Is Horse Racing Coming to Georgia? Don’t Bet on It

“And they’re OFF!”, the well-known cry of horse racetrack announcers, may not be coming to Georgia. In fact it’s more likely to be, “And IT’S off.”

Today Governor Deal stated that he is against an expansion of gambling in Georgia. Without pari-mutuel betting to raise the prize money for the races, there would likely not be a purse large enough to attract top-flight entrants to Georgia-based racing.

Despite a meeting today with members of the horse racing industry and some state lawmakers, Governor Deal is unlikely to endorse the necessary changes anytime soon. The Atlanta Journal-Constitution has the story:

Industry officials received a cool reception Thursday from Gov. Nathan Deal despite a continued push by backers to legalize gambling on horse racing in Georgia.

With lawmakers set to reconvene in January, former Breeders’ Cup board Chairman Bill Farish and Nick Nicholson, president and CEO of Kentucky’s Keeneland Association, made the visit to pitch the industry’s likely effects on Georgia’s job growth and economy. They met first with a handful of lawmakers before meeting privately with the governor.

Deal, however, told them “he wouldn’t support any effort to expand gambling in Georgia,” Deal spokesman Brian Robinson said.

His opposition is not likely to squelch the idea. State Rep. Harry Geisinger, R-Roswell, who arranged the meeting, has said the measure would bring in new revenue for popular programs — such as the state’s HOPE college scholarship program, pre-K classes and trauma care — without raising taxes.

I spoke with a source close to the study of bringing horse-racing to Georgia for some background information. This person brought forth some concerns that should be addressed, stressing that there are sufficient reasons for pause without considering moral issues.

First, the horse-racing industry does not do well without gambling in addition to pari-mutuel betting. Those venues that lack casinos-style gambling are desperate to bring it in. It seems that the draw may not be the horses, but rather the gambling itself. To get the participants to stick around and spend money, additional types of gambling may be required.

In Illinois, the racetracks are having a difficult time competing against Indiana’s “racinos” which each have 2,000 slot machines. The slot machine proceeds are used to fatten the purses offered which attract more and better race entrants.

The situation is serious enough that some believe Illinois-based horse racing is nearly finished. Former Illinois Governor Jim Edgar has a stable and is furiously lobbying the state to allow slot machines at racetracks in order to save the industry.

Second, the representatives of the horse-racing industry believe the only location in Georgia that could be successful would be the metro Atlanta area. There are valid concerns that adding “racinos” and casinos to the area would harm Atlanta’s attempts to attract international businesses to headquarter there.

This concern would go away if industry officials would consider a location in more rural areas of the state. The impact on Atlanta’s profile would vanish and one could argue that the impact of adding new jobs in rural areas would help offset the negative effect of the casinos that seem inevitable if horse racing is established. Industry officials are intent; however on an address near metro Atlanta because of fears that insufficient traffic would be generated for racetracks to be successful.

Third, there is the question of labor. Many of the promised jobs are the four A.M., low-wage, back-breaking labor that many Americans do not want. Mix in HB-87 and there may be problems, even from legal foreign residents. Kentucky’s consideration of a bill similar to HB-87 and the Arizona law, has resulted in some stables skipping races in Kentucky.

In addition, it is reported that federal immigration officials have targeted the horse racing industry to crack down on illegals.

According to my source, the horse racing industry has conducted no studies in more than five years and that there are no examples of successful locations which do not have additional gambling with the pari-mutuel betting. Most importantly, horse racing enthusiasts and industry representatives have not made the case that this move would benefit the state or the taxpayers.

The bottom line is that without casino-style gambling, horse racing in Georgia is extremely unlikely to work. Rep. Geisinger’s enthusiasm notwithstanding, successful horse racing in Georgia is unlikely to be a reality and is even more unlikely to become a positive revenue stream for the state.

::UPDATE The same Bill Farrish mentioned in the AJC story believes that the horse racing industry in Kentucky cannot survive without slot machines. In this published letter to The Paulick Report, Farrish states that Kentucky is “in danger of seeing major farms shutter their operations and move to friendlier jurisdictions” unless additional gambling is approved for their state. Read the full letter for more dire predictions from the former Chairman of the Breeders’ Cup.

23 comments

  1. Herb says:

    Horse Racing will help our economy, just like Gambling and Stripping helped Las Vegas’ economy. I’ll bet that if we had a real Governor, opponents of this measure would be called out in an emergency press conference for exacerbating our economic malaise. Just my view 25 years on.

  2. How about this… let’s legalize parimutuel betting as well as slot machines and any other gambling that goes along with it. Anyone who does not want to gamble their own money will not be forced to enter any of these facilities, much less gamble their money. I’m allowed to gamble via betting on stocks on the NYSE and NASDAQ… why not horses on the horse track? Is the Governor going to try and outlaw stock trading as well?

    • Ken says:

      David,

      I would suggest that stocks and bonds are “investments” because a person actually purchases something of value – either a part of a company or a part of a company’s debt. So, there is a difference between a purchase and a wager on an outcome of an event.

      I would be very interested in your insights into what kind of impact the location of horse racing stables in or near the metro area might have.

      • Calypso says:

        “I would be very interested in your insights into what kind of impact the location of horse racing stables in or near the metro area might have.”

        You mean besides the smell?

        • Since my other comment is awaiting moderation (I’m assuming too many links, so it got hung up), I will say that if you think smell is really that bad of a problem, I’d invite you to come out to our farm and see just how bad it smells when you actually practice correct manure management methods. 🙂

          • Calypso says:

            I was just having fun with the way Ken asked his question, …impact of the location…nothing to do with any actual concerns about smell.

