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Gaming Commission Debates Benefit of Suffolk Downs Racing

November 14, 2018

By Colin A. Young

State House News Service

BOSTON -- Horse racing overseers approved Suffolk Downs to run four days of live Thoroughbred horse races next year, but regulators said the trade-off of supplying purse money for the track in exchange for wider economic benefits is starting to lose its luster.

The Massachusetts Gaming Commission on Thursday approved Sterling Suffolk Racecourse to run live racing at Suffolk Downs on May 18 and 19 and June 15 and 16, but only after a debate over whether supporting four days of racing at a track that is expected to close midseason is the best use of the commission’s purse money fund.

While standardbred racing has seen a resurgence tied to the slots parlor in Plainville -- the Gaming Commission last week approved 108 harness racing days between next April 8 and Nov. 29 at Plainridge Park -- Thoroughbred racing is near its all-time low in Massachusetts. The Gaming Commission and a splintered set of groups representing horsemen have been trying to find ways that the sport of kings can compete in modern times.

“I think there’s better uses for the money that will go towards merely four days of racing. I don’t think that brings the economic impact that the legislation envisioned,” Commissioner Enrique Zuniga, formerly the executive director of the $5.2 billion Massachusetts Water Pollution Abatement Trust, said.

Purse money for races comes from the Gaming Commission’s Race Horse Development Fund, which is funded by casino gambling revenues. The commission has typically approved about $1.1 million for purses for each weekend of racing at Suffolk Downs, though in some years the track has returned unawarded purse money to the commission.

Among the criteria the Gaming Commission is to consider before approving any request to host races is “the maximization of state revenues,” and Zuniga argued Thursday that a half-season race meet at a track where the facilities will be surrounded by construction will not generate an economic impact worth the potential state outlay. The commission was not asked to approve purse money last week and typically votes to grant purse money closer to the scheduled race days.

“The traditional bargain in the horse racing industry was that the track gets to simulcast, which is the profitable piece of the operation, but in return they have to conduct a number of races because that’s what really brings economic development,” Zuniga said. “This has been really, in my view, not worth it. They continue to simulcast year round, and that’s fine for them. But the economic impact is marginal at best. And this year is even more so.”

Zuniga suggested that the purse money the commission expects to be asked to provide for the four days of racing at Suffolk Downs would be put to better use funding a study that seeks to identify ways the horse racing community can regain its relevance and bolster ancillary local industries, like groomers, trainers and hay farmers.

Commission Chairwoman Gayle Cameron agreed that four days of racing next year at construction-surrounded Suffolk Downs is “not an ideal operation” and said that she has been hoping some other group would come forward with a plan to revitalize Thoroughbred racing in Massachusetts.

“The reason we have agreed to this less-than-ideal plan every year is really for the benefit of those in the racing community, and there are a number of folks in the racing community that are trying to hang on breeding and the folks that work at the track, the folks that train and the grooms and the jockeys,” Cameron said. She added, “I still think that this is, although not ideal, better than not having any racing.”

Commissioner Eileen O’Brien expressed similar sentiments but argued that rejecting the Suffolk Downs application would take away whatever leverage those in the racing industry might have as they attempt to chart a new course for the sport in Massachusetts.

“While I hear everything that you’re saying and I think it is time to look at it, I do think it’s draconian to say no to the application at this vote,” she said to Zuniga.

The commission ultimately approved the Suffolk Downs application on a 3-1 vote with Zuniga casting the sole dissenting vote.

As part of the approval, the commission imposed a series of conditions on the license, including that an independent expert review the track surface prior to racing and that the track share any construction, development or demolition plans with the commission. Suffolk Downs is leasing its East Boston facilities, where it also runs its simulcasting operation, after selling its property in 2017 to The HYM Investment Group.

In recent years, various groups have sought to revitalize horse racing in Massachusetts. The nation’s largest horse track operator, Stronach Group, last year publicly expressed interest in a potential partnership or lease to bring Thoroughbred racing to a former dog racing track in Raynham. Stronach has also considered building a new Thoroughbred horse track on Route 70 in Lancaster.

Sterling Suffolk Racecourse, the Suffolk Downs parent company, announced in May that it had reached an agreement for a long-term lease of the racetrack property at the Great Barrington Fairgrounds. Though the company was hopeful that Great Barrington could host six or eight racing days in 2019, the company’s lawyer, Bruce Barnett, said at Thursday’s Gaming Commission meeting, “I don’t think there’s a plan for that for 2019.”

The Thoroughbred horse racing industry has been on the decline in Massachusetts since at least 2001 when there were 1,526 races over 179 racing days in the state.

In 2015, Massachusetts hosted 36 races across three racing days -- down from 560 races across 65 racing days in 2014, according to The Jockey Club, which works to promote Thoroughbred horse racing in the United States. In 2016, Massachusetts hosted 63 races on six racing days. Suffolk Downs hosted eight racing days in each 2017 and 2018, the most since the track ceased regular racing in 2014.

One issue that could prevent Suffolk Downs from running races in Great Barrington is the fact that its license is to run live racing and simulcasting in Suffolk County, not Berkshire Country.

That situation, and gaming commissioners say many more, could be remedied if the Legislature were to pass a long-stalled bill revamping the racing and simulcasting process to grant the Gaming Commission greater power to make decisions about simulcasting and live racing.

For several years, the Gaming Commission has been asking the Legislature to consider a bill that would give the commission broader powers to regulate the racing industry and pass regulations -- including the assignment of simulcasting rights -- it feels are in the best interests of the industry’s development. The bill would repeal the existing laws governing horse racing, simulcasting and pari-mutuel wagering and direct the commission to promulgate new regulations for the industry.

“There is still, at least in my opinion by some, the wish to make this industry continue,” Zuniga said last week. “I think that with the flexibility that the legislation that we filed would bring this commission, we would be -- it is my hope to be in a better position to save the industry or help the industry, not save it, necessarily.”

When the Joint Committee on Economic Development and Emerging Technologies held a hearing on the legislation in October 2017, House Chairman Joseph Wagner said he thought the time for action “is closer at hand than it has been previously,” and acknowledged that the Legislature has been slow to take comprehensive action on the horse racing industry.

“I think we all recognize we have kicked the can down on road on it for some good long period of time here and think we need to stop doing that to resolve finally how we’re going to move forward and address those issues,” Wagner said at the time.

Asked about the legislation in August, after the Senate’s inaction allowed the legal authority for horse racing and simulcasting to lapse, Senate President Karen Spilka told the News Service that the idea “certainly is a strong consideration.”

The Gaming Commission filed the legislation again last month, for consideration in the next legislative session.

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