The introduction of pari-mutuel horse racing in Virginia is a risky venture that has the potential to pay big dividends to Maryland's beleaguered racing industry.
Pari-mutuel horse racing has a dismal record in the handful of states that have tried it over the past decade, but there is good reason to believe that Virginia will buck the trend.
The Virginia project appears to have a lot going for it to begin with, and its inclusion in a circuit with Maryland tracks guarantees that it will not be a struggling orphan. If management takes the correct approach with its customers, and simulcasting and off-track betting are winners, Virginia looks like a good bet for a long and prosperous ride.
Joseph A. De Francis, the owner of Laurel Park and Pimlico Race Course, has predicted that Virginia bettors will pump millions of dollars in much needed revenue to his Maryland tracks, which lost a combined $7.2 million last year.
Under an agreement between racing officials in the two states, Maryland tracks will close to live racing during the summer when thoroughbreds are running at Colonial Downs, the Virginia track expected to open in January 1996. Maryland fans will be able to bet on television "simulcasts" of races run elsewhere, including Colonial Downs, which will be managed by the Maryland Jockey Club.
When the Maryland tracks reopen, the Virginia facility will close and its network of a half-dozen off-track betting facilities across rTC Virginia will carry Maryland races in addition to races from other areas.
Betting must measure up to expectations for the circuit to be successful. The venture is built on the presumption that purses -- derived from the dollars bet -- will be sufficiently high to get Maryland owners to send their horses to the new track.
Reviving interest
Virginia, like the industry as a whole, must find a way to revive interest in thoroughbred racing, which is bottoming out as a live attraction.
After enjoying a charmed status for much of this century because of its virtual monopoly on legalized wagering, the racing industry is now competing with state lotteries, riverboat gambling, Indian-owned casinos and the increasing popularity of illegal sports betting.
Racing still ranks near the top of the list every year in total attendance but only because there are so many racing cards run each year. Average attendance has been plummeting steadily. The main reason for the sport's decline in prominence, the industry has belatedly realized, was its initial reluctance to be part of the television-sports revolution.
Short-sighted track operators spurned television, fearing that customers would stay home and bet with illegal bookmakers if the races could be seen from the comfort of one's living room. As a result, an entire generation of sports fans grew up with little or no exposure to racing. That generation in turn grew up to be today's sports editors and television executives, almost all of whom have relegated racing to the level of bowling and dog shows rather than football or basketball.
The only way in which racing has benefited from the boom in other forms of legalized gambling is that increased public acceptance of wagering has led to ballot initiatives permitting racing in states where it was previously prohibited. In all cases, racing was introduced amid high hopes and rosy projections. And in call cases, the results have ranged from disappointing to disastrous.
In Minnesota, a wildly successful opening meeting was followed by years of steady decline and business was virtually ruined by the opening of a casino. In Alabama, ridiculously giddy projections of business despite a poor local economy were off by nearly 100 percent, and the original operators were forced out of business. The track has since reopened at a far more modest level.
The venue everyone was predicting would be an instant hit was Texas, where racing began at Sam Houston Park last spring. It seemed a sure-fire undertaking, since Texas and Texans have had a long-standing affinity for horses and gambling. Once again, though, estimates were off by nearly a factor of two, and race purses have been repeatedly reduced because of lower-than-expected business.
The racing industry must look to innovations if it wants to prosper. The words "off track betting" raise red flags in most people's minds because of the disastrous execution of that concept when it began in New York in 1973. OTB was set up as a separate political entity rather than an arm of the tracks, and has grown into a political monster that has crippled New York racing.
Virginia is counting on good business at six OTB centers located in Richmond, Hampton, Chesapeake, Virginia Beach and Portsmouth.
The final frontier in simulcasting is the ultimate in customer convenience: home betting, which is where the smart money believes racing's future lies.
Far from being a futuristic notion, home betting already is available in Pennsylvania, is coming to New York this winter, and is not far off in the seven other states that already have legalized telephone wagering.
This is the one venue where racing may hold a real advantage over casinos and lotteries. People are unlikely to play blackjack or roulette from their living rooms for long but may well enjoy betting on televised horse races from home.
These issues may seem a bit esoteric in relation to the potential viability of a single track in Virginia, but the national prosperity of racing is becoming more and more related to the prospects for individual tracks.
Basic mistakes
The decline of racing's popularity clearly makes this a less than ,, fruitful time for starting up new tracks. Even so, the operators of these recent ventures all seem to have made several basic mistakes. Track operators for the most part still behave as if racing has a monopoly on wagering. They think that all they need to do in the way of customer education and marketing is to open the doors and say that there is gambling allowed.
Analyzing and wagering on a horse race is far more complicated than buying a lottery ticket or picking a number on a roulette wheel, yet tracks do little to make that process easier or more attractive.
When it comes to customer service, it is little wonder that more Americans are choosing to go to casinos. The smallest bettor in a casino gets free cocktails, and moderate players are often "comped" with food, hotel rooms and show tickets, but track patrons get absolutely nothing and usually have to go into their pocket nearly half a dozen times -- for parking, admission, programs, newspapers and seats -- before placing their first bet of the day.
In addition, racing consistently fails to accentuate its positives as both a sport and a gambling activity. It is hard to find someone who does not like and respond warmly to horses, yet tracks rarely advertise the horse as the star of the show and do little to bring fans closer to them.
Racing is a more winnable game than lottery or casino gambling. A casual fan who bets prudently will have plenty of winning days and can come close to breaking even in the long run.
In Virginia, the task should be much easier because of the existing customer base from the Maryland tracks and because Virginia will be part of a year-round circuit with those tracks. Racing did not have the advantage of a two-state circuit when it was introduced in other areas.
Steven Crist, formerly the New York Times racing columnist and editor-in-chief of the Racing Times, is a member of the New York State Advisory Commission on Racing in the 21st Century.