Odds On Racing - Harness Racing

Colonial Downs For Sale, Again

January 13, 2008

For the second time in nine years, the owner of Colonial Downs says he is putting the horse-racing enterprise up for sale.

Jeff Jacobs, chief executive officer of Jacobs Entertainment Inc., issued a statement last night saying the Golden, Colo.-based company wants to reposition its racetrack portfolio to include only facilities that feature multiple forms of gaming.

Consistent with that strategy, Jacobs wants to sell Colonial Downs, which includes a 345-acre racing complex that opened in New Kent County in 1997 and a statewide network of nine off-track wagering facilities.

"Colonial Downs has always been an artistic success and, in recent years, it has experienced economic improvement as well," Jacobs said in the statement. "Unfortunately, we have been unable to secure the tools necessary to allow us to grow live racing in Virginia to its full potential."

When Colonial Downs opened in September 1997, Jacobs said he expected the $55 million facility off Interstate 64 midway between Richmond and Williamsburg would attract 4,000 people a day.

But attendance has consistently fallen well short of that projection and, on most racing days, crowds number in the hundreds at a grandstand that can hold 6,000.

Jacobs announced in November 1999 that he would put the track up for sale, saying losses in its first two years amounted to about $6.5 million. Ian M. Stewart, president of Colonial Downs, also could not be reached late last night.

Instead of selling the track, however, Jacobs augmented his Thoroughbred meets with the addition of Standardbred racing, starting in 2000, and gradually grew from four off-track betting parlors to nine across Virginia.

Total handles were down last year for Thoroughbred and Standardbred meets.

For the Thoroughbred meet that ended in August, the total handle was $50,507,580, down from $51,587,423 the previous year, but attendance averaged 1,996, an increase of 11 percent over 2006. For the harness meet that ended in November, the total handle was $5,726,356, a 13 percent decrease from the previous year, and the meet attracted 19,602 fans, an average of 612.

Jacobs Entertainment and its affiliates own several casinos in Nevada and Colorado and 17 truck-stop video gaming facilities in Louisiana.

"The vast majority of the racetracks in America that maximize the potential and quality of live racing are those that feature gaming opportunities in addition to pari-mutuel wagering," Jacobs said, adding that the company recognizes "the macro trends and what is necessary to bring about growth in this industry."

Jacobs said the sale of Colonial Downs will be handled by Libra Securities, which specializes in the sale of smalland medium-size gaming properties.