Churchill Downs Inc. Hopes to End Racing at Calder

Horsemen note that such a move would cost some $10 million in purse money.

Florida industry groups have lined up to oppose a plan by Churchill Downs Inc. to end Thoroughbred racing at its Calder property, a move that could cost horsemen about $10 million a year in purses generated by slot machines at Calder Casino.

In February, CDI was awarded a pari-mutuel jai alai license from Florida’s Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering. With that approval, CDI currently holds pari-mutuel licenses for both jai alai and Thoroughbred racing at Calder, but the latter will expire in 2020.

In documents submitted to the DPMW, CDI said it wishes to switch from racing to jai alai, a move that would reduce its expenses associated with statutory purse fund requirements. On July 31, Calder submitted an email to the DPMW requesting a declaratory statement from the regulator about whether the switch would jeopardize its casino license.

Under state law, the casinos at Gulfstream Park and Calder both pay into a single Thoroughbred purse fund, a commitment of 10% of their slot machine revenues. Even though Gulfstream owner The Stronach Group has taken over racing operations at the former Calder Race Course property—now run as Gulfstream Park West—the Calder casino generates revenues for purses and breeder awards all year. The Florida Horsemen’s Benevolent and Protective Association estimates revenue from the Calder casino committed to the purse fund will reach $9 million-$10 million this year.

The Florida HBPA has filed motions with the DPMW opposing CDI’s plans to change the Calder pari-mutuel license from Thoroughbred racing to jai alai. Late Aug. 23 in a joint release, Gulfstream Park, the Florida Thoroughbred Breeders’ and Owners’ Association, and the Ocala Breeders’ Sales Company each expressed opposition to CDI ending racing in favor of jai alai.

The Florida FTBOA noted that voters approved casino gaming at Calder with the understanding that it would support Thoroughbred racing. It said that support has allowed CDI to successfully operate slot machines at its Calder property since 2010.

“Now, Churchill Downs apparently sees the opportunity to pull a ‘bait-and-switch’ in the interests of increasing its profits, with little regard for the economic harm its moves will cause to the faithful Florida trainers, owners, and breeders that have long supported its racing program, as well as the other Florida tracks and participants in Florida’s Thoroughbred industry,” the FTBOA noted.

Calder officials believe that under the language of the state law, a move from racing to jai alai should be allowed. Under the company’s interpretation, it’s not a high bar to clear for such a switch. It said the law only requires the property be located in Miami-Dade County, existed at the time added gaming was adopted, and conducted live racing in the calendar years 2002-03—all standards Calder meets. If the DPMW agrees with the company’s assessment, Calder plans to offer summer jai alai and discontinue Thoroughbred operations.

The Florida HBPA noted that following the 2004 state-wide vote that allowed slot machines at Calder and six other pari-mutuel facilities in Miami-Dade and Broward counties, the legislature recognized the “importance of protecting and promoting Florida’s Thoroughbred racing industry against the possibility that Calder and Gulfstream Park, the state’s two Thoroughbred tracks eligible for slot machine gaming, would abandon their Thoroughbred racing activities and instead offer patrons slot machine gaming only.”

In a filing with the DPMW, the Florida HBPA noted that in 2004 it committed $1 million to Calder to help campaign for the approval of slot machine gaming at tracks. It also outlined the far greater interest in Thoroughbred racing, as opposed to jai alai.

“The division knew, or should have known, that the substantial interests of FHBPA and its members would be or would likely be adversely affected,” the FHBPA argued.

In the release, Florida industry groups said if Calder is allowed to abandon Thoroughbred racing, the negative impact will be significant.

“It is extremely disappointing to watch Churchill Downs continue its effort to extricate itself from the racing business in Florida while adding millions more to its bottom line in slot revenue,” OBS officials said, before referencing the elimination of the grandstand and barns on the Calder property. “Calder’s Florida mission is illustrated by its past performances, which include bulldozing over half of the barn area, taking a wrecking ball to the grandstand, and supporting decoupling. Its latest attempt to exit racing via jai alai is a backdoor effort to continue operating slots and reopen its card room without horse racing. If Churchill gets its wish, the implications will stretch far beyond the Florida borders, and ripple effects will be felt nationwide in the sales ring, on the racetrack, and in the breeding shed.”

Decoupling is a proposal being debated that, if adopted, would allow operators to cease pari-mutuel wagering but retain their casino license.

In terms of casino operations, Gulfstream noted that if Calder eliminates its commitments to racing, that reduction in expenses will provide its casino a competitive advantage in the South Florida area. It also said Thoroughbred racing and breeding in the state would be hurt.

“We are obviously worried about the unlevel playing field and advantage Calder would have, along with the loss of breeders’ awards and purse money that has helped grow the industry,” Gulfstream officials said. “The ability just to change the use of a license after being granted slots under a different license would undermine all the growth we have achieved.”

On Aug. 24, a CDI spokesperson declined to comment on the Florida industry release.

Calder began advertising a part-time position on the company website and on LinkedIn for a jai alai player manager/trainer Aug. 6 and a position Aug. 9 for a cesta and pelota maker. A cesta is the basket a jai alai player wears on his or her hand to throw and catch the ball, and the pelota is the ball.

Since 2014, The Stronach Group has run the racing operations at Calder, which races as Gulfstream Park West. According to the DPMW, in fiscal year 2016-17, Gulfstream Park West offered 37 race dates and 346 races, with total purses of $7,593,910.