7-24-09

BY JOHN BROKOPP (Chicago Sun Times)

Now that the way has been paved to legalize slot machines at racetracks in Ohio to help cover the state's huge budget deficit, the time was never better for the Illinois legislature to readdress the issue here at home.

According to the 2009 "State of the States" report, a survey of casino entertainment compiled by the American Gaming Association, the racetrack casino sector of business continued to grow last year. Three new "racinos" opened in 2008, including two in Indiana (Anderson and Shelbyville). Ohio will become the 13th state to allow pari-mutuel wagering on horse racing and casino-style gambling under one roof.

The trend is gaining in popularity not only to create new revenue flow in cash-strapped states, but also to give racetracks a chance to survive.

It is a strange turn of events for horse racing, which once upon a time in the United States held a virtual monopoly on legalized gambling. Casino gambling outside of the state of Nevada existed only in the shadows of American life. Dice, cards and slots wallowed in dark, smoke-filled back rooms and were little match for the green grass, color and sunshine of horse racing. The sport, however, proved easy prey for the flamboyant world of state-sanctioned casinos, which won over gamblers in the '90s with bright, colorful, modern facilities and aggressive marketing strategies.

Illinois' most successful casino operations are already subsidizing horse racing with a state-mandated 3 percent surcharge on their adjusted gross revenues. Instead of forcing the casinos to support the racetracks, both industries seem to be better served when their respective strengths are combined.

The success of racino operations doesn't necessarily translate into increased interest in horse racing, but the revenues that are generated support horse racing programs that have been battered by competition from the gaming industry.

Thoroughbred tracks Arlington Park and Hawthorne, in combination with harness tracks Maywood Park and Balmoral Park would be formidable racino operations capable of attracting customers from a broad geographic area. The facilities are already state-regulated, plus there is an abundance of under-used space.

Illinois is set to become the seventh state to permit video gaming outside of casinos by introducing video poker machines to thousands of restaurants, bars and lounges around the state. Expansion into the racino sector would provide yet another revenue stream and be the logical next step.