Sunday, June 14, 2009

Dear Governor & Racing

To: Gov Steve Beshear
700 Capitol Avenue, Suite 100
Frankfort, KY 40601
Tel: 502.564.2611
Fax: 502.564.2517

Cc: Sen. President David Williams
702 Capitol Avenue, Annex Room 236
Frankfort, KY 40601
Tel: 502.564.3120
Fax: 502.564.0456

Cc: House Speaker Greg Stumbo
702 Capitol Avenue, Annex Room 303
Frankfort, KY 40601
Tel: 502.564.2363
Fax: 502.564.7178

Dear Sirs,

The Horseplayer Association of North America is a grassroots organization which was incorporated in September of 2008. In a short nine months, the group has grown to 1200 members representing tens of millions of dollars of annual wagering handle. We would like to make our thoughts known regarding the status of Kentucky racing, and what we think you can do to help.

I am sure you have heard from many of racings insiders – trainers, owners, track executives, feed men, vets and more. We are different. With us you are hearing from racings customer: The people who fill the stands, watch racing, live racing, and breathe racing. We represent racings demand side revenues.

As you well know, a trip to Keeneland in the fall or spring, to Louisville in May, or a night out at Turfway on a cold January evening is what your state is about. It can be argued that Kentucky racing is not just a sport, or a game to gamble on. It is a slice of Americana, and we want to see that continue. Not for a year, or ten years with band-aid solutions, but for generations.

With the state of horse racing in 2009, the business feels there are only a couple of ways a jurisdiction can add additional revenues: By alternative gaming, or increasing taxes. Kentucky takeout rates are some of the finest in the nation. Raising them, or taxing horseplayers will not result in an increase in business. This has been proven time and time again in all types of gambling games. The jurisdictions with the lowest takeouts have done well, while those who continually nickel and dime the horseplayer, have not. In the UK when taxes were taken off sports betting, sports betting grew. In Australia where a 6% takeout pick 6 was instituted, racing grew. In Singapore when lower takeouts were experimented with, racing grew. In Hong Kong, who lowered rates recently, it plugged the losses. The Horseplayer Association of North America believes raising rates in your state will simply be another nail in the coffin.

Because it is not politically reasonable to restructure betting in those ways in your state at this time, that leaves us with alternative gaming. It is no secret what slots have done to your horse population and handle, with adjacent states offering slots fuelled purses.

This will this narrow the gap between yourselves and adjacent states, and if done correctly, a slots program built for the 21st century can allow Kentucky to stand up and be beacon to other racing jurisdictions. With past slot deals there has been a tremendous amount of money placed into the supply side of the equation – racedates, purse increases and so on. However, little has been placed on the demand side – cultivating the racing customer, through takeout breaks, player rewards, and increased demand side infrastructure. This has not made racing economically viable as a long term betting proposition and slots have been simply a band-aid. With a properly written slots deal between the state, the tracks, the horseman and the customer, we think Kentucky can be a world leader in racing once again. You are in a unique position where you can use empirical evidence from other jurisdictions to write a far better long-term deal, which can be a benefit to all, and grow the sport of racing.

As you have heard from many in racing based solely on supply, we will end this by speaking of what it means to be a customer of racing in your state. Making a trip to Keeneland for horseplayers is pure magic. One is treated with respect and knows that it will not be their last visit. The same goes for a trip to the Red Mile in the fall for fans of that sport, or Derby fans in the spring at Churchill. It can be argued that meets such as those, do more for the goodwill and word-of-mouth marketing for your state than any television commercial, or any ad campaign could ever hope to. Kentucky is racing, and racing is Kentucky. As horseplayers we want to keep it that way. We urge you to implement alternative gaming the right way. If you make it so, you can ensure that the words “Kentucky” and “racing” are inexorably linked forever.

Horseplayers Association of North America

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