As the Kentucky Thoroughbred Development Fund (KTDF) closes in on the three-month mark without being able to generate money via historical horse race (HHR) gaming and on-track wagering, Bill Landes III, the chairman of the fund’s advisory committee, warned in a public teleconference meeting Wednesday that the money that gets allocated to pay a portion of purses on the state’s racing circuit is running dangerously low.
Although no specific dollar amounts were mentioned about how dry the funding is because of the recent COVID-19 business closures, a real-life example of just how dire the situation is emerged when executives from Ellis Park were asked several times by KTDF advisory committee members to address allegations that the track might be planning on scrapping its summer race meet over a lack of money.
“Maybe it’s time for a state of the union address,” said Landes, who represents the Kentucky Thoroughbred Owners and Breeders Association (KTOB) on the advisory board. “And the state of the union for the KTDF is fragile. It’s fragile, and it’s obvious why it’s fragile, because our funding sources have been suspended.”
At a later point in the meeting, Landes underscored that “The bottom line and the fact of the matter is, if we don’t get [revenue sources] opened up, this is the last KTDF meeting we need to have.”
Yet there was enough KTDF money remaining for the advisory committee to unanimously recommend approval to the Kentucky Horse Racing Commission (KHRC) to allocate purse money to Keeneland Race Course, Ellis, and Kentucky Downs for their upcoming race meets.
And board members also agreed to draft a letter to the KHRC asking, as Landes put it, “to advocate for our case with Kentucky government” to get racetracks and HHR establishments reopened to the public as soon as possible.
The KTDF is funded by three-quarters of 1% of all money wagered on both live Thoroughbred races and HHR gaming, plus 2% of all money wagered on Thoroughbred races via inter-track wagering and whole-card simulcasting.
Rick Hiles, the president of the Kentucky Horsemen’s Benevolent and Protective Association, is also a KTDF advisory committee member. At the June 3 meeting, he wanted Ellis officials to go on the record as to whether or not they are committed to running a summer race meet under a schedule that has already been curtailed because some July and September dates have been ceded to Churchill Downs and Keeneland.
“On two occasions, if not three, [Ellis executives Jeff Inman and Ken Mimmack] have just flat told me that they have no intentions of running if they don’t have a revenue stream from instant racing machines and live fans,” Hiles said. “And I’m just wondering if that’s still the case.”
Inman, the Ellis general manager, was granted the floor to explain his track’s position.
“You know, it’s going to be tough. We’re working to get you a race meet. But again, if we don’t have any [revenues] at all, it’s going to be tough. With that being said, we’re very, very hopeful that come mid-June or so [the business climate is] going to break loose,” Inman said. “We are moving heaven and earth to have a race meet.”
Doug Hendrickson, who represents the KHRC on the KTDF advisory committee, stressed the need for all of the tracks to keep working together so the year-round state circuit doesn’t fall apart.
“Please hang in there Ellis. You’re very important to Kentucky racing. We’re behind you and want to support you,” Hendrickson said.
In other business, Tom Minneci, the senior director of finance at Churchill Downs, Inc., reported on purses for the meet’s second condition book, which goes into effect with the June 6 races.
“We looked at our condition book for the second half of the spring meet, and overall purses are going to be commensurate with the first condition book,” Minneci said. “We did, however, reduce the amount of KTDF [funding] and we increased the association purses … Unfortunately, as of this point in time, Derby City Gaming has not been reopened, and that was really our only source of KTDF funds that we were counting on for this spring meet.”
Bob Elliston, Keeneland’s vice president of racing and sales, got his track’s $426,000 KTDF request approved by the committee while noting that 25% of purses at Keeneland’s upcoming July 8-12 meet would be funded by KTDF money. He said that’s up from the usual 20% funding level.
Keeneland’s maiden special weight races will be carded for $70,000. “That is down from where we were planning to be at the April race meeting, but we were planning on generating a heck of a lot of revenue stream from our on-track handle and on-track business as well,” Elliston said. He added that the July condition book could be online within the next day or so.
In consideration for Ellis agreeing to give Keeneland those July race dates, the committee also approved Keeneland’s request to transfer $125,000 of its KTDF money into the Ellis horsemen’s purse account.
Ellis’s request for $1.15 million in KTDF funding includes the Keeneland transfer but does not yet factor in a potential settlement with Churchill in exchange for September dates. Dan Bork, the racing secretary at Ellis, said that figure is being negotiated.
Bork said maiden special weight purses at Ellis project to be in the $20,000 to $25,000 range, “so it’s not looking that great right now. Hopefully we’ll get something up and going soon to generate some more revenue.”
Kentucky Downs had a KTDF request approved by the committee for up to $4.7 million for its September turf meet.
Ted Nicholson, Kentucky Downs’s senior vice president and general manager, said maiden special weight races would go for $90,000. “That’s a 30% decrease from last year, and our allowance races will probably take a 30% haircut as well,” he added.
For part of the committee meeting, advisory board members batted around various ideas about how to phrase the advocacy request letter to the KHRC that Landes proposed. The opening-up strategy touched on three issues: Allowing owners to watch their horses race, opening tracks to some spectators, and opening the HHR facilities.
Hiles said he met with Jonathan Rabinowitz, the newly appointed KHRC chairman, and “he iterated to me last week that he wanted to start having owners with horses in races back at the races on Friday and Saturday at the latest. But that did not happen.”
Hiles explained that he’s okay with that decision for the time being because, “It’s really not much fun to be on the [Churchill] front side right now. There’s nobody there and it’s vacant. Everything’s closed up. There’s no concessions. It’s hard to find a bathroom. If the owners were allowed to come watch their horses, I’m sure they wouldn’t hang around, because they would watch their horse and leave. With that being said, they don’t have any betting windows open. So if they can’t make any bets, there’s still not going to be any KTDF money generated.”
J. David Richardson, who represents the KTOB on the KTDF advisory committee, said it is his belief that spectators could safely return to the races under proper protocols, but he pointed out that getting HHR venues open first should be the higher priority.
Richardson made reference to the anti-police brutality protests in Louisville and other cities nationwide over the past week, seemingly trying to make the point that social distancing precautions are already being ignored by people gathering in public places.
“As we’ve seen, there’s an awful lot of failure of social distancing in a lot of places in Kentucky in the last few nights,” Richardson said. “And compared to that, lord god, this [creating protocols to host bettors] ought to be the safest thing in the world.”
Richardson continued: “But then you get into issues like cleaning the machines or having mutuel clerks and face-to-face contact in the lines and that kind of thing. To me, what we really need to get online is HHR, frankly. That’s where we’re going to get more bang for the buck.”
Richardson noted that he owns horses currently stabled in Louisiana, where gaming facilities are getting set to reopen, and another committee member pointed out that gaming in Arkansas is also being rolled out ahead of Kentucky.
“If we want to call ourselves the horse capital of the world, we can’t be last to do everything,” Richardson said.
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