DATE: Tuesday, August 26, 1997              TAG: 9708260378

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SERIES: COLONIAL DOWNS

        Post time for New Kent;s horse-racing track

SOURCE: BY HOLLY A. HEYSER, STAFF WRITER 

                                            LENGTH:   63 lines

GETTING A HANDLE ON RACE REVENUES

A piece of the action that's what you were promised in exchange for allowing parimutuel horse racing in Virginia.

It sounds sweet.

But deals that sound good now have a way of disappointing people when reality sets in. A fine example is the Virginia Lottery, which has left some people wondering, wasn't this supposed to help schools?

So let's be clear about what the public gets when someone plunks down $2 to win on No. 5 in the third race at Colonial Downs: 4 1/2 cents.

Local and state governments are fifth in line for a share of the handle, which is what horse-racing types call the money wagered on races. They - or rather, the taxpayers - get 2.25 percent.

Ahead of governments are other race tracks, which get 3 percent for transmitting their races to Virginia via simulcast; the horse industry, which gets 6.25 percent for purses and other awards, including some reserved exclusively for Virginia horses; Colonial Downs, which gets 6.5 percent for operating expenses and profits; and the winning bettors, who get 80 percent.

Not that 2.25 percent is insubstantial. With two off-track betting parlors on line since last year and the New Kent track not even open yet, state and local governments already have reaped $2.1 million. Chesapeake's share last year was $156,000, equivalent to pay and benefits for nearly five police officers.

But compare that to the state lottery, which put $343 million in state coffers last year. That's about 4 percent of Virginia's general fund budget.

Horse racing is different from the lottery in other respects as well:

The lottery gives far less back to players in winnings - 50 percent to 55 percent of the money gambled.

It gives far more to the state - 34 percent to 37 percent.

While revenues from Colonial Downs aren't earmarked for anything in particular beyond the Virginia Racing Commission's $1 million annual budget, the lottery earmarks its proceeds for K-12 schools.

That can be deceptive, though. Virginia law dictates that the revenues must be spent on schools, but not that it should result in a net increase of spending. In other words, lottery money can go into the education pot and an equal amount can come out the other side and go into other state-funded programs.

That's not the message a lot of voters remember hearing.

``I voted for the lottery, but I thought the money was going to be used for education,'' lamented Hampton resident Patricia Boehme at a citizen forum last month at the Virginia Air and Space Center.

Lottery spokesman Ed Scarborough admits that there's little increase in K-12 spending that's attributable directly to the lottery. ``We never said there would be,'' he said.

Colonial Downs officials aren't saying that either. But when they're trying to convince communities to allow off-track betting centers, they're not averse to suggesting that schools and communities could benefit. ILLUSTRATION: GRAPHIC

THE HANDLE

SOURCE: Colonial Downs

[For a copy of the graphic, see microfilm for this date.]

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