Wednesday, June 19, 2024

Colonial Downs Threatens to Close Unless State Regulators Agree to Deal


colonial-downs-logoThe owner of New Kent County racetrack Colonial Downs has threatened to close the track and its eight off-track betting locations unless state regulators in the Virginia Racing Commission agree to a deal calling for fewer racing days and a new horsemen’s association.

Without a deal in place with a horsemen’s association, state law prohibits the track from conducting thoroughbred racing or accepting bets on national thoroughbred races at its OTBs.

After almost a year of failed negotiations with the existing horsemen’s group, the Virginia Horsemen’s Benevolent and Protective Association, the track’s owner has announced the formation of a new group and proposed a 20-day race season for 2015.

The debate between VHBPA and Colonial Downs goes back to the length of the season: Colonial Downs wants a shorter season to cut down on costs and maximize the purse money at each race, while the horsemen want more racing days to have a chance to participate in more races and recoup the costs associated with training a horse.

To bypass the VHBPA, Colonial Downs announced the Old Dominion Thoroughbred Horsemen’s Association, a group currently being formed, according to a news release from the track.

Jacobs said in the release he wants to focus on “several high quality days of nationally ranked races involving some of the top trainers, jockeys and horses in America.”

“Our former horsemen’s group wanted to see our purse money spread out over more days of lower quality racing, and they did not want to compensate us for losses incurred by opening up the stables and backstretch for them all summer long,” he said.

The disagreement with VHBPA has cost the track hundreds of thousands of dollars per month, according to the news release. In July, Colonial Downs President Ian Stewart said the lack of racing and betting at the OTBs has cost the track $2 million in revenue. Stewart did not return a call for comment Monday.

The matter is now in the hands of the racing commission, which will next meet at 10 a.m. Oct. 15.

Frank Petramalo Jr., VHBPA’s executive director, said if VRC approves the contract with the new horsemen’s group, his group would be in court “the next day.”

“Their only response instead of negotiating was to set up a new in-house organization which is a sham, and it basically dictated the terms of the contract and had the sham organization sign it,” he said. “That’s illegal.”

Because Colonial Downs is the only track in Virginia where betting on thoroughbred racing on a flat track is permitted, the horsemen have gone to other states to compete. The only thoroughbred horse racing allowed is the steeplechase, which requires the jockey to maneuver the horse around obstacles.

Should the track close down, all thoroughbred race betting would be suspended due to provisions in state law. The eight OTBs, two of which are in Hampton Roads, would also close. Colonial Downs, which opened in 1997, last hosted a thoroughbred flat track race in 2013. That year featured 25 race days, down from the 30 to 45 race days the track has featured in previous years.

New Kent County Administrator Rodney Hathaway said the loss of the 2014 season has cost his county about $400,000 in lost tax revenue. He said a permanent closure would represent a “significant impact” to the county’s economy.

Hathaway said the track is a major component in the county’s tourism industry, which is the largest industry in New Kent County. The permanent closure of Colonial Downs would harm restaurants and gas stations that derive revenue from people visiting the county to go to the track. Farmers, horse breeders and horse boarders in the county would also be adversely affected.

“It would definitely have an impact on our brand as being a place to visit,” Hathaway said of a permanent closure, noting the track is one of the 10 largest employers in the county.

The announcement from Colonial Downs regarding the looming closure is the latest step in a lengthy back-and-forth between the track, regulators and VHBPA.

After the track and the horsemen were unable to agree by the end of January on a contract for the 2014 racing season, betting was paused at four of the eight OTBs. The four OTBs that remained open are only accepting wagers on standardbred races.

Negotiations continued through the spring. By May, the track announced it was suspending negotiations with VHPBA. Jacobs then offered a $2 million interest-free loan to help formulate a new horsemen’s group with an eye on salvaging the 2014 season, however that did not come to fruition in time for racing this summer.

VRC then instructed the track to accept a 2015 schedule of 25 race days across eight weeks. The track responded by appealing the ultimatum to Richmond Circuit Court. A hearing has not yet been scheduled in that case.

Millions of dollars have been lost by the track and VHBPA due to the shutdown. Along with revenue made at the track, state law requires the track to share some of the proceeds of the OTBs with horsemen across the state.

VHBPA represents about 1,300 horsemen and jockeys in Virginia.

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