An aerial view showcasing the excitement of a race at the Fair Grounds.
Churchill Downs Inc. has decided to give up its racing and off-track betting licenses for the Fair Grounds Race & Slots, driven by severe financial challenges and a detrimental court ruling. CDI’s CEO cited a need for $9 million in operational capital, which the company can no longer sustain. The implications are significant for Louisiana’s horse racing industry, with concerns about job losses and the future of a historic racetrack. Advocacy efforts are ongoing to find solutions to preserve the Fair Grounds.
New Orleans – Churchill Downs Inc. (CDI) has announced plans to surrender its live racing and off-track betting licenses for the Fair Grounds Race & Slots, marking a significant shift for one of the nation’s oldest racetracks. The decision was communicated by CDI’s CEO, Bill Carstanjen, in a letter to the Louisiana State Racing Commission dated June 9, 2023. This development comes in light of severe financial difficulties and a recent judicial ruling affecting revenue streams critical to CDI’s operation.
The impetus behind this decision stems primarily from a ruling by the Louisiana Supreme Court that eliminated revenue from historical horse racing (HHR). This ruling has severely impacted the financial viability of CDI, causing them to lose nearly half of the Fair Grounds’ off-track betting revenue. Attempts by CDI to secure financial assistance from the state legislature through various subsidies have been unsuccessful, leaving the company with no choice but to relinquish its licenses.
Furthermore, the recent legislative session saw the passage of two bills that CDI believes will negatively affect its financial interests. One of these bills allows for the expansion of video poker machine limits at truck stops and bars, which CDI argues will further erode its market position. Amid these developments, Carstanjen expressed dissatisfaction with how elected officials have handled discussions regarding potential solutions to the current financial crisis.
The implications of CDI’s decision to surrender its licenses are extensive, raising concerns about the future of Louisiana’s equine industry. The potential closure of the Fair Grounds could threaten hundreds of local jobs and negatively impact local economies that rely on the racetrack. The Fair Grounds plays a historical role in Louisiana’s horse racing scene, traditionally starting its racing season around Thanksgiving and continuing through March. Advocacy efforts are currently underway by horse racing supporters to find ways to keep the Fair Grounds operational and maintain the integrity of the racing season.
CDI contends that it requires a maintenance operating capital of approximately $9 million annually, a figure that it can no longer sustain due to the drastic revenue losses. A representative for CDI characterized the situation as “dire,” noting that the company cannot viably operate under the current financial conditions without significant changes or support.
In response to the unfolding crisis, the Louisiana State Racing Commission is expected to hold an emergency meeting after the legislative session concludes on June 12, 2023. The session’s outcome, along with any proposed solutions, will be closely monitored as stakeholders await clarity on the future of the Fair Grounds and Louisiana’s horse racing legacy.
Senate President Cameron Henry has pointed out that many legislators are hesitant to provide state subsidies to what they consider a profitable company like CDI. This challenge leaves CDI’s future, and that of the Fair Grounds, uncertain as it navigates an increasingly challenging economic landscape.
This situation unfolds against the backdrop of a competitive gambling environment in Louisiana, where both local and state policies are shaping the future of the industry. Advocates for horse racing are rallying to ensure that the Fair Grounds remains a fixture of Louisiana culture and economy, emphasizing the need for proactive dialogue and sustainable strategies that could restore operations at the iconic racetrack.
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