Posted: April 15, 2020
As racetracks and horsemen’s groups await clarity on when live racing—probably with only essential personnel on hand at the outset—can resume in many jurisdictions, they also are re-examining purses and racing dates given revenue shortfalls brought about by coronavirus (COVID-19) shutdowns.
In states such as Maryland, Pennsylvania and West Virginia, where live racing was halted in mid- to late March, and in Delaware, where the meet is scheduled to begin May 27, there is no pari-mutuel revenue from live racing or full-card simulcasts. And casino gambling, the largest generator of purse revenue in those states, also has been suspended with no estimate on when operations can resume.
Purse projections clearly will change. Money currently in purse accounts will be critical when live racing returns. And when that occurs, will racing schedules and stakes programs be trimmed to match the available funds and maintain purse levels? Will tracks resume with restrictions on shippers at first? What virus-related health and safety protocols currently in place in stable areas must be accelerated to accommodate racing even with only essential personnel on the grounds?
As of mid-April, the six casinos in Maryland had been shuttered for a month, and the seriousness of the closures was reflected in the revenue report issued by the Maryland Lottery and Gaming Control Agency. Total casino revenue in March was down almost 58% from March 2019.
The Purse Dedication Account receives 6% of video lottery terminal revenue from five casinos and 2.5% from the sixth. In March, the Thoroughbred purse share was $2.06 million versus $4.93 million for the same month last year, which at the time was a record for the state. For the first three months of 2020, Thoroughbred racing had earned $11.1 million from VLTs compared with $13.1 million for the same period in 2019, according to Maryland Lottery statistics.
Laurel Park was ordered to close after three days of live racing with no patrons permitted March 13-15. Much of the in-state off-track betting network was shuttered the week before.
In Maryland, VLT purse payments are sent to the Maryland Racing Commission and then distributed. The money is realized generally within 45 days after the end of a specific month of operation. Should casinos open after live racing resumes, there would be greater lag time for payments.
Though Laurel operated successfully with only essential personnel for the three racing programs, the Maryland Thoroughbred Horsemen’s Association and Maryland Jockey Club haven’t been able to get a target date for reopening Laurel, which was closed by executive order. However, on April 15 Maryland Gov. Larry Hogan did mention there are discussions on a “plan for a gradual rollout of the recovery phase” in the state.
“We’re developing a roadmap for reopening the economy,” Hogan said. “We’ll be discussing it next week in detail. It has to be gradual and safe.”
Laurel was scheduled for four-day race weeks in April and early May followed by 12 days of racing at Pimlico Race Course. With the Preakness Stakes being moved to a later but not-yet-announced date, it appeared racing would remain at Laurel for the time being.
The Delaware Park stable area opened March 15 in anticipation of a live meet scheduled to begin May 27 with purse increases geared toward mid-level competition. The COVID-19 impact—financial and travel-related because of a stay-at-home order—were discussed at the April 15 meeting of the Delaware Thoroughbred Racing Commission.
The Delaware Lottery had not yet released its March casino revenue statistics, but in January and February VLTs and table games at Delaware Park had generated $2.31 million for purses. A similar amount was produced in November and December of last year after the 2019 racing season ended.
The Delaware Thoroughbred Horsemen’s Association said there also was purse underpayment heading into 2020. But Kevin DeLucia, Vice President of Racing and Finance at Delaware Park, said the projection for 2020 is that purses will be down 20%-25% with a three-month casino closure, and that management and DTHA representatives have had a regular discussions about how to proceed.
“It’s pretty significant,” DeLucia said. “Trying to run an 85-day meet (with a purse reduction) would discourage people from coming here. We’re looking at a delay (of the meet) for 30 days as of now unless there are changes in the governor’s declarations or state of emergency. (If we opened in late June early July), obviously it wouldn’t be an 85-day meet.
“It will depend on our future conversations. Hopefully we’ll know more in the next two to three weeks.”
About 260 horses are currently stabled at Delaware Park. The influx slowed dramatically when the COVID-19 restrictions were enacted just days after the barn area opened, and in Delaware, anyone from out of state who visits Delaware must self-quarantine for 14 days under Gov. John Carney’s executive order.
“Part of the problem now is getting horses here with the workers,” said DeLucia, who noted stable employees traveling from other states cannot quarantine in the stable area. “A large majority are from out of state. The (quarantine) would have to be resolved to even get horses here before we’d even think about being able to run.
“There are a lot of unknowns right now, so we’re hesitant to provide a firm (startup) date.”
In Pennsylvania, concerns over business shutdowns have led to legislative action targeting actions by Gov. Tom Wolf. It remains to be seen when live racing will return, but horsemen’s representatives at Parx Racing and Hollywood Casino at Penn National Race Course said they believe it will be tied to the reopening of their respective casinos, which control pari-mutuel operations.
“The purse account (at Penn National) is in good shape,” said Todd Mostoller, Executive Director of the Pennsylvania Horsemen’s Benevolent and Protective Association, “We’d be able to run (financially) but I don’t see a situation of being able to run without the casino being open.”
“A funding issue certainly exists for us,” said Sal DeBunda, President of the Pennsylvania THA at Parx. “But they will not consider opening the racetrack until the casino is open.”