Tuesday, September 22, 2009

Slots, Slots and More Slots

This article is in response to Bill Farish's commentary, regarding Video Lottery Terminals (VLTs) in Kentucky.

First, why is everyone in the industry afraid to call them slot machines? It's probably for the same reason that the industry won't admit that the only reason racing has a significant popularity as a sport is because people can gamble on the outcome of the races.

Personally, I have no problem with racetracks getting slot machine licenses. I'm all for businesses making more money and also increasing entertainment options.

I do have several problems with the idea of VLTs only being allowed at racetracks.

Mr. Farish writes, "...the Republican Party should be standing up for Kentucky businesses, Kentucky jobs, and a free market environment that would allow Kentuckians to fairly compete with their out-of-state competitors."

I agree, but the Republican Party should be standing up for "all" Kentucky businesses -- not just those businesses with which Bill Farish, racetracks and horsemen have an interest. Is there a good reason why Joe's Bar and Grill and other small businesses can't have slots? I would like to own slot machines. As a small businessman I have always felt discriminated against. Why should only the largest corporations and the wealthiest families be awarded slot licenses?

My second problem with slot licenses is the way revenue is shared. Besides the state, why should only racetracks and horsemen be the direct beneficiaries of slot revenue? Why aren't Horseplayers rewarded with lower takeout at those tracks that have slots? If racetracks and Horsemen get windfall revenues from slots, then Horseplayers should also benefit by reduced takeout.

Not once does Mr. Farish mention the Horseplayer. Where would the Kentucky Racing Industry be without Horseplayers supporting them for the past 100 years?

Many academic studies have shown that slots cannabilize horse race wagering handle. Who gets hurt by smaller handles? Not racetracks. They make it up in slot revenue. Not horsemen. They are subsidized by slot revenue. Horseplayers get hurt. When the pari-mutuel pools are smaller Horseplayers have fewer wagering opportunities.

The only way to pump up the handle on racing when racetracks become racinos is to lower the takeout on horse race wagering.

The racing industry is more than horsemen and racetracks, it is also Horseplayers.

Or maybe it isn't? Maybe racing is only horsemen and racetracks? Maybe Horseplayers are delusional if they think they figure into the equation? When have Horseplayers ever been treated with respect? It seems Horseplayers only matter when money can be extracted from them. And as soon as slots are legalized in Kentucky (which they will be), Horseplayers will matter even less.

But if I have any say over it, slots will be legal at more places than just racetracks and casinos.

This has been contributed by John Swetye, a long-time Connecticut horseplayer. For another view on KY Slots from a HANA member, try "If I was Kentucky Racing Czar", here.


Anonymous said...

Slot machines are illegal in New York. But change the name to VLT and voila - machines "styled" after slot machines.

Anonymous said...

Well said.

The_Knight_Sky said...

It's nice to find more and more people drumming up support for lowered takeouts when a racetrack gets slots on the premises.

But I caution this. The lowered takeouts cannot be in some pools but ALL the pools. Not aslight reduction but back to 8 to 10% the way it used to be in racing's heyday. And not part of the year but the complete calendar year.

Nothing less should suffice if parimutuel wagering is to become fashionable and self-dependent again.