Odds On Racing - Harness Racing

Tough Times at Lebanon

February 18, 2008

Times are getting tougher for the Lebanon Raceway, a Warren County icon where trotters have raced for years. The “handle,” or amount wagered at the track, has shown a steady decline from $49 million in 2003 to $42 million in 2006 to about $36 million last year.

In many ways, Lebanon Raceway is suffering the same downward spiral that Ohio’s other six horse racing tracks are seeing, said Mel Hagemeyer, director of operations at the Warren County track.

Online betting enables people to stay at home and bet from their living rooms. Soon, casino gambling will take root at race tracks in central Indiana, now that the state legislature has approved expanded gambling operations at tracks there, horse racing industry experts say.

Statewide, total wagers, including off-track betting and wagers on races simulcast from other cities, amounted to $372 million 2007, down $58 million, or 13 percent, compared to 2006, according to figures supplied by the Ohio State Racing Commission. Wagering is down nearly 41 percent since 1998, when wagers hit $629 million.

“The Ohio racing industry is standing on quicksand,” said Elisabeth Alexander, president of Ohio Thoroughbred Breeders & Owners. “It’s crucial that something happen in the next year to give us the tools to compete with neighboring states.”

The fate of the Lebanon Raceway is of special concern to Warren County.
The county owns the fairgrounds where the track and grandstand sit, and a percentage of the handle from the race track has basically paid for the annual Warren County Fair since 1948.

That’s the year the Fair Board, also known as the Warren County Agricultural Society, signed a lease with two horse-racing organizations, Miami Valley Trotting Inc. and the Lebanon Trotting Club. That lease has automatically renewed every year since.

Now, as the race track’s numbers dwindle, county commissioners pay closer attention to the business arrangements. Commissioners say they need to convert years of traditional, but mostly unwritten arrangements, into a formal written contract with the Fair Board, which oversees the fairgrounds, the race track and other special events.

In recent years, the race track has generated about $100,000 a year for the county fair. But with declining revenues, the race track funding might not be enough to support the fair. As things get tight, the county wants to spell out the fair board’s obligations to the county.

A new lease between the county and the fair board is expected to be ready for signatures by the end of the month. That deal would not affect an existing contract between the Fair Board and the two racing entities.

Another reason for seeking a new lease: County officials want to be prepared if the state legislature ever approves other gambling options at Ohio race tracks.

The Ohio horse racing industry for years has wanted to add slot machines and other gambling options at local tracks. But in 2006, voters defeated a statewide ballot issue that would have allowed slot machines at all Ohio racetracks, including the Lebanon track and River Downs thoroughbred track in Anderson Township.

Before the issue comes up again, commissioners want a lease in place that requires local government approval before any expansion of gambling can occur at the fairgrounds.

“We want to support a local industry,” said Commissioner Dave Young. He said commissioners also want to ensure they control county assets.

The Fair Board has been responsible for staging the Warren County Fair each summer since 1850. The first fair took place at a site on East Main Street in Lebanon. Two years later, the Warren County Fairgrounds on North Broadway Street became the permanent site for the annual summer tradition.

The fair opened with a single wooden grandstand on five acres. Today, the facility takes up 57 acres and has 26 buildings. Fifteen of those buildings generate as much as $400,000 in annual stall rent to the Fair Board, said Hagemeyer, a board member. Many of those stalls are occupied by the trotters.

Lebanon Raceway hosts live harness racing on Friday and Saturday nights, October through May, and for a few days during fair week. Inside the grandstand, the track also simulcasts horse races from other tracks all year.

County officials are increasingly concerned about what would happen if the racetrack closes or looks to move. Increased casino-style gambling at horse tracks in neighboring states is resulting in larger purses that are beginning to lure away Ohio-based jockeys, drivers and horse owners, industry experts say.

Legislatures in neighboring Indiana, West Virginia and Pennsylvania now allow slots or other gaming activities at their race tracks.

An “Indiana Live” casino is under construction at Indiana Downs, a thoroughbred and quarter horse track along Interstate 74, near Indianapolis. About 1,000 slot machines will be in play when a portion of the casino opens, possibly this summer.
The West Virginia legislature approved a bill last year that permits blackjack, poker, craps and roulette and other games at four racetracks there.

Revenues from 2,000 slot machines at the year-old Presque Isle Downs and Casino in Erie, Penn., have dramatically increased the purses for winning thoroughbreds. Horse owners and jockeys can win $45,000 in races that pay less than $10,000 at Thistledown in Ohio, just 110 miles to the west, said Alexander.

Kentucky has a far bigger racing industry yet also does not allow casino-style gambling at horse tracks. An intense debate is going on about this issue. Just this week, Kentucky’s governor announced a proposal calling for 12 casinos to be scattered statewide, including two in Norhtern Kentucky.

While the Lebanon racetrack, the fair board and the county commissioners work out the paperwork at the local level, all say the future of horse racing in Ohio depends on state lawmakers and voters who will ultimately decide whether to allow casino gambling and where.

Until a decision is made, Ohio horse tracks will likely continue to lose participants to tracks in other states that have casino-style gambling because those places can afford to offer bigger purses. Gradually, Ohio is losing harness drivers, thoroughbred jockeys, trainers and owners, all of whom are lured by the chance of bigger winnings elsewhere, said Stella Hagemeyer, 86, who has been associated with horse racing in Ohio for 41 years.

Racing runs in the family. Mel Hagemeyer is her son. Stella’s husband, Maynard, 89, served on the Fair Board for 42 years. Together, they run Hagemeyer Farms, a breeding and training facility in Washington Township. Breeding facilities also are affected by the downturn in horse racing in Ohio, she said.

Horses that race in Ohio have to be bred in Ohio. Yet these days, most studs are registered in Pennsylvania and the foals follow the registered blood line of the stallion, even if the mare is registered in Ohio.

Jack Dailey, 43, a trainer and driver from the Xenia area, says he cannot wait for a political solution. He plans to head to Indiana as soon as the season opens there.
“I can’t stay in Ohio and make a living,” Dailey said. “It’s hard to even feed the horses.”