Would Georgia horse racing put state on track for riches or road to ruin?

MARION COUNTY, Fla. – The Sunday choir sings a familiar refrain about horse racing and pari-mutuel betting and the evil it will bring to Georgia.

Gambling and betting on racing will bring more pathological gambling addiction and threaten families.

The opponents of horse racing and pari-mutuel betting, which include the Georgia Baptist Convention and its 1.3 million members, sing the loudest that race tracks in Georgia will eventually give way to slot machines and gaming tables inside the race track, and addiction and broken families will follow.

Dean Reeves and his wife Patti, who are active members of Gwinnett Church in Sugar Hill, reject the caricature of racing as merely something else injecting turmoil into society.

Reeves, who is the president of the Georgia Horse Racing Coalition, looked out over his farm’s race track here last Saturday morning at two colts racing head-to-head in a workout, and clearly has a different view from his pew.

For miles and miles around Reeves’150-acre spread, the equine industry seems a worthwhile obsession. Barns and paddocks and black-painted horizontal fencing are over every rise in the road. Moss hangs from trees, and horses graze, or romp, or train on the idyllic, picturesque farms.

“We have to weigh the benefits against any potential drawbacks,” said Reeves, who lives in Suwanee and owns Mucho Macho Man, a celebrated thoroughbred. “The fact that we would have horse racing in Georgia creates an industry and that industry itself creates a tremendous amount of jobs and these are blue collar jobs that are always needed. And to me, that’s something that reaches the entire state; it’s not just a benefit for city of Atlanta.”

Last week, a constitutional amendment asking Georgia voters to legalize pari-mutuel betting on horse racing cleared the Senate Regulated Industries and Utilities Committee. An “enabling” bill, SB 212, accompanied the constitutional amendment and calls for the construction of up to five horse racing tracks in Georgia.

Both are sponsored by the powerful chair of the gatekeeping Senate Rules Committee, Chickamauga Republican Jeff Mullis.

Reeves said he expects a floor vote soon on the amendment and SB 212, the “Harry Geisinger Rural Georgia Jobs and Growth Act”  named after a late pro-racing legislator. The bill does not include a provision for slot machines or table gaming at the tracks when they are built.

Huge Florida economic impact

The impact of the equine industry on Florida is immense and for years SB 212 supporters say Georgia can benefit the same way economically. Thoroughbred sales in Florida annually are about $156 million, according to a 2017 study by Florida Thoroughbred Breeders’ and Owners’ Association. There are 100,000 thoroughbreds in the state and the direct thoroughbred industry impact is $1.5 billion, according to the trade group. The industry says there are 23,000 jobs in the state related to thoroughbred racing.

The jobs include hot walkers, grooms, jockeys, fence installers, barn painters, veterinarians, blacksmiths, leather smiths, feed and hay dealers, tack repair, horse transport trucks, maintenance workers, and the list goes on.

“Don’t forget the taco lady selling out of the truck to the workers at the barns,” said Ty Springer, the general manager of the Ocala Breeders’ Sales Company and its feed and supply division. “It’s a long list of jobs associated with this industry.”

Indeed, this area of north central Florida is teeming with working horse farms, but it is not just thoroughbreds inside stalls and paddocks that demand human help. Sport horses used for show jumping and a variety of other breeds are raised here and that has fueled a whole other industry.

The I-75 corridor, Springer said, is a spine running north through lands filled with limestone and calcium-rich minerals that has attracted horse breeders of all types here since the mid-1950s. The grass produced by that soil, and its bone-building qualities, are why $16 million of horses will be sold this month at the Ocala Breeders’ Sale.

Can Georgia build off that base and duplicate what Florida has done? Backers of SB 212 say the state’s moderate climate is ideal, the pastureland is available, and the state has a prominent agriculture industry to partner with.

A Georgia Southern University study found that building three tracks around the state will generate an economic impact of $1.28 billion and bring more than 8,500 new jobs.

The University of Georgia Cooperative Extension office, which studies agriculture in the state, among other industries, said there are 74,000 horses in the state and the breeding and care of the horses has an economic impact of $750 million each year.

Even if these figures are somewhat inflated, as these pro-industry economic impact studies can be, that is a lot of money.

Big dreams for Georgia horse business

Reeves said there would be two short “meets”, one in the spring and one in the fall and they usually last 20 to 30 days. Corporate sponsorships for large stakes races could create incentives for horse owners coming in from out-of-state to compete for big purses, he said. Certainly, there are large corporations in Atlanta—Coca-Cola, UPS, Home Depot, among others—that might buy in to the idea of horse racing.

“A track would give a unique opportunity for corporations to have outings for customers and employees,” Reeves said. “What could be better than bringing a group to the Coca-Cola Classic, which might be a million-dollar race, and the advertising they would get from it.”

Reeves said the vision is for a $350 million facility that is more than a race track. It is going to be hotels, restaurants, and special events, even steeplechase. If anything, the Georgia horse industry and the backers of SB 212 are not dreaming big enough when it comes to horses, he says.

Ten miles west of downtown Ocala is “WEC”, the World Equestrian Center, a colossus of a venue for sport horses (jumping, dressage). The 378-acre complex is the largest equestrian center in the U.S. There are five indoor arenas, a stadium, an outdoor arena, and 23 barns.

There is also an upscale hotel, where rooms are filled during meets at $350 to $450 per night. The facility also features two Expo centers and numerous shops. Springer of OBS said wealthy people from the Middle East fly in routinely.

It all seems grand, except to horse racing and pari-mutuel opponents who insist gambling addictions will follow.

The supporters of pari-mutuel betting are mystified by the opposition because they feel the issue of whether or not to allow gambling in Georgia was settled in 1992 when the state’s popular lottery was approved to help fund education.

“You have to ask yourself what is there about pari-mutuel betting that really is different than the lottery,” Reeves said. “People are pouring money into the lottery, which goes to education, and people seem to be OK with that.”

Betting on the machines

It used to be that large crowds at race tracks and the fans betting at windows, as well as sponsor dollars, could fund the million-dollar purses to attract the owners of the top thoroughbreds in the country. But as racing popularity has fallen off the last 20 years, the machine wagering throughout the grandstand area has helped boost the purses at race tracks around the country.

The term “Racino” is used to talk about the hybrid business of horse racing and casino-style betting parlors.

One of those casino games is Historical Horse Racing (HHR), an electronic gambling machine used at race tracks in eight states. HHR allows players to bet on 60,000 races that have already run in the U.S. The horse names and jockeys and track are not shown in the video playback, but players get a skill sheet to help them “handicap” the races and make bets. Opponents of the machines claim they are just another version of the slot machine.

“It’s not the same as the slot machines at a casino,” Reeves said of historical racing. “It’s more of a game.

“And if you go into a track and take your chances on a historical horse racing game, then I don’t see where that’s a larger issue than it would be if somebody’s doing a scratch off at the local 7-Eleven.”

There has been a bitter fight the last two years in Kentucky between the Kentucky Thoroughbred Association and the Family Foundation over HHR terminals. In the last nine years, the thoroughbred industry has received $717 million from HHR, according to the Louisville Courier-Journal.

Opponents were worried about the spread of gambling in the state because the gaming was so lucrative, so the Family Foundation sued saying Historical Horse Racing terminals are not the same as pari-mutuel betting, which was allowed by the state.

The Kentucky Supreme