Odds On Racing - Harness Racing

Praire Meadows Forgoes Cuts

December 21, 2007

A Des Moines businessman's appeal to cut $10 million out of Prairie Meadows' horse-racing program drew a lukewarm response from board members of the racetrack-casino Wednesday.

Real estate magnate Bill Knapp was quoted Wednesday as saying that horse purses and racing days should be reduced so that the not-for-profit Prairie Meadows will have $10 million more to spend on other causes. His statement came after Prairie Meadows estimated that horse racing lost $29.2 million in 2006.

Knapp's comments were not discussed at the board meeting Wednesday and his idea is not part of any legislative changes that Prairie Meadows will seek next month.

Horse interests countered that they think the subsidy is less, and that it comes in return for their support of bills that enabled Prairie Meadows to add casino gaming.

Four of the 13 board members said they were open to discussing Knapp's position, while one said he opposed it.

"I don't think anybody's in a position at this point to support or not support it," board member Tom Whitney said. "I think that the debate needs to move forward, and that Bill has contributed to that debate. And I think it's healthy.

"Without the horsemen's support, we might not have had a casino. We have an obligation to the horsemen of Iowa, and we have to honor that. That's not the debate. The debate is at what level do we honor that? I don't want people thinking we're going to get rid of horses."

Perry Chapin, another board member, said he feels the racing program benefits the statewide agricultural industry.

"I don't think Knapp knows what he's talking about," Chapin said. "I think it's a good investment for the state of Iowa. The last economic study I saw was $300 million back (to the state economy). That's pretty good, I think."

A law that took effect last year requires Prairie Meadows to spend 11 percent of its casino revenue, minus the county's annual $15.6 million rent payment, on purses. The measure, supported by horse interests who saw purses drop from $19.9 million in 2003 to $15 million in 2005, was included in a bill that allowed Prairie Meadows' casino to add table games such as blackjack and craps.

Despite the casino's success - it will have $203 million in revenue this year - board members said there is a cash crunch as they try to satisfy all the community groups that seek money. Board member Ron Morden said all expenses need to be examined.

"The thing that everyone, including the horsemen, are going to have to realize is that this pot is only so big," Morden said.

Prairie Meadows' 2008 budget, which was approved Wednesday, estimates its casino revenue will increase by 4.7 percent, resulting in $36.4 million for community governments and charities.

Of that amount, nearly $27.7 million will go to its landlord, Polk County, in the form of a lease, plus revenue- and tax-cut sharing; $4.1 million to the city of Des Moines; $738,000 to Polk County schools; and $4 million to charities.

Board member Nolden Gentry said Prairie Meadows should be giving $6 million to $8 million to charity.

"I think we should be able to give more to charity and to education," board member Sunnie Richer said. "We're really limited in all that. It's a balancing act between state-county-city funding, the racing industry and the community at large. We have so little money to give away to charitables."

The board also Wednesday approved a 20 percent performance bonus for general manager Gary Palmer, giving him $50,000 above his $250,000 base salary.