News Summary
Churchill Downs has threatened to exit Louisiana unless the state permits Historical Horse Racing machines, which are crucial for its profitability. Recent court rulings have prohibited these devices, significantly impacting Fair Grounds’ revenue. Without HHR machines, the facility faces a potential loss of 46% of annual revenue. Despite legislative efforts, the future of horse racing in Louisiana remains uncertain as state officials and the racing community seek a resolution to this pressing issue.
New Orleans – Churchill Downs, the owner of Fair Grounds Race Course & Slots, has threatened to withdraw from Louisiana if the state fails to authorize the use of Historical Horse Racing (HHR) machines. This decision stems from recent court rulings that have prohibited the operation of these gambling devices, which Churchill Downs claims are essential for its profitability.
The company has indicated that it will not proceed with the upcoming 2025-2026 racing season unless the Louisiana Legislature intervenes to resolve the issue. Ozair Shariff, a lawyer representing Churchill Downs, expressed disappointment during an emergency meeting of the Louisiana Racing Commission, asserting that the future of the Fair Grounds is now at risk due to the current situation.
HHR machines, which allow gamblers to place bets on anonymized replays of previous horse races, were authorized by the Louisiana legislature in 2021. However, a court ruling deemed this type of gambling unconstitutional. The ruling classified HHR machines as a new form of gambling that requires voter approval in each parish to operate. The Louisiana Supreme Court upheld this ruling in March, resulting in a loss of an important revenue source for Fair Grounds.
The absence of HHR machines is projected to eliminate approximately 46% of annual revenue and 74% of after-tax profit for Churchill Downs in Louisiana. This financial setback poses challenges in covering the facility’s annual operating costs, which amount to $9 million. Historically, the HHR machines have played a vital role in offsetting racing-related losses, enabling the Fair Grounds to break even financially.
In addition to the Fair Grounds racecourse and slot floor, Churchill Downs operates 13 off-track betting outlets throughout the state. The potential loss of HHR machines raises concerns about the viability of racing in the region, particularly since the Fair Grounds accounted for nearly half of Louisiana’s total wagering handle last year. They also contributed significantly to the state’s equine industry by paying out $32 million in purses.
Former Fair Grounds official Louie Roussel III has criticized Churchill Downs’ management, accusing CEO William Carstanjen of using intimidation tactics against state officials and urging the commission not to be misled by their threats. Likewise, the chair of the Louisiana Racing Commission, Edward Koehl, has warned Churchill Downs of possible daily fines should they fail to start making necessary capital improvements or adhere to previous agreements regarding the upcoming racing season.
In response to the loss of gambling revenue, Louisiana legislators are actively exploring solutions that may help sustain the racing industry. One proposed measure, House Bill 540, seeks to allow bars to operate an additional video poker machine and permits truck stops to add up to 10 more machines. This initiative aims to generate tax revenue that could support horse racing tracks across the state.
The legal and financial challenges facing Churchill Downs and the Fair Grounds highlight the critical intersection of gambling law and horse racing operations in Louisiana. Without the reauthorization of HHR machines, the future of racing at the Fair Grounds remains uncertain, leaving both the racing community and state officials to navigate this complex situation in hopes of finding a resolution that benefits all parties involved.
Deeper Dive: News & Info About This Topic
- Paulick Report
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- Google Search: Horse Racing in Louisiana
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- WDSU News
- Google News: Churchill Downs
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