Fall MSW Purses At Churchill ($120k), Keeneland ($100k) To Be Level With ’22 Money

Both Churchill Downs ($120,000) and Keeneland Race Course ($100,000) are projecting maiden special weight (MSW) purses this autumn to be level with the money paid out at the same meets in 2022.

Those figures were revealed by representatives of the two tracks Thursday during a meeting of the Kentucky Thoroughbred Development Fund (KTDF) advisory committee.

The Churchill MSW purses for this year's two fall meets (Sep. 14-Oct. 1 and Oct. 29-Nov. 26) have been unchanged since 2020.

In 2020, Churchill offered split MSW purse values in September-$97,000 during the pandemic-rescheduled GI Kentucky Derby week, then $75,000 for the balance of that month. In November 2020, Churchill's MSW races were $85,000.

Keeneland's fall meet this year spans Oct. 6-28. The MSW races there were worth $84,000 back in 2021. In 2020 they were $70,000 after the track lost the entire April meet to COVID-19 and instead ran during July.

The KTDF is funded by three-quarters of 1% of all money wagered on both live Thoroughbred races and historical horse race (HHR) gaming, plus 2% of all money wagered on Thoroughbred races via inter-track wagering and whole-card simulcasting.

The KTDF advisory committee approved the recommendation of the fall meet allotment requests that the Churchill and Keeneland MSW purse estimates were based on. The full Kentucky Horse Racing Commission still has to vote on final approval of that funding.

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New Site Plan for Turf Paradise, but Future Racing Still Hinges on Gaming Legalization

A conceptual site plan newly submitted to the city of Phoenix for the proposed industrial development at Turf Paradise calls for the closure of the track once the under-agreement sale goes forward and development begins. But the incoming owner is still floating the idea of resuming racing at the 67-year-old Thoroughbred venue in the future if historical horse race gaming gets legalized in Arizona.

Audrey Jensen of the Phoenix Business Journal first reported Aug. 8 on the new details about the project, which has been named Winner's Circle Business Park. It proposes eight industrial buildings and two data centers on the 213-acre property that is being acquired by developer CT Realty. The sale, which was announced back in April, is on target to close by the end of this year.

James Watson, the managing partner of CT Realty, told the Phoenix Business Journal, “If we can get [gaming legislation] accomplished I think we can put the racetrack back on a really firm footing and build really beautiful product around it. We're at the moment trying to get some support from the governor…to create a big income stream to the state through these taxes.”

The new details about the Turf Paradise sale and development came one day after Arizona Horsemen's Benevolent and Protective Association (AZHBPA) president Lloyd Yother wrote in an open letter that he would “fight like hell” to ensure racing in the state is not dead.

“There are still many avenues to consider that will save Arizona horse racing. There are even options that include the possibility of running a late race meet in 2023 or possibly early in 2024,” Yother wrote. “If these don't pan out, our board will continue to exhaust every means available to bring horse racing back to Arizona in the very near future.”

Back on Aug. 1, the current ownership that is selling at Turf Paradise announced it wouldn't be opening the track in November as planned for its 2023-24 race meet. In response, horsemen held out hope that the incoming ownership would be willing to operate the remainder of the scheduled season from January through May 4. That aspect of the plan has not been confirmed by CT Realty.

When Turf Paradise concluded its 2022-23 meet in May, Arizona was left without an operational commercial race meet.

Arizona Downs, 82 miles north of Turf Paradise in Prescott Valley, didn't apply for a June-through-September race meet this year because of financial difficulties. That track has been mentioned as being up for sale or lease for over a year. It formerly operated as Yavapai Downs between 2000 and 2010, when ownership at that time filed for bankruptcy.

Elsewhere in the state, Rillito Park in Tucson traditionally runs weekends from early February through early April. Earlier this year, Cochise County Fair in Douglas ran a two-day mixed meet Apr. 15 and 16, as did Santa Cruz County Fair at Sonoita May 6 and 7.

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Judge Rules Belterra Owes Ohio HBPA $2.7M In ‘Deprived’ VLT Money

A money disagreement that has simmered for nearly a decade got a step closer to settlement Thursday when a federal judge ruled the Ohio Horsemen's Benevolent and Protective Association (OHBPA) is entitled to $2,769,652 in gaming revenues that the present and former owners of Belterra Park withheld between 2014 and 2018.

The dispute arose from Belterra's failure to pay the OHBPA its share of net-win video lottery terminal (VLT) commission from Belterra Park. The quarrel was exacerbated when the two sides disagreed over the rate that was supposed to be the horsemen's lawful cut and whether or not retroactivity applied to that rate, with the OHBPA alleging that Belterra's withholding of money over a four-year period amounted to “unjust enrichment.”

The Mar. 30 order by Judge Algenon Marbley in United States District Court for the Southern District of Ohio (Eastern Division) is not a final judgment. But the judge did write that, “this Court finds that statute requires Defendants to pay Plaintiff the [higher] 9.95% rate from May 1, 2014, to June 30, 2018 [and that] having found that no reasonable jury could find for Defendants on Plaintiff's unjust enrichment claim, this Court GRANTS summary judgment on this issue.”

