Suffolk Downs Committed to Horse Racing

May 20, 2014
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Suffolk Downs is on the road and working its hardest to reassure the horse racing community that – despite recent news about a so-called wavering commitment to racing – they are still all in at that track. News broke last week concerning a letter sent to the Massachusetts Gaming Commission (MGC) from Suffolk Downs on April 30 within the context of the fight with Boston on Host Community Status – a fight that was resolved nearly two weeks ago. In that letter, the track officials said they would discontinue racing if it were to get in the way of a casino license.

It’s a letter that has now raised legitimate questions, but questions that track officials say are being answered without context. Now, those same officials are talking with numerous racing industry partners to let them know they are solid in their commitment.

“We are embarking on a very aggressive communications campaign to reassure our stakeholders that our commitment to racing is steadfast,” said Suffolk COO Chip Tuttle on Tuesday. “It’s unfortunate that some media outlets have presented the letter in a way that makes it feel fresh when in fact it is past tense because it was offered in the context of a host community discussion that has already been settled. Clearly, Revere is the only host community for Mohegan Sun’s development.”

That campaign has included a visit to the Horsemen’s Benevolent and Protective Association (HBPA), an organization of horse owners and trainers that has a longstanding relationship with the track.

Naturally, the contents of the letter did worry some in the HBPA. A request for comment was not immediately returned.

The letter, in summary, indicated that if Boston’s push for host community status – hinging upon the use of the horse track – would endanger the casino license, then Suffolk would discontinue racing.

“We thought it would be appropriate to note the necessary corollary to our pledge to continue racing – if, by continuing to race, Suffolk Downs would invalidate or jeopardize Mohegan Sun’s application or gaming license, we would not do it,” read the letter by Suffolk Corporate Secretary Charles Baker III.

“While we remain committed to racing as outlined in our January letter, we want to make it clear that we would discontinue racing operations in the event that racing at Suffolk Downs would be considered a legal impediment to Mohegan Sun’s Revere-only gaming license application,” it continued.

Those were strong words, and media outlets immediately questioned the intent, as Suffolk has always said it will continue racing.

Tuttle said that one should keep in mind that the letter refers consistently to the track’s 15-year commitment to racing. That, he said, has not changed and that maybe some negotiating tactics could have been misconstrued.

However, MGC officials also were concerned about a provision in the land lease agreement between Suffolk and Mohegan Sun that was inked in late 2013.

That provision indicated that the landlord (Suffolk) was not obligated to continue racing if the casino license were granted.

“Landlord shall not be obligated to continue, maintain or operate the Race Track. If Landlord elects to continue the Race Track use, it may (but shall not be obligated to) elect to require Tenant to operate the Race Track (to the extent not prohibited by the License or applicable law and subject to Tenant being reasonably satisfied with the form and substance of the existing horsemen’s agreement then in effect, to the extent it has not been previously approved by Tenant), pursuant to a commercially reasonable management agreement negotiated by the parties in good faith, which shall provide that Tenant be responsible for all costs and expenses and any operating losses, and shall retain all revenues, attributable to operating the Race Track, and that Landlord shall not be obligated to pay any management fees or other amounts to Tenant for managing the Race Track,” read the stipulation.

Tuttle said there were many thoughts put into that stipulation in the confidential land lease agreement – which has now been stricken voluntarily by Suffolk as a show of good faith to the MGC.

One of the reasons was to give Suffolk options to let Mohegan Sun run the track if Suffolk Downs was unable to make it work. Mohegan Sun does operate a horse track at its Pennsylvania property.

“Mohegan Sun has done a great job with Pocono Downs in northeastern Pennsylvania and, back in December when we were negotiating the terms of the lease, our owners thought it was a reasonable option to be able to ask Mohegan Sun to bring that expertise to bear here,” said Tuttle. “The [April 30] letter let the Commission know that clause was no longer in effect. We can’t ask Mohegan Sun to manage the track — the racing and gaming operations must be separate.”

Tuttle said the message in their campaign to reassure racing stakeholders is one that preaches that the commitment to racing is still solid.

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