Letter to Virginia Horsemen – Update from Equine Alliance Moving Forward

Dear Virginia Horsemen:

As most of you may know, the Virginia Racing Commission unanimously denied Colonial Downs’ request of 2016 race dates at their monthly meeting this past Tuesday. I’d like to address a question that’s been asked many times since the decision was rendered —  What does this mean for the both the immediate and long term future of racing in the Commonwealth?

First, a brief history. At the 2014 October meeting of the Racing Commission,  Colonial Downs’ owner, Jeff Jacobs, turned in the track’s unlimited license which allowed them to conduct live thoroughbred & standardbred racing, and operate up to ten Off Track Betting (OTB) Centers in the state. The OTB facilities closed shortly after the announcement and the New Kent facility has gone unused since. Thoroughbred racing was last held at Colonial Downs in summer of 2013 and harness racing was last held there in fall of 2014. Not only did he give up the right to run OTB’s but because there was no longer an unlimited licensee, the industry lost 3 to 4 million dollars Colonial was receiving from the out of state on line betting companies (ADW’s) that helped fund the costs of live racing in Virginia.

Shortly after Mr. Jacobs’ actions of last October, the Virginia Equine Alliance (VEA) was born so live racing could continue in Virginia. To do that, it was necessary to recapture the funds lost to live racing when he turned in his license. The VEA is comprised of four member groups — the Virginia Thoroughbred Association (VTA), Virginia Horsemen’s Benevolent & Protective Association (VAHBPA), Virginia Harness Horsemen’s Association (VHHA) and the Virginia Gold Cup. The purpose of the Alliance is to promote, sustain and expand the horse breeding and horse racing industries in the state.

The new law took effect in July and since then, the VEA has unsuccessfully attempted to lease Colonial Downs from Mr. Jacobs. The Alliance was however, able to put on seven successful events in Virginia this year and relocate eight key stakes races at Maryland’s Laurel Park as well — five Virginia-bred events and three graded stakes. The Gold Cup held flat races as part of their annual spring and fall steeplechase event days at Great Meadow in The Plains. A new event, Virginia Downs, was also held at Great Meadow in September and featured an afternoon of flat races with combined purses of $150,000. Harness racing returned to the Oak Ridge Estate in Nelson County on back-to-back weekends in October. Closing day at Oak Ridge showcased Virginia-bred and sired horses that competed in eight championship races worth a combined $350,000.

We’re proud of everything that was accomplished in 2015 despite financial obstacles faced by Colonial’s closing, and turnaround times to get first time event logistics and promotion in place. Now, we need to look to the future and address the two most underserved aspects affected by this transition — the horsemen, who require more racing opportunities to sustain their business, and the horseplayers, whose betting options both on and off track have been limited.

The key takeaway from Tuesday’s VRC meeting is that the impediment to moving the industry forward has been removed. Mr. Jacobs’ vision of racing didn’t include expanding racing opportunities. Here are the VEA’s immediate goals:

*To begin seeking a new “permanent” home for thoroughbred races – Meetings are currently taking place with management of Morven Park in Leesburg about the prospects of running thoroughbred races there on a regular basis in the future. Work will need to be done on the turf surface to ensure the safety of both horses and riders. Dates will need to be secured around many other events Morven hosts during the year. A number of additional issues will have to be addressed so realistically, we’d be looking at 2017 dates there at the earliest, assuming we clear all hurdles. The Alliance will investigate additional days at Great Meadow as well as other racing opportunities out of state for the short term.

*To seek long term permanent track(s) for standardbred races – The Oak Ridge Estate in Nelson County has already been established as a viable site to host harness races and possibly even add thoroughbred races at some point in the future. Several annual non-betting harness racing events also currently take place at the Shenandoah County Fairgrounds in Woodstock, Virginia, and meetings have already taken place with track officials there to discuss an upgrade to the track that could position it as another option for pari-mutuel races moving forward.

*To open Off Track Betting Centers in the state – As far as Off Track Betting is concerned, we are in the process of talking to three national companies that specialize in OTB development and operation. Our hope is to get the first outlet up and operating in 2016. The VEA also wants to work with local ownership scenarios in smaller communities like Nelson County (where Oak Ridge is based) where connections and contacts have already been established through years of being part of that business community. The OTBs are critical to the long term viability of racing in Virginia as they will generate additional purse and operational funds.

*To plan a schedule of both flat and standardbred races in 2016 based on several different budget scenarios –.The VEA is also working on several different scenarios for live racing events next year. Since we hosted seven different race days in 2015, we know the hard costs associated with conducting  these events and now, it’s a matter of plugging in the revenue numbers received from the account wagering services (TVG, Twin Spires & XPressBet) and seeing how many live days we can afford. Right now, proceeds from on line betting handle is the sole handle generator until we get another revenue stream from OTBs in the near future.

*To plan a new industry website & promotional strategies – Work is currently in progress to create a new all-encompassing website where the entire Virginia horse racing community can access information on upcoming events, get industry news, and learn how to make wagers on local and national races. The site will appeal to both horsemen, bettors and potential live race event attendees.

There is a lot of work to be done to grow and sustain Virginia racing, but the biggest positive aspect right now is that everyone is on the same page, at last. We want to move forward quickly but we will not be able to rebuild racing overnight — it will take time and we need to count on your patience. The next Racing Commission meeting is December 16th and we’ll provide updates on these issues I’ve addressed here to the Commissioners, who through their vote on Tuesday, reinforced a great desire to work with us and help Virginia racing get back on track and prosper.