Racino

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A racino is a combined race track and casino. In some cases, the gambling is limited to slot machines, but many locations are beginning to include table games such as blackjack, poker, and roulette.

Business model

In 2003, shortly after attending a Racing & Gaming Summit in Tucson, Arizona, Joe Bob Briggs described the economic motivation of American race track owners to convert into racinos:

Horse racing and dog racing have been in a slow decline for almost 20 years now....the only tracks that have really thrived are the ones that have slot machines. In many cases their live handle (the daily amount bet at the track by live customers) has continued to decline, but their revenues have shot up so fast that they're able to offer the biggest purses and thereby attract the best horses. Tracks like Delaware Park and West Virginia's Mountaineer Park, once considered places where local degenerates bet on broken-down nags in claiming races, are now among the wealthiest tracks around, with the best races. Fabled tracks like Pimlico, on the other hand, sometimes have trouble making ends meet.^[1]

History in the United States

The first real financial success story for racinos in the United States was the mid-1990s turnaround of the Prairie Meadows racetrack, in Polk County, Iowa. Prairie Meadows, which opened in 1989 but went bankrupt by 1991, was bought by the county government in 1993.^[2] As reported in a January 2003 study for the Massachusetts State Lottery Commission:

In 1994, Iowa voters authorized reel-spinning slot machines at Iowa racetracks (including Greyhound tracks). Polk County spent an additional $26 million to convert the Prairie Meadows clubhouse into a casino and install 1,100 slot machines. On April 1, 1995 the slot casino (or "racino") opened for business. In the 12 months ended March 31, 1996 machine revenues totaled $119.3 million, enabling Polk County to pay off the $27 million bond issue that paid for the clubhouse casino conversion within that initial year and retire the track's initial $38.8 million bond issue 17 years early.^[2]

The report further showed that some of the Prairie Meadows racino's increased revenues were used to increase horse racing purses, which attracted better horses to the racetrack and helped to develop horse breeding in Iowa.^[2]

USA Today noted in a June 2003 article that receipts from slot machines are divided about evenly in four ways:

• Payment of the operating costs and payouts to lucky gamblers,
• State taxes,
• Prize money (the purse) offered to jockeys and horse owners, and
• Profit for the racino operator.

A November 2003 article in Global Gaming Insider noted that the creation racinos had led to consolidation in the ownership of racetracks, with Magna Entertainment Corporation (currently Stronach Group) and Churchill Downs Incorporated the largest.

In November 2004, Florida voters amended their state constitution to allow slot machines at parimutuel facilities.

As of 2013, racinos are legal in ten U.S. states: Delaware, Louisiana, Maine, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, and West Virginia.^[3] The first racino in Pennsylvania opened in November 2006. West Virginia pioneered the concept when MTR Gaming Group was allowed to introduce video lottery terminals (VLTs) to the venue now known as Mountaineer Casino, Racetrack and Resort in Chester. Delaware, Rhode Island, and West Virginia, three of the members of the Multi-State Lottery Association (MUSL), jointly ran a progressive VLT game, Ca$hola, from 2006 to July 2011; the three lotteries began offering Ca$hola's successor, MegaHits, on July 15, 2011.

References

External links

• Dictionary entry tracing the term back to 1995
• Gambling drives passion for ponies, a June 2003 article from USA Today
• Argument Over VLTs at Tracks Heats Up, a December 2003 article from the Detroit News