THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Tuesday, February 18, 1997 TAG: 9702180003
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
LENGTH: 52 lines
Colonial Downs officials are galloping around the commonwealth and the country trying to convince investors to buy stock in Virginia's first pari-mutuel race track which goes on sale in March.
It's going to be a hard sell, for good reasons.
First of all, horse racing is in decline. Few tracks in the United States have remained economically viable without the infusion of cash from off-track betting parlors, slot machines and other casino-type games.
Colonial Downs has plans for six off-track betting parlors, but slot machines and other forms of gaming are not in the cards now. That will put Virginia's track at a competitive disadvantage with nearby states like West Virginia and Delaware that have gone wild with gambling.
Maryland, too, seems poised to allow slot machines, as Delaware continues to eat away at Maryland's thoroughbred-racing profits.
A second reason the race-track stock will be a hard sell is because pari-mutuel betting is an unknown quantity in Virginia. In its filing with the Securities and Exchange Commission, Colonial Downs admits: ``It is impossible to predict with any certainty the economic outlook or future of the pari-mutuel wagering industry in Virginia. There can be no guarantee that the market will be sufficient to generate enough revenue to make the company profitable.''
You can say that again.
Last, but most important, Colonial Downs has demonstrated a curious lack of enthusiasm for opening a track at all. That makes good business sense, of course, since off-track parlors - not race tracks - are racing's moneymakers. Last year, when it looked like Colonial Downs was going to procrastinate indefinitely on a track opening, the General Assembly issued what looked like an ``open or die'' deadline of July 1, 1997.
But in the current session legislators caved in to pressure from pro-gambling forces and granted Colonial Downs an opening extension until Sept. 1, to allow for possible delays in construction due to inclement weather.
All indications from Colonial Downs officials is that they will take full advantage of the extension even though this winter's weather has posed few impediments to construction. Mike Johnson, who heads the construction division for Colonial Downs, said this week that the grandstand was only one week behind schedule.
Regardless of construction efficiency, the owners have no impetus to open July 1, because an open track will simply eat into off-track betting receipts.
Virginia voters approved pari-mutuel betting in 1988. Colonial Downs stock sales will gauge whether support remains robust for this foolhardy enterprise.