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Old Kentucky Home, slots and all
Published April 27, 1998
The Kentucky Derby, the oldest continuously held major sporting event in America, may never be quite the same after this year.
Next year, thoroughbreds and mint juleps will have to compete with the Caesars’ Glory of Rome, the biggest gambling boat ever built, which will be docked across the Ohio River from Louisville, KY.
And in a few years, gamblers at Churchill Downs itself may have the choice of lining up at the betting windows or sitting down at the slot machines.
Churchill Downs has been growing its business in recent years, said Alex Waldrop, the track’s general counsel and senior vice president of government affairs. Once the riverboat opens, Churchill believes it will need the slot machines to continue that growth, he said.
"We have looked at situations where casinos have been built next to racetracks and there is going to be a negative impact," Waldrop said.
What exactly the impact will be, Waldrop said the track couldn’t predict. But it is believed the casino could cut Churchill’s wagering "handle" – all money bet on races – by 10 percent or more. Last year $132.3 million was wagered at the tack, compared with $129.5 million in 1996.
Studies of tracks that had to compete with casinos have fund that the tracks suffered double-digit percentage declines in betting revenue, with some as high as 40 percent, Waldrop said.
"We did not do this to harm Churchill Downs," said Michael Walsh, chief operating officer of Caesars Indiana, the division of Caesars World that is building the $275 million casino. He added that he has talked with Tom Meeker, president of Churchill Downs, about potential future joint marketing opportunities.
Walsh said he believes that Churchill Downs could suffer a 10 percent decrease in wagering the first year the riverboat is open. But after that, Walsh predicted that the riverboat would bring tourists to the track and the city of Louisville.
"We can make this a destination where Louisville can go form being a second-tier convention city to a first- tier convention city," Walsh said.
At least one track, Ellis Park in Henderson, KY, saw a slight increase in wagering and attendance after a riverboat casino opened nearby.
Nevertheless, officials at Churchill Downs – as well as officials at tracks in Maryland, Massachusetts and Pennsylvania – have been considering installing gaming machines to broaden their appeal to gamblers, according to a recent investment research report by the New York brokerage firm Salomon Smith Barney.
Installing slot machines at tradition-bound Churchill Downs would be a significant event for the racing industry.
"If slots at a highly visible racetrack, such as Churchill Downs in Kentucky, are approved, then acceleration of approvals in other states is possible, the Salomon Smith Barney reports said.
Waldrop said it won’t be easy politically to get approval for slot machines from the state of Kentucky, and Churchill Downs will not lobby for slot machine approval before the 2000 legislative session. By then, the impact of the riverboat casino will be clear, Waldrop said.
"By 2000, we think the case will be more easily made," he said.