Fair Grounds Race Course Faces Uncertain Future Amid Sale Talks

News Summary

The Fair Grounds Race Course is set to open its 150th season on Thanksgiving Day, but its future is uncertain as potential sale discussions emerge. Churchill Downs Inc. threatens to cease operations without state financial support, especially after legal issues have impacted slot machine revenues. Local figures have identified potential buyers, while the facility’s significance to the local economy raises concerns about its viability and the need for legislative action.

New Orleans – The Fair Grounds Race Course is facing an uncertain future as it prepares to open its 150th season on Thanksgiving Day amidst potential sale discussions. This year’s season opener on November 15 saw losing bets tossed onto the ground, indicating rising concerns among stakeholders. The current owner, Churchill Downs Inc., has threatened to cease operations in Louisiana if the state does not provide a necessary public subsidy to offset recent financial setbacks caused by legal issues affecting slot machine revenues.

Churchill Downs executives have highlighted that without state support, the Fair Grounds would not be able to sustain its operations, risking the 76-day horse racing season that draws substantial revenues for the local economy. The Louisiana Racing Commission’s chairman has indicated that legislative discussions are planned following a recent court ruling which blocked certain slot machines known as Historical Horse Racing (HHR), crucial for the Fair Grounds’ financial viability. With Churchill Downs facing potential losses, the urgency for a resolution has increased significantly.

In response to the unfolding situation, local horse racing figures are identifying two billionaires, Gayle Benson and Jim Bernhard, as potential buyers of the Fair Grounds should it be put up for sale. Benson, owner of the New Orleans Saints and Pelicans, has a history in the horse racing world and had previously sought to acquire the Fair Grounds alongside her late husband. Meanwhile, Bernhard, founder of Bernhard Capital Partners, has not publicly responded regarding a potential purchase.

The Fair Grounds has long been a staple in the New Orleans community, having hosted thoroughbred racing since 1838 and being recognized as one of the country’s three oldest continuously operated racetracks. The facility sits on 145 acres adjacent to City Park and has hosted the New Orleans Jazz and Heritage Festival for over 50 years. In the past year, the track paid out $32 million in purses, representing nearly half of the state’s total thoroughbred purses despite holding only 27% of the region’s racing days. Overall, the Fair Grounds and its off-track betting (OTB) facilities processed $250 million in bets, which accounted for half of the statewide total and demonstrates its critical role in Louisiana’s racing landscape.

Despite these contributions, Churchill Downs has reported challenges stemming from a Louisiana Supreme Court ruling that rendered certain HHR machines invalid, affecting the generated income for the Fair Grounds. Lawmakers are working to advance legislation either to legalize these machines or to provide alternative subsidies similar to those recently approved in Florida. Without action to replace these revenue streams, Churchill Downs indicates that operations could come to an imminent halt.

Compounding the situation are the upcoming deadlines for upgrades required for the Fair Grounds’ track and operations, which could lead to daily fines for Churchill Downs if not addressed promptly. The track typically requires approximately $9 million annually to maintain regular operations, underscoring the financial pressure under which it currently operates.

Although previous interest has been documented regarding a potential purchase by both Benson and Bernhard, there have been no formal inquiries made public as of yet. As the Fair Grounds prepares for its opening, the community watches closely, aware that without significant legislative or financial support, the cherished racetrack may not survive the looming challenges.