Meadows Racetrack 2012 successes mirrored statewide results
Pennsylvania’s casinos continued to have a positive economic impact on the state’s horse racing tracks last year, but the state bureau that controls gaming revenue acknowledged Wednesday that the racing industry still faces significant challenges.
The Pennsylvania Gaming Control Board released its annual “Racetrack/Casino Benchmark Report,” which concentrates on the impact that Pennsylvania’s casinos have had on the state’s horse racing industry.
A portion of revenue generated from slot machine gaming is earmarked for the horse racing industry to accomplish the intent of the Pennsylvania Race Horse Development and Gaming Act.
According to the PGCB, in 2012, more than $272 million in slot machine tax revenue was generated for the Pennsylvania Race Horse Development Fund.
Of this amount, about $224 million was earmarked for the horse racing industry. The fund is used to enhance purses, assist breeding operations, provide health and pension benefits for horsemen, and benefit the agricultural industry in Pennsylvania.
“Revenue from legalized slot machine gaming in Pennsylvania is helping to fulfill the legislative objectives by enhancing horse racing and breeding programs, preserving thousands of jobs and providing a positive impact on the state’s agricultural economy,” said PGCB Chairman William H. Ryan Jr.
According to the report, findings for 2012 include the following:
• The amount of tax revenue generated for the state Race Horse Development Fund decreased slightly in 2012, by about 1 percent.
• In addition to revenue generated for the Race Horse Development Fund, racetrack casinos operators invested more than $7 million in 2012 and about $46 million since the casinos opened in 2006 to improve the stable and backside areas of their racetracks.
• The number of days in which live racing took place and total numbers of races held in Pennsylvania both increased by about 1 percent in 2012 compared to the same period in 2011.
• Total dollars wagered on Pennsylvania races in 2012, referred to as the live racing handle, was 12 percent higher in 2012 compared to 2011. Live racing handle in 2012 was the highest to date since casino gaming began in 2006.
Meadows gains big
The Meadows Racetrack, which is marking its 50th anniversary in June, saw significant gains in its handle, as well as in payoffs for winning, according to Mike Jeannot, president of Meadows Racing, who provided the following results for 2012:
• The average daily handle was $501,550, a per-card increase of more than $65,000 from 2011. The half-million dollars was far above the $365,886 race-day average at all U.S. harness tracks last year, according to the United States Trotting Association.
• The average win payoff was $12.78 for the year, up from $12.66 in 2011.
• In June, the track showed off six state-of-the-art barns, the result of a $6.25 million investment made by Meadows owner Cannery Casino Resorts of Las Vegas. Jeannot noted that the track charges horsemen rent for the stables, which it reinvests into backstretch improvements.
The track also introduced several green initiatives, including the recycling of frying oil from the casino’s food service operations for conversion to biodiesel fuel for the track’s equipment.
While The Meadows’ 2012 racing results were highly positive, the PGCB’s report also posted some notes of caution about the future of the state’s racetracks.
“… While the racing industry is realizing positive benefits since gaming commenced, it continues to face significant challenges to remain successful,” the report reads. “Although live racing handle increased in 2012, handle generated through simulcast wagering within Pennsylvania continues to decline. This decrease in wagering creates significant challenges for the racing industry and is evidence of a decrease in demand for wagering on races held outside of Pennsylvania.”
Jeannot, who acknowledged that off-track betting in Pennsylvania has taken a hit due to the proliferation of gambling outlets, noted that in The Meadows’ case, “we more than made up for” OTB declines with higher numbers from live wagering, account wagers and on-track wagers in 2012.
In a breakdown of the distribution of slot machine gross terminal revenue, PGCB noted that 45 cents of each dollar is retained as earnings by the licensee; 34 cents goes toward residents’ property tax reduction; and 12 cents is contributed to the Race Horse Development Fund for a variety of purposes. Another 5 cents is distributed for an economic development and tourism fund; and 4 cents goes to the local government share.
However, the report notes that in fiscal year 2012-13, $5 million was scheduled to be transferred from the Race Horse fund to the Farm Products Show fund.
It also notes that beginning in January 2010, 34 percent of the Race Horse Development Fund was allocated away from the racing industry and transferred into the general fund. The percentage fell to 17 percent on July 1, 2010, and will continue at that rate through June 30 of this year, when the transfer is currently scheduled to expire.