Lexington, KY - Kentucky is the "Horse Capital of the World." Horses touch the lives of Kentuckians statewide, from county fairs to the Kentucky Derby. Just consider these facts. There are more than 320,000 horses in Kentucky - with an average of 34 per farm - and some 194,000 Kentuckians involved as horse owners, employees and volunteers. The horse industry generates 100,000 jobs throughout the state and has a total economic impact of $4 billion dispersed across all breeds. Hundreds of thousands of visitors travel to Kentucky each year to attend the races, visit horse farms, participate in horse sales and enjoy the Kentucky Horse Park. In short, horses permeate the culture and economy of Kentucky.
Our horse industry, however, faces a historic threat as other states rush to capture what we have. Of the 12 states nearest to Kentucky that engage in racing, 11 are now supplementing their racing and breeding programs through expanded gaming. They are doing so to generate new state revenue, preserve and create employment, and grow an attractive "green" industry.
States that have already adopted alternative gaming at racetracks are vying for a greater share of Kentucky's equine business. Pennsylvania, Louisiana, Indiana and West Virginia are now attracting Kentucky-based horsemen. Additionally, new gaming initiatives created to significantly promote the horse industries in New York, Maryland, Florida and Illinois will further and substantially alter Kentucky racing.
It would be a mistake to characterize this competition as a future threat to Kentucky. The impact is significant, and it is now.
Kentucky racetracks are losing the fight for horses, resulting in a reduction of race days at Churchill Downs, Ellis Park, Turfway Park and Kentucky Downs. Keeneland was forced to lower stakes purses during its recent spring meeting. Because they are losing money at the racetrack, directors of The Red Mile have been forced to make deep cuts. The next one may be eliminating Quarterhorse racing in 2010.
Some stark examples illustrate what Kentucky is up against.
In Pennsylvania, combined Thoroughbred and Standardbred purses in that state increased nearly 40 percent from 2007 to 2008. Total purses in Kentucky have remained stagnant since 2001.
Pennsylvania's Presque Isle Downs and Casino opened its 2009 race meet on May 8 - its first year in direct competition with live racing at Churchill Downs. As a sign of the times, only one horse in its opening night stakes race was from Pennsylvania. The rest were from Kentucky. Purses at Presque Isle are projected to continue to climb from $30 million in 2008 to $35 million in 2013.
Kentucky's neighbor to the north, Indiana, has two tracks with gaming that are in direct competition with Ellis Park - and their purse projections are staggering. Purses at Hoosier Park are expected to rise from $11 million in 2008 to $28 million in 2013, and purses at Indiana Downs are projected to more than triple - from $8 million to $25 million - in the next five years. In contrast, purses at Ellis Park are projected to decline from $5.3 million in 2008 to $2.2 million in 2013. As a result, officials at Ellis have reduced the 2009 race meet from 48 to 23 days, and said that if some sort of relief doesn't come soon, this summer could mark the last meet at the historic Henderson track.
The competitive landscape has changed dramatically, and that's why we're calling on state officials to help us fight back by allowing video lottery terminals at racetracks. To fail to act now is to accept a future for Kentucky without the economic, recreational, cultural and historical importance of our equine legacy.
Why should Kentucky pursue expanded gaming?
First, it would provide a source of new revenue to state government. Independent economic analysts have projected that House Speaker Greg Stumbo's proposal to allow video lottery terminals at existing racetracks, introduced last session, would generate more than $200 million per year in direct new state revenue from the tax. This estimate does not include the economic benefit from the jobs created by the operation of the facilities.
Secondly, funds would be generated and set aside to spark economic development in Kentucky's horse industry. This aspect of the program is in every sense of the word a "Kentucky Jobs Bill." Kentucky's horse industry provides a great diversity of employment - touching both rural and urban areas, as well as providing jobs at all skill levels with positions ranging from entry level to professional. The impact of these jobs on the commonwealth runs wide and deep.
We are not asking for a bailout. On the contrary, this proposal requires neither government funding nor investment. Rather, we are asking for the opportunity to invest an estimated $1 billion of our own funds, hire and train new employees and take the operating risks of competing against the casinos in our neighboring states.
We are not talking about a geographic expansion of gaming. The venues stay the same; the menu is simply expanded. All we are asking for is the ability to compete with other racing venues so that we might protect and preserve this signature Kentucky industry.
This op-ed was submitted by Bob Evans, president and CEO, Churchill Downs Incorporated; Ron Geary, owner/ president, Ellis Park; Nick Nicholson, president and CEO, Keeneland Association; Corey Johnsen, president, Kentucky Downs;
Joe Costa, president and CEO, The Red Mile; and Bob Elliston, president and CEO, Turfway Park.