Sue Austin remembers the heyday of horse racing in Montana: it was 1987, when 12 tracks across the state hosted 131 days of racing each year. Those days have come and gone, and since then, Austin, who serves as chairperson of the Montana State Board of Horse Racing, has watched one track after another bite the dust. By 1989, six tracks had closed, leaving only 88 days of racing as increasing competition from casino and online gambling cut into track profits. Counties unwilling to subsidize the tracks slowly stopped asking the Board of Horse Racing for racing days.
Today there are only five tracks left in Montana—one each in Kalispell, Miles City, Missoula, Great Falls and Billings. They operated for a combined total of 40 days last year. Now the track in Austin’s hometown of Kalispell, which has held races for 103 years, may close as well, taking with it five more racing days off the calendar, and possibly closing the door on the future of Montana horse racing.
“I feel really deeply about horse racing,” Austin says. “I don’t want to lose it, but I don’t know what to do.”
Flathead County is facing the same problem that’s beset horse racing in the state for two decades. The county pays labor costs associated with the races, which are held at the county fairgrounds during the Northwest Montana Fair, while the state puts up money for “purses”—cash divided among winning horses’ owners. Last year, Flathead County spent $97,000 on horse racing, and got $61,000 back in betting revenues, leaving a $36,000 shortfall. The deficit is expected to be the same this year, according to the Flathead County auditor. The county has never profited from horse racing.
Flathead County Commissioner Joe Brenneman says he doesn’t really want to see racing go, and that if anyone can find a way to stop the financial bleeding he’s ready to listen. Each year, the county must ask the Board of Horse Racing for the number of racing days it wants to host. Brenneman expects that next week he and his fellow commissioners will vote not to ask the board for any racing days in 2006.
Austin worries that as the number of tracks and racings days in the state declines, horse racing at large in the state will increasingly fall into jeopardy.
According to Austin, who has raced horses, it takes 90 days to train a horse for a race, and costs about $25 each training day. With fewer racing days, she says, horse owners have a harder time earning a return on that money. And the harder it is to make money, the less likely trainers will be to even bother, she says.
Oddly enough, Austin says, despite declining revenues, horse races are enjoying the same popularity among spectators as always. Gerald Scott, manager of the Flathead County Fairgrounds, confirms that his bleachers are as full as they’ve always been, although no official headcount has ever been taken (race spectators pay one inclusive admission price at the gate to enter the Northwest Montana Fair).
So why is the track losing money?
According to Austin, it’s partly because the races aren’t taking in enough “handle” anymore.
Handle is a horse-racing term denoting the amount of cash passing through the betting windows as spectators bet on the ponies. In other words, people are betting on horses less. Austin says that horse racing began to slowly lose ground to other forms of gambling, such as video gambling machines, which were legalized by the state legislature in 1985.
“There’s only so many gambling dollars,” Austin says.
Video gambling has certainly been gobbling up an ever-increasing share, with gross income tax revenues collected from gambling machine vendors by the state more than doubling from 1992 to 2005, from $161 million to $355 million.
But while Austin believes that other forms of gambling have dealt a serious blow to horse racing, she says it was the Internet and online gambling that brought it to its knees.
The state takes a percentage of the handle when national horse racing events, such as the Kentucky Derby, are simulcast and wagered on at Sawbuck Casino in Flathead County, and gives it back to the county for purses. As Austin puts it, “This race track gets a piece of that action.”
But as it’s become possible to bet on far-flung races via Internet, many bettors found they preferred to wager from the comfort of their own homes rather than at the track or their local casino.
“We get no piece of that,” Austin says of Internet betting. As simulcast revenues decrease, the amount of money the state can contribute for purses decreases, making Montana races less attractive to horse owners.
Regardless, Austin doesn’t believe that handle is the only way to measure the financial success of the racetrack, referring to the number of people who come to the track during the annual county fair to pack the stands for five days of racing.
Horse racing gets no credit for parking spots sold to fairgoers, many of whom come for the races, Austin points out. Racing doesn’t get credit for people paying their entry fees to the fair, or for their burgers, sodas, nachos and other concessions, either.
Both Austin and Scott agree that if the county would figure some percentage of concessions, gate admission and parking into horse racing’s revenue equation, revenues would look better.
Furthermore, by abandoning racing, Scott and Austin say, the county will lose one of the county fair’s major attractions, hurting fair revenues rather than boosting them.
To save the races statewide, some members the state Board of Horse Racing have discussed holding a 30-day “super meet”—30 straight days of racing held at one site.
But Austin says she’s not convinced there will be enough interest to support such a concentrated spurt of racing.
Instead, she proposes the state government chip in a little more money toward purses.
While the cost of training horses has increased over the years, Austin says purses have remained about the same, with an average of about $1,700 now being split between the top five racers at any particular race. Larger purses, Austin says, will continue to attract racehorse owners to Montana tracks.
Asked why non-racing taxpayers should care about horse racing enough to chip in, Austin is at a momentary loss for words, staring down the dirt track where horses have raced for more than 100 years.
“I believe that it’s part of our Montana tradition,” she finally says. But unless Austin can convert Flathead County commissioners to the cause, it may not be for long.