Decoupling: Harness racing’s newest scary word

February 26, 2016

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by Dave Little

When Bill Finley wrote his piece in last Friday’s HRU on the possible end of racing at Florida’s Pompano Park, a new term that no track operator, horseperson or breeder wants to speak, hear or read was added to harness racing’s lexicon: Decoupling.

Basically, decoupling is legislation that ends the marriage between racing and slots, leaving racing to fend for itself. Since many venues that have both racing and slots are owned by entities that couldn’t care less about racing, decoupling is one scary word.

“It’s a very palpable fear,” said Tom Grossman, owner of Blue Chip Farms, a major breeding player in New York. “The cycle really is that way back when we first got VLT (video lottery terminal) legislation passed, the politicians became well versed in what the economic and environmental benefits are of having a vibrant breeding business in the state — the sale of hay and grain, blacksmiths, and all that. We have impact studies in New York and Pennsylvania that have very impressive numbers that indicate what it adds to the economy.”

But politics plays a vital role in the entire process. And it’s that process that Grossman finds frustrating.

“Then, everyone gives themselves a pat on the back, myself included, and we go about our business,” he said. “We invest in a stallion, in which you are hoping for a seven or eight-year pay back when you spend six or seven million dollars, and you fall asleep at the wheel a little bit. And guess what? You then have new politicians who did not go through that process who certainly don’t fully appreciate at all those arguments we just went through and they just turn around and say, ‘Why are horse people getting all this money instead of school teachers?’ and whatever else. It’s a very, very dangerous situation. I’ve spent millions of dollars on political lobbyists and what I did not realize at the time — and I do realize now – is that it’s not a one-time effort, it’s a continuing effort to keep politicians educated. It’s a scary situation.”

Alan Schwartz is the president of the Monticello Harness Horsemen’s Association. Remarkably, his group has contracts that guarantee racing at the Mighty M for the next nine years. And he’s still concerned about decoupling. Clearly, if decoupling has decimated the sport nearing the end of the contract, how many horses and horsemen would be left by then?

“Absolutely, it concerns me,” said Schwartz. “It would be a tragic mistake if the state were to adopt it. What I fear now is that with full gaming casinos coming, (to get them) the law is written as such that these casinos must maintain racing. But I fear that down the road that racing would be in jeopardy. Ours is a dying sport. I think when these casinos get operational and the money starts flowing from the casinos to the politicians, anything can happen, and that’s my biggest fear.

“We had some politicians that we thought were absolutely in favor of the horsemen. When this last situation came up at Monticello, with the contract dispute, some of the politicians turned their backs on us. It was extremely disappointing. I fear that it’s going to be the same thing in the future.”

At least the Monticello horsemen can take solace in their current contract situation. They have an interim contract at Monti that lasts until the completion of a full-fledged casino at the Catskill region’s Concord Hotel (about two years). Once the Concord – which is being built by Monticello owner Empire Resorts in partnership with Entertainment Properties – is complete, a seven-year horsemen’s deal kicks in.
Even with that in place, Schwartz knows where racing stands in the eyes of ownership. “The people that bought Monticello Raceway did not buy it for racing. We are nothing but a burden to them.”

Meadowlands chairman Jeff Gural doesn’t have to worry about decoupling at the Big M. The matter of alternate gaming at the New Jersey mile has been moving like an earthworm through molasses for several years. But he still has his New York properties, Tioga Downs and Vernon Downs, to be concerned with.

“It’s hard to say (if decoupling will come to New York),” said Gural. “I really think that the horsemen in New York have good political contacts and I think it would be difficult for that to happen. But eventually, I guess it will. At some point, I think the handle and the number of people betting on the product get so low, it would be difficult to justify continuing to subsidize it.”

Would Gural cease racing operations at his New York properties were decoupling to come to the Empire State?

“I probably wouldn’t stop racing because I’m a horse racing guy,” said Gural. “But if something were to happen to me, my children would probably discontinue it. They have no interest in racing at all. Why would they want to take $2.3 million (what Vernon and Tioga lost last year) out of their pocket to have racing?”

“The argument hasn’t changed at all,” said Grossman. “The economic and environmental impact of breeding farms in New York State is as high, or higher, as it’s ever been. It’s not hypothetical, but factual. But it’s not readily apparent to anyone who just walks in and looks at where all of the money is going.

“I think we have a two or three-year window moving forward where the slot revenue is guaranteed. To invest multi-millions in stallions, like we’ve done, you need five or six years of visibility, and we don’t have that.”

So what does Grossman see in the future for Blue Chip if decoupling made it into law?

“I’d build a housing development.”

Five scary words, to be sure.

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