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Louisiana Looks to Off-Track Betting to Save Horse Racing

December 17, 1988

COVINGTON, La. (AP) _ The television screens blink with the latest odds and the post parade as fans eat, drink and argue figures in the Daily Racing Form and mutuel clerks listen to bettors call out their exacta combinations.

The only item missing from this typical day with the ponies is the track - in this case, the Fair Grounds Race Course about 35 miles to the south in New Orleans.

The crowd of about 200 is taking advantage of the first year of off-track horse race betting in Louisiana, boosted by some racing officials as a boom to a state industry long in the doldrums because of a poor economy and facing stiff competition in the near future from Texas.

″I think that when it is over and done with, it will be the salvation of the racing and breeding industry,″ said Charles Ashy, general manager of Evangeline Downs, one of the state’s five race tracks. ″It is doing what everybody hoped it would do - generate more purse money and help the racing and breeding industry.″

Five OTB parlors are now operating in the state. The initial venture opened in Thibodaux on Feb. 19 and was followed by parlors in Covington, Slidell, Napoleonville and Gretna - all in south Louisiana where four of the tracks call home.

The parlors, which feature bars, a restaurant and big-screen television where bettors watch the races, are more than a step up in class from the backroom bookmaking joints where illegal wagers have been taken for decades.

Under a law passed in 1987, voters in each parish, the equivalent of a county, decide whether to allow OTB. Each track operates the parlors within 55 miles of their location. If other parlors open beyond the track boundaries, each of the five can share in the operation.

Two percent of the handle from OTB, plus sales taxes on concessions, go to the parish in which the parlor is located. OTB facilities also are required to employ local residents, another economic boost in a state that has the nation’s highest unemployment rate.

Jack Lohman, a consultant for the Kenner-based Jefferson Downs that operates four parlors, said reality has exceeded expectations during the first year of operation.

In St. Tammany Parish, officials originally thought OTB would generate about $300,000 a year for the local government. So far, $500,000 to $600,000 is being generated on an annual basis, Lohman said.

″The only one that hasn’t met our expectations is the one in Napoleonville,′ ′ he said. ″We think that’s because of the poor economy in the area.″

Extra money from OTB generated purse increases of about 17 percent at Louisiana Downs in Bossier City during the past season, Lohman said. The minimum purse at Jefferson Downs rose from $2,500 to $3,000 and $8,000 per day is being added to Fair Grounds purses as the result of OTB, he said.

″In view of the overall slump in the Louisiana economy, we have to be just happy to hold our ground,″ Lohman said.

Ashy said OTB even allowed Evangeline Downs to raise its purses slightly, despite the local downtrodden economy.

The track, located near Lafayette in the heart of Louisiana’s oil country, saw its fortunes slide with the downturn in the petroleum industry.

Evangeline Downs averaged a daily handle of $506,000 in 1982 - just before the bottom fell out of oil prices. In 1987, the handle fell to $307,000, and in the process, the track went into receivership. This year, partially due to OTB, the handle rose slightly to $322,000.

″We had a little bit more to put into the purses because of off-track,″ Ashy said.

Lohman said the OTB crowd is a combination of veteran horse players and newly introduced bettors.

″The current customer who might have gone to the Fair Grounds once a month now goes once a week. And he brings people who otherwise wouldn’t go,″ Lohman said. ″We don’t just want them to be parlor fans. We want them to come to the race track. But this gives them a chance to be introduced.″

Introducing fans to Louisiana tracks is important with the pending start of horse racing in Texas, Lohman said.

″One of our ideas to offset competition from Texas was that we had to expand our markets,″ he said. ″There’s no question that racing in Texas is going to hurt racing in Louisiana.″

But Tom Sweeney, general manager of Louisiana Downs, warned that OTB could be a ″two-sided coin.″ For example, if track attendance falls sharply due to OTB parlors, operators could be forced to lay off workers, he said.

More importantly, the track is the center of the breeding and racing industry, Sweeney said.

″I’m not sure if when this bill passed, they (legislators) knew how many problems they could have on down the line,″ he said. ″If you’re going to start phasing out tracks, then you’re going to have problems (in the breeding industry). Not everybody can have an Alysheba or a Seeking the Gold. You have to have the minor leagues.″

Lee Berwick, general manager at Delta Downs in Vinton, said the industry needed to avoid locating OTB parlors too close to tracks.

″We need to get away from here and get into the central, northern and eastern portions of the state where there are no tracks,″ he said. ″That will open up new markets.

Berwick’s track, located right across the state line from Texas, may have the most to lose from Texas betting - and the most to gain from OTB.

″I think Texas is going to offer us a lot of competition for our racing fans and our racing dollars,″ he said. ″Anything we do to expand our markets in the opposite direction will benefit us.″

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