            • Gotcha. I only mentioned that because there’s an ordinance in Cobb where chickens aren’t allowed unless you have 2+ acres. When small quantities of chickens are well cared for, they don’t smell. We even have our coop built onto the side of the house. Perhaps the ordinance works well for keeping large chicken houses off small parcels, but outlawing a few backyard chickens is ridiculous.

      • Ken,

        While stocks and bonds are indeed investments, you are essentially betting that the value of the company you are investing in will go up, right? At least, that’s my take on stock investing. I’d prefer for the stocks I hold to go up. Unless you hold a certain percentage of a company’s stock, you really have little to no input on the day to day running of that company.

        As far as the impact of horse racing stables in or near the metro area, it would be the same as horse stables for other types of disciplines – Three Day Eventing, Hunter / Jumper, Dressage, etc. Farms that practice proper manure management don’t really have much of a smell. We spread ours in the pastures, and I’ll be building a small compost heap in the greenhouse when I build it hopefully within the next couple of weeks.

        Anyhow, back to the impact. Take a look at Milton… it’s estimated that there are somewhere around 150 to 200 horse farms in Milton alone (and yes, the lady in the article should have been keeping her manure piles away from the property lines… not right beside them):

        http://www.ajc.com/hotjobs/content/metro/northfulton/stories/2009/04/30/horse_manure_feud.html

        There are probably a LOT more horse farms around than you realize. Just look at the current places that hold events:

        Georgia International Horse Park – http://www.georgiahorsepark.com/

        Chattahoochee Hills Eventing (8,000+ acre facility that recently hosted the 2011 USEA American Eventing Championships) – http://www.chatthillseventing.com/

        Wills Park – http://alpharetta.ga.us/index.php?p=221

        I would think that there’s already well over 1,000 horse farms of various disciplines, persuasions and sizes around the metro area. The impact of bringing in 50 to 100 more farms? Ask the local tack and feed shops. We spend a decent amount in feed from Wild Horse in Powder Springs, shavings typically from Tractor Supply in Dallas, various tack from either Wild Horse locally or Dover, Tack Exchange or Atlanta Saddlery in Alpharetta. Owning horses isn’t quite like owning a cat. Between shavings and feed, expect to spend at a very minimum $150 to $300 a month on feed and shavings for a sport horse. That’s not even including having their hooves trimmed by the farrier or vet bills or a variety of other expenses (tractor, fuel, electricity, water, hay, etc..

        Here’s a local farm in Alpharetta that has a few horses for sale… note the price ranges. 🙂
        http://fortitudefarm.webs.com/saleleasehorses.htm

        • Ken says:

          Thanks, David.

          We’ll have to disagree on the similarity between investments and gambling.

          Yeah, the prices were a little surprising. “Rocky” or “Vinnie” or a loaded SUV? All priced about the same. 🙂 Wow!

          I do appreciate your input on the horse farms and their economic impact. It’s good stuff and, as I expected. I learned from it. Thanks!

          • Anytime. We’ve got a few horses that we’ll be listing for sale fairly soon ranging from $3,500 to $35,000. I will also mention that when we were horse shopping a couple of years ago we were at a farm in Alpharetta looking at a horse advertised in the $5k range and on the other side of the barn were a Grand Prix trainer’s horses – I think the cheapest one he had for sale was $180k?

  3. Wiregrass Dawg says:

    Outstanding post Ken. Thank you for your thoughtful analysis.

    Can you help me understand the “valid concerns” of why horse racing/casinos would be a hindrance to attracting multinational corporations?

    Thanks

  4. Ken says:

    Wiregrass Dawg and others,

    I looked at this as more of a straight news story rather than an opinion piece and, for that reason, attempted to keep my personal opinion to a minimum. The opinion regarding the possible location of businesses to Atlanta was more of a reflection of people I spoke with than my own thoughts.

    I will; however, attempt to do justice to their beliefs. First, people should understand that pari-mutuel betting will not survive on its own, as reflected in Illinois and even Kentucky. Second, once casino-style gambling is brought into the state, there is a distinct possibility that it may be allowed in other venues, as well. Third, there are companies that will not wish to be associated with gambling in even a tenuous way.

    The industry that readily comes to mind would be the financial industry. Though perhaps MF Global would not mind.

    More importantly; however, is Atlanta’s image. When convincing a company to relocate, the new city’s reputation and image become a part of the company itself. If UPS had wanted to be in the city that best fit its needs as a logistics company, then geography would have dictated Memphis over Atlanta. Instead, UPS chose Atlanta over Memphis because Atlanta far surpassed Memphis in other areas. I would put forward that image and reputation played into that decision.

    I would be interested in the opinions of Atlanta Mayor Kasim Reed and the various chambers of commerce in the metro area on bringing casinos to the state. That could be informative.

  5. you says:

    Let’s Go to the Races….

    Anyone remember when Big Star grocery store gave out “tickets” to watch and maybe even win horse races on tv? Those were the days. 🙂

  6. saltycracker says:

    No problem with horses or gambling or pari-mutuel racing, the problem is another tentacle for educational money. Education gets half or more of property taxes, increased tuitions, lottery money, federal funding, donations and always needs more to pay employees & benefits and dumb down and level out the student field.

    Maybe it is time to rethink the entire process or at least allocate revenue sources into capital and operational.

    • saltycracker says:

      Not to overlook the student loan debt industry also pumping billions into education…….

      We can mortgage our kids future two ways, personal & public…..

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