from 10 to 12.7%
give tracks somewhere between 43.28% and 62%
and the state getting the balance.
The Star said legislative leaders warned that no
legislation expanding gambling would get a final
vote unless proposed tax and budget bills passed
first. When the legislature turned its back on
those, House bill 1332, which contained the provisions
for pull-tabs, went down with the tax and budget
legislation. There was the usual name calling
from both sides of the political aisle, with Republicans
blaming Democrats, Democrats blaming
Republicans, some blaming the governor, and one
Republican legislator, Michael Murphy of Indianapolis,
blaming the public “because there was
no groundswell from the average taxpayer for tax
increases, and we report to them.” Regardless
who is to blame, there will be no pull-tabs at the
moment for Hoosier Park or the embryonic Indianapolis
Downs when it arrives on the scene next
fall. One Democratic senator, Vi Simpson
of Bloomington, called last night’s events
“a shame...a lost opportunity, and for
what? Political posturing.”
BREAK FOR YEARLING BUYERS
When the president signed the Economic Stimulus
package last week, it included substantial breaks
for buyers of yearlings. Affecting such purchases
from Sept. 11 onward for three years, the bill provides
new depreciation rules that allow a 30% bonus
in the year of purchase, and possibly -- subject
to clarification -- the current expensing deduction,
which allows up to $24,000 of first year
writeoff. According to the American Horse Council,
a cumulative depreciation deduction of 47.5%
will be available in the first year, an additional
26.25 in year two, another 17.5% in year three,
and the remaining 8.75% in year four, bringing
total depreciation to 100% in four years. The new
rules allow 37.5% of the cost of a yearling purchased
after Sept. 11 of 2001 to be written off in
2001, more than three times the amount allowed
under the old rules.