Proposal Clouds Playfair Plans Deal With Muckleshoot Threatened By Emerald Revenue-Sharing Idea, Off-Track Tribal Manager Says
An off-track wagering revenue-sharing proposal by the operator of the new Emerald Downs race track could kill Muckleshoot Indian Tribal Council plans to lease Playfair Race Course.
One day after the tribe and Playfair owner Jack Pring announced an agreement in principle for the tribe to take over operations of the Spokane track, reaction to a revenue proposal by Ron Crockett’s Northwest Racing Associates shook up Wednesday’s meeting of the Washington Horse Racing Commission.
Crockett is building Emerald Downs, an $82 million thoroughbred racing facility that opens here on June 20. His proposal would cost Playfair $1 million per year, according to Phil Ziegler, who manages the tribe’s off-track betting parlor at the Muckleshoot Indian Casino.
Ziegler told the commission that financial projections to acquire Playfair and eventually make it profitable are based on the current formula used by the state’s three tracks to share off-track betting revenue. He said the new revenue-sharing agreement proposed by Northwest Racing Associates would skew those projections.
“If we have to live with this agreement, racing in Eastern Washington is dead,” Ziegler, holding up a copy of the NWRA proposal, told the commission members. “This agreement makes it impossible to operate Playfair. This kills it.”
The bottom line, he said, is that only Emerald Downs would be able to run racing in the state of Washington.
On Thursday, Ziegler said the tribe will proceed with plans to open and operate Playfair while it fights Crockett’s proposal.
The proposed agreement would essentially:
Reduce from 4 percent to 0.5 percent the amount of money an off-track betting parlor at a state race track or an Indian casino would retain from bets collected by simulcasting Emerald Downs races.
Allow the off-track at Emerald Downs to keep up to 11 percent of the money bet on races from Playfair and Yakima Meadows.
Require that Northwest Racing conduct the betting at all off-tracks and be allowed to collect an admission fee.
Increase the share of the racing take to 0.5 percent for the 22 taverns and restaurants around the state that simulcast horse racing.
Currently, off-track sites keep the money they make on food and beverage. Admission price is split with the race track, which assumes the cost of putting up the satellite dish, installing betting machinery and paying mutuels clerks who handle the money.
The general manager at Emerald Downs, Marie Connelly, said provisions of the new agreement are necessary given the size of Crockett’s investment. A 4 percent share was “just not feasible,” she said.
Connelly said Northwest Racing Associates has had previous discussion with the other two track operators.
“To say that the status quo was something everyone thought would be maintained, I don’t believe that is the case,” she said.
Jerry Levine, a Los Angeles attorney representing the Muckleshoot Tribe, said the proposed agreement changes the basic tenet under which the state Gambling Commission negotiated gaming compacts with the tribe, including off-track betting.
Levine said each tribe will have to make its decisions based on that change.
Asked after the meeting about the tribe’s concern, commission chair Barbara Shinpoch said she wasn’t sure if the commission had the authority to get involved in off-track contracts. In the past, she said, the commission has stayed out of them.
Ziegler also asked the commission to reserve racing dates of Sept. 19 to Oct. 25 and Nov. 7 to March 31, 1997, for Playfair.
Crockett said Thursday, “Back when you had reasonable (on-site wagering) handles at Playfair, Yakima and Longacres, it was much easier to arrive at the sharing devices. It was easier to make it work for everybody.
“What’s not told today, and what contributes to the problem, is that when the (gambling) compacts were written, you had the notion that they (a tribal casino) could pick the best deal offered (to off-track betting sites).”
Choices came down to taking nothing from betting and letting the track set up the betting machinery - as restaurants do - or take the 4 percent that existing tracks get and cover your own off-track betting costs.
“What you had was Playfair, Emerald and Yakima as a satellite under the race track notion (4 percent) and 22 similar satellites (with 0 percent of the take),” Crockett said. “When the Muckleshoot picked the race track one (4 percent) they got the same return without the expenses a race track would have. It was a very good deal.”
By granting one off-site betting parlor 4 percent and the others zero, “you start wiping out the restaurants and taverns” that are off-track sites, Crockett said.
“Project into the future and you can see the erosion of the tavern types (of off-track betting sites) and an escalation of the casinos,” he said. “The problem is that the compacts have an increasing number of casinos able to ride along with the percentage that went to race tracks. Suddenly that 4 percent would make it too big a hit for us.
“You have to establish the ground rules. The total casino handle (eventually) could get up to $250,000 a day. The difference in 4 percent and .5 percent over 125 days of racing is a million dollars.
“That million is near and dear when you’ve got this size of a project to cover. We have to come up with one contract to make it play.”
An industry-wide shortage of competitive thoroughbreds is another serious concern.
Asked if three tracks can co-exist under existing conditions Crockett said, “You might not like the answer. What occurs to me with the number of horses it takes to fill races for a year, with the dates that three tracks would like for a year, and the total potential handle that exists for a year … it (three tracks) doesn’t compute.”
Since Longacres closed in 1992, “the fan base has eroded some and the numbers of licenses to breeders and owners are down,” Crockett said. “The industry clearly needs a new track in King County.”
As anyone who has followed the sport in Washington knows, Crockett has opposed full-card simulcasting.
“I have not wanted to see higher quality out-of-state racing offered here until live racing is re-established,” he said. “Look at Portland. When they inundated people with the Gulfstreams and the Hollywood Parks, people lost interest in the live product because it wasn’t as good. Portland handles $123,000 a day on their live card.”
Projections are that with a state-wide audience in the prime warm-weather dates - with no competition - Emerald Downs will do $1.3 million or more.
“I’m trying to get this industry on its feet,” Crockett said. “After we re-establish live racing, there may well be a time to supplement it with something from out-of-state.”
Why not agree to a California-style simulcasting agreement, where Bay Area tracks and those in Southern California stagger starting times and together play to a much larger audience? “There’s only one major population center (in Washington),” Crockett said. “There’s a huge inequity in what’s generated here and what’s generated elsewhere. It’s not like California.
“I’ve got $82 million invested. I’m not going to pick on what someone else has invested, but it’s a small percentage of that. To share equally doesn’t play at all.
“I’ve tried to arrive at formulas that would keep everybody happy, but there’s not enough total state handle. It’s like taking 12 people out to dinner and having enough money for 10.”
Ziegler said all is not discouraging news.
“We knew about this (Tuesday, when they announced the Playfair agreement). We went ahead with the lease in spite of it,” he said. “If, in fact, this can’t be changed, it’s a killer, but right now we’re going to apply for a license and go to work trying to save racing in Eastern Washington.”
, DataTimes