Dave Basler, the OHBPA's executive director, told TDN via phone Friday morning that the horsemen were pleased with the ruling.

“We felt throughout that that was money that was owed to the horsemen, and felt strongly that that was something that we needed to pursue legally until it was resolved,” Basler said. “The money obviously would be a benefit to our purse account.”

The initial complaint filed Dec. 18, 2020, explained that when VLT gaming was first legalized by Ohio in 2009, the state authorized racinos to retain 66.5% of revenues, with “between 9% and 11%” of those net-win proceeds to then be paid to Thoroughbred and Standardbred entities.

That range of percentages was set five years before any actual VLT gaming happened at Belterra, and in 2012 the state authorized the Ohio State Racing Commission to set the actual rate that would go to the horsemen. But until a new, firm rate got set, 9% was to be used as the placeholder to determine purse proceeds, according to an escrow agreement negotiated between Belterra and the commission.

Belterra didn't open for VLT gaming until May 1, 2014, largely because the track formerly known as River Downs was undergoing a substantial renovation to rebrand the property as Belterra Park Gaming & Entertainment Center. The capital expenditures for that project were to be a factor in determining the new calculation rate for purse money, but the complaint alleged that Belterra stalled and tried to overstate the costs it incurred fixing up the property, an allegation that Belterra denied.

Eventually, on June 27, 2018, the racing commission set the percentage of Belterra Park's net-win VLT commission that it owed to the OHBPA at 9.95%. The OHBPA interpreted that rate to mean both retroactively and moving forward, while Belterra argued that the OHBPA was not due any retroactive funds, because Belterra and the commission had negotiated over the catch-up payments and had factored that aspect into the escrow agreement.

Four days after that final rate was established, the OHBPA did, in fact, begin receiving its full 9.95% from Belterra. But the bone of contention that led to the lawsuit had to do with the retroactivity surrounding the remaining .95% beyond the 9% stipulated in the escrow agreement. The OHBPA argued that Belterra never made good on the four-year difference between the placeholder rate and the revised rate, which is how the plaintiffs arrived at the $2,769,652 figure.

“Here, Plaintiff argues, because Belterra Park was the only racino in the state with which Plaintiff failed to reach agreement on the VLT commission rate, the parties entered a temporary 'escrow agreement' of 9% pending an administrative ruling by the Racing Commission,” the Mar. 30 order stated.

“Plaintiff maintains that the Escrow Agreement was only meant to be temporary; it could not set the commission rate because it was not a method authorized by the statute. As such, Plaintiff argues, the 9.95% commission rate must be backdated because the statute considers only one fixed rate that is to be applied from the moment the first coin is dropped,” the order stated.

The judge agreed with the HBPA's reasoning, explaining the decision this way: “This Court finds the best way to apply the statute is to do so based on its plain meaning. Plaintiff was due payment using a rate determined by the Racing Commission in the absence of an agreement with Belterra Park. The Racing Commission did eventually determine a commission rate of 9.95%. This commission rate is thus applicable for the entire period that Belterra Park operated its VLT gaming.

“Indeed, the statute provides that the Racing Commission must set the rate within six months. This did not happen. No authority indicates, however, that the Racing Commission's tardiness has any relevance to this case. As such, this Court finds that statute requires Defendants to pay Plaintiff the 9.95% rate from May 1, 2014, to June 30, 2018,” the order stated.

The OHBPA had also asked to be paid prejudgment interest on the outstanding payment. But the judge denied that request at the Mar. 30 summary judgment stage on a legal technicality because the plaintiffs failed to state whether they sought the interest “pursuant to statute or common law.”

The order did state, though, that the OHBPA could file a separate motion for prejudgment interest, which leaves that aspect of the case open for the time being.

Also unknown at this stage is whether the defendants plan to appeal. There are multiple parties involved on that side of the case.

Belterra Park itself is named as a defendant, as is the racino's current owner/operator, Boyd Gaming Corporation.

Pinnacle Entertainment, Inc., (which, according to the suit, owned Belterra between 2011 and 2018) and Penn National Gaming, Inc. (which, according to the suit, briefly had an ownership interest in Belterra in 2018), are also listed as defendants.

David Strow, Boyd's vice president of corporate communications, answered a Friday query from TDN about a possible appeal by emailing that the company did not wish to comment on the court order at this time.

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Beshear Signs Bill to Outlaw Gray Machines

House Bill 594, better known as the bill to ban unregulated and untaxed gaming machines known as “gray machines” in the Commonwealth of Kentucky, was signed into law Thursday, Mar. 16 by Governor Andy Beshear. Kentucky is the first state to pass stand-alone legislation banning unregulated gambling machines.

For more information, see our story from last month outlining the threat of gray machines, which made them the main focus of the Kentucky Thoroughbred Farm Managers' Club (KTFMC)'s monthly meeting.

Visit here for information stemming from when the Bill passed the Kentucky Senate.

Click for the official record of HB 594.

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