Purse reductions could be a harbinger of things to come

August 18, 2010
By

By John Lynds
For the Journal

Suffolk Downs ownership was not kidding when they said they needed casino gaming to sure up its dwindling thoroughbred industry. The famed racetrack’s ownership is trying to force powerful state leaders to go all in on gaming in the state.

With the state’s gaming bill in limbo due to political head-butting between Speaker of the House Robert DeLeo and Governor Deval Patrick, Suffolk Downs announced it will reduce its average daily purse distribution by 26 percent for the second half of its 2010 racing season to achieve a 13 percent reduction in purses for the meet, bringing purse distribution in line with statutory minimums, track officials announced this week.

While Suffolk Downs has said all along that it would have to make tough choices in the very near future if casino gaming did not become a reality in Massachusetts, the timing of the cut to the purses has some wondering if this a move to force DeLeo to wrangle members in the House and make a plea to the Senate to come back in session to get at least part of a casino bill up and running.

The track is in DeLeo’s backyard and it would be his constituents that would lose in a political stalemate on gaming that might result in the closure of Suffolk Downs and Wonderland and the loss of thousands of jobs.

The track’s announcement that they are serious about beginning to roll back purses and may consider job layoffs might have DeLeo reconsidering his tough stance against Patrick’s amendment to the House and Senate’s joint bill that calls for ‘no’ racinos in the state.

A few weeks back DeLeo wanted four, came down to two but could not convince the governor to accept his offer. Both Patrick and the Senate’s version of the state gaming bill called for no racinos in the state.

After much debate Patrick came up from no racinos in the state to one. However, DeLeo refused to come down from his push to get two racinos in the state.

Time ran out on the bill and now legislatures are unsure if they can convince members to come back into session to take up another debate on the bill.

In the meantime, Suffolk Downs is dealing state lawmakers a tough hand.

The purse reduction will bring the daily purse level for the last 50 days of the 100-day live racing meet from the current average of $89,000 per day to an average of $66,000 per day, saving the track over $1 million for the remainder of the season. Suffolk Downs expects to generate approximately $8 million in purses this season based on contributions to purses from handle mandated by Massachusetts’ statute.

“Ownership has invested several million dollars over the last few years in an effort to support local horsemen and enhance our racing product,” said Suffolk Downs’ Chairman Bill Mulrow. “As economic and business conditions worsen, we are faced with difficult decisions as we strive to preserve our current workforce. We understand that this reduction will cause difficulty for the horsemen and horsewomen who have supported our racing program and we appreciate their perseverance.”

Al Balestra, president of the New England Horsemen’s Benevolent and Protective Association said the reduction will have a significant negative.

“This will be a significant and negative impact for our more than 800 members as we strive to preserve the thoroughbred racing and breeding industry in New England and all the related agri-business and economic benefits it provides,” said Balestra. “It will clearly cost jobs on the Suffolk Downs’ backstretch and at Massachusetts farms and suppliers and my concern is that this will force more of our members to leave here to race in Pennsylvania, Delaware, New York, West Virginia and other states that have the benefit of expanded gaming at their racetracks.”

For each of the last three years, track ownership has paid purses well above the minimum required by Massachusetts’ law as part of its commitment to live racing.

Suffolk Downs paid $10.9 million in purses in 2006. New ownership increased purses to $12.1 million in 2007 and $11.9 million in 2008. A reduction last year brought 2009 purses down to $9.8 million.

Even with the reduction, Suffolk Downs expects to operate at a substantial deficit in 2010 and management is looking at additional cost-saving measures, officials indicated.

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