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Casinos, lottery machines hurting Texas race tracks
Down the Stretch

Texas horse and dog racing hasn't come up lame, but it could fade down the stretch.

Live betting dropped from $117 million in 2004 to $89 million in 2005, and simulcast betting dropped from $447 million in 2004 to $426 million in 2005, according to the Texas Racing Commission (TRC).

The state had a banner year in 2004, when Lone Star Park in Grand Prairie hosted the Breeders' Cup races, which brought in $50 million to the state, according to TRC. Wagers fell in 2005, however.

Terminal trouble
Track officials blame racing's woes on Internet gambling and the prevalence of video lottery terminals (VLTs) in neighboring states. VLTs allow visitors to play video gambling games at licensed tracks. A portion of those wagers is added to each race's prize money, or "purse."

"We are seeing horses that have traditionally run in Texas move to Louisiana, New Mexico and Oklahoma," said Bryan Brown, CEO of Retama Park near San Antonio. "The more the VLTs contribute to the purses in those states, the more it makes sense to go there."

Illegal online betting also is a problem, Brown said.

"We have customers tell us all the time that they have been wagering online," he said. "We don't get any benefit from that. It's hard to quantify, but we know it's had a substantial impact on tracks in Texas."

Another problem is competition from casinos in states bordering Texas. Many offer traditional casino games and allow patrons to bet on horse races in Texas.

When out-of-state tracks add VLT and casino revenue to their purses, they run rings around Texas tracks, according to Tommy Azopardi, executive director of the Texas Horsemen's Partnership.

"It's hard to stay in Texas when purses are two to three times higher in other states," Azopardi said.

Louisiana has races that are open only to Louisiana-bred horses, he said.

That's forced a lot of Texas horse owners to move operations to other states.

"Talk to any Texas horseman," he said. "They are not big fans of VLTs. They love horse racing, but they recognize that to have racing you have to have competitive purses, and that is driven by VLTs."

High stakes
In 2004, Texas Comptroller Carole Keeton Strayhorn said VLTs could bring in more than $1 billion a year in state revenues and add more than 30,000 new jobs to the state.

Texas could generate about $3.7 billion in total annual expenditures by adding VLTs, according to a 2005 report by the Perryman Group, a Waco-based research firm. The report estimates adding VLTs would create 26,000 permanent jobs and add $1.2 billion per year in state revenues.

Still strong
Texas tracks do get buzzing for big events, such as the Kentucky Derby, but VLTs continue to take a bite out of Texas tracks' returns.

"The fact that other states have other forms of gaming at their tracks, the money that is being spent there is not being spent here," said Howard Phillips, CEO of Manor Downs, a track outside Austin. "With Louisiana in particular, we are being shot with our own bullets."

Greg Mt.Joy