Simulcasting…here are some answers
3/20/08 By Kenneth W. Terpenning - KyHarnessRacing.com
3/20/08 By Kenneth W. Terpenning - KyHarnessRacing.com
Some have long questioned the deal to sell the rights
to simulcast thoroughbred racing to Keeneland by
former Red Mile executives John Cashman and Mike
Lang some years ago.
I will admit, as a newer resident to Kentucky, I
questioned it myself as I had never been to a facility
that only simulcasted one breed and not the other.
Well, I asked some questions recently and found out
some of what I was missing to help me better
understand the situation. I thought I should share it
with all of you.
Previous to the way things currently exist with the
simulcasting situation between the Red Mile and
Keeneland, there was chaos. With the Red Mile and
Keeneland being less than five miles from each other
and each facility wanting a piece of the pie, a system
needed to be set up for each to have their fair share.
In order to share the simulcasting rights, the decision
was made by the Kentucky Racing Commission to give
full simulcast rights based on each track’s live handle.
In other words, if your live handle was the largest,
then your facility was given the most days over the
other facility that was given the lesser number of
days. In addition, a facility would automatically receive
full simulcasting during their live meet.
Back then, Keeneland raced two months live and the
Red Mile raced two months live giving each facility full
simulcasting for two months each out of the year
leaving eight months of non-live meet simulcasting to
be divided up according to handle. As most of you
know, the handle at Keeneland was and still is greater
than that of the Red Mile. Based on this difference,
Keeneland was awarded five months of the eight
available months and Red Mile was rewarded the
remaining three. The kicker to this policy was that the
number of days awarded was also re-examined each
and every year to see the handle changes at each
track and if a track enjoyed an increase or suffered a
decrease in handle from year to year then their days
were increased or decreased accordingly. Again, as
most of us know, the handle at the Red Mile has
suffered decreases from year to year while Keeneland’
s has changed, but not as significantly.
With the handle decreasing at the Red Mile, the
number of simulcast days decreased as well each
year. In addition to all of that, the months given to
the Red Mile were the worst of the year, November,
December, and January. Each of these months usually
suffered the highest number of weather related
cancellations. The remaining months of the year the
Red Mile was closed completely. The wagering
community could not get a handle on the system
either as there were months they would not know if
they needed to go to Keeneland or the Red Mile to
wager on simulcasting.
Based on the facts of only two months of full
simulcasting guaranteed and the loss of more days to
Keeneland the other months the Red Mile execs
decided to sell the thoroughbred simulcasting rights
to Keeneland. This resulted in both facilities being
able to stay open year-round for simulcasting.
The downside to the decision was the legislative
statute passed by the Kentucky General Assembly
basically solidifying the agreement between the two
tracks. KRS 230.3771 (4) reads: "Other provisions of
the Kentucky Revised Statutes notwithstanding, any
track in a geographic area that contains more than
one (1) track within a fifty (50) mile radius of any
other track may only receive interstate simulcasts on
racing of the same breed of horse as the track was
licensed to race on or before July 15, 1998."
The statute also continues on how simulcast money is
to be split between racetracks and horsemen.
To sum it up, if the Red Mile took thoroughbred
simulcasts then they would have to double the handle
than that normally made by Keeneland on
simulcasting to obtain the same profit and have the
Kentucky Harness Horsemen receive their share which
is simply not feasible.
This is all because of the split paid out to the
thoroughbred associations listed in the statute.
Oh wait, then there’s the fee paid to the tracks
sending their signal. If you want a thoroughbred track’
s signal, you have to pay an eight per cent fee,
thereby cutting into the profit again. The Red Mile and
most harness tracks charge only three per cent for
their signals.
With all of this weighing in, anyone with business a
sense will tell you, that it is a deal the Red Mile
executives made and needed to make for economic
reasons. Also for satisfaction of customers, and
product consistency.
The Red Mile now simulcasts seven days a week, 364
days a year from noon to midnight. The fault cannot
be placed on the Red Mile’s shoulders.
In order for things to change for the better of the
harness industry in Kentucky and for the Kentucky
Harness Horsemen with regard to simulcasting
revenue, the burden would have to be placed on the
Kentucky General Assembly to amend the statutes
that affect the monies and policies of the tracks. Then
the deal hammered out for the simulcasting rights
would have to be undone between the tracks.
It is more effective for the horsemen to focus their
energies toward coming up with ways to change our
image and reputation as a sport and inventing new
ways to generate revenue and increasing fan
attendance rather than spinning our wheels on this
issue that has been long forgotten.
However, we should welcome any ideas that show
enough promise to redo the way simulcasting impacts
us in our favor and embrace these thought factories
should they ever come along.
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