The Vegas Guy: what is a Racino?

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TUCSON, Jan. 7 (UPI) -- What the hell is a racino?

Depending on whom you talk to, it's either a racetrack with slot machines on the premises, an entertainment complex featuring casino gambling and horse racing, or a mutant scheme by horse racing men to put one over on the government.


At any rate, there are already 16 of them in the country, and there promise to be at least that many more by the end of 2003. New York has already approved slot machines -technically "video lottery terminals" -- for several of its horse racing tracks, with Maryland and Pennsylvania expected to follow and a half dozen other states considering it.

What does it all mean?

It means that, once again, almost every state in the union has a budget deficit. The last time this happened, from 1990 to 1992, we ended up with riverboat casinos in six Midwestern states. This time no one is talking about riverboats or new Atlantic City type arrangements. Instead, the answer seems to be slot machines at racetracks. It's almost as though the normal means of raising money -- corporate taxes, income taxes, excise taxes, sales taxes -- have been abandoned altogether in favor of the new theory of government finance: Why not just expand gambling?


Most of the nation's track owners gathered here recently for the Racing & Gaming Summit to discuss the future of slots at tracks, and suffice it to say they were in 100 percent agreement on one fact: if they DON'T get the slots, most of them will go out of business.

Horse and dog racing have been in a slow decline for almost 20 years now, but the last five have been brutal. They've managed to stay afloat by various off-track betting schemes, so that horse players can now go to almost any track on almost any day of the year -- regardless of whether there's live racing going on -- and bet on horses in faraway locales.

But the only tracks that have really thrived are the ones that have slot machines. In many cases their live handle (the daily amount bet at the track by live customers) has continued to decline, but their revenues have shot up so fast that they're able to offer the biggest purses and thereby attract the best horses. Tracks like Delaware Park and West Virginia's Mountaineer Park, once considered places where local degenerates bet on broken-down nags in claiming races, are now among the wealthiest tracks around, with the best races. Fabled tracks like Churchill Downs and Pimlico, on the other hand, sometimes have trouble making ends meet.


Why should any state government, though, allow slot machines at a racetrack?

There are several reasons. One is that it's a place where gambling already exists, so legislators don't fear they'll be accused of "expanding gambling" (even though that's exactly what they're doing).

Second is the feeling, especially in Kentucky and Maryland, that they're protecting a sacred industry. Kentucky considers itself the capital of thoroughbred racing, with most of the breeding done there and the sport's most famous race, the Kentucky Derby. Maryland has long been famous for its racing stock, and horse-raising is considered a prime agricultural business.

Third is the belief that horseracing tracks are simply more civilized and controllable than Las Vegas-style casinos. (Of course, the introduction of slot machines completely changes the clientele, but no one talks about that.)

And finally there's some feeling that the racetrack owners and the horsemen have been playing on an uneven field. If an Indian casino goes up within 200 miles of a racetrack, the track feels the impact immediately. And most Indian casinos pay no tax to the state, whereas the horse and dog tracks pay anywhere from 18 to 30 percent. By giving them the slot machines, they're evening out the competitive odds.


I'm going to be writing about this trend in coming weeks, but after listening to a dozen or so speakers at the racino summit, I'm unconvinced that it's a good thing for racing OR gambling in general.

For one thing, have there ever been two more DIFFERENT types of gamblers? The slot-machine player believes in pure chance. It's the most mindless kind of gambling in the world. He's essentially playing the lottery every five seconds, or as fast as he can push the button or pull the handle.

The horse player, on the other hand, is perhaps the most intellectual of all gamblers. He spends hours doing homework on the horses, studying the Daily Racing Form, taking into consideration all the myriad factors that can affect a race, so that he can place an intelligent bet. The idea that a slots players would ever bet on a horse, or a horse player ever put money in a slot machine, is absurd. Two different thrills, two different personality types.

Bill Eadington, a Professor of Economics at the University of Nevada/Reno, put it best in one of the most clear-sighted observations of the summit.

"If you have slot machines," he said, "you don't really have a race track anymore. You have slot machines that happen to be located in a place where horses run in circles."


(E-mail Joe Bob Briggs, "The Vegas Guy," at [email protected] or visit Joe Bob's Web site at Snail-mail: P.O. Box 2002, Dallas, Texas, 75221.)

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