September 1, 2013

Subsidies for Maine horsemen shrink this summer

The Associated Press

PORTLAND — Slot machines have helped Maine's harness-racing industry by funneling millions of dollars to horsemen, breeders and tracks. But declining slot machine revenue at Bangor's Hollywood Casino and other factors, including fewer spectators, have led to a double-digit drop in purses this year.

Jay Burns of Topsham, who co-owns a racing horse, said he was shocked last spring to learn that a race that once paid $4,000 would now pay $3,500, and that's been the trend all summer.

"There's no way to make up the money," he said, pointing to his fixed costs of food, supplements, veterinary care, trainer, driver, stable and transportation costs.

Casino funding available for purses through the end of July was down 22.5 percent from the previous year, corresponding to a drop in slot revenue at the Hollywood Casino, according to Henry Jackson, executive director of the Maine Harness Racing Commission. That led to a 15 percent cut in purses, he said.

Industry officials say the opening of Oxford Casino siphoned away customers and revenue from Hollywood Casino. But there are other factors at play. Different contribution formulas for the two casinos, fewer spectators placing bets at tracks, unregulated online gambling and a weak economy are taking a toll, officials say.

It all makes for an uneasy feeling in the industry.

Mike Graffam, a horse farm owner in Falmouth, said he can't help but be concerned for the industry's long-term outlook when he sees a decline in spectators at tracks.

"It's sad to go to the races and not have the public there like we used to," said Graffam, who owns a 52-acre farm and bales hay on 100 more acres. "I almost feel like a dying breed."

Slot machines at the Bangor casino, which opened in 2005, were supposed to give a boost to harness racing and they've done just that with subsidies currently accounting for 80 percent of purses, officials say. Subsidies also go to breeders, track operators and off-track betting parlors.

Harness racing perseveres, with about 1,400 horses available for racing in Maine and 300 others used for breeding. Racing continues at two commercial tracks and at local fairs.

But there's been a dramatic change since the opening of Oxford Casino, which cut into Hollywood Casino's revenue but provides far less subsidies to horsemen and race tracks. The introduction of table games at Hollywood Casino further cut into slot revenues, but none of the table game income goes to the racing industry.

Of its gross slots revenue, Hollywood Casino is required to donate 10 percent to live-racing purses, 4 percent to harness-racing tracks, 3 percent to breeders, 3 percent to agricultural fairs and 1 percent to off-track betting parlors. Oxford Casino provides just 1 percent each to breeders, purses and agriculture fairs and nothing to commercial tracks.

"What we picked up from Oxford in new money won't fill the hole from the money that was lost from Bangor from the decline in revenue," said Don Marean, a state lawmaker and horse farm owner in Hollis.

Ed MacColl, an attorney for Scarborough Downs owner Sharon Terry, said the harness-racing track in southern Maine is being choked by the larger casinos.

"The largest gaming businesses in Maine used to be these racetracks. They were owned locally by people who'd been here a long time. They were neatly woven into the fabric of our fairs and the agriculture part of our economy. We're just replacing that with casinos that are owned by publicly traded, out-of-state mega firms," he said, pointing to out-of-state ownership of the two casinos in Oxford and Bangor.

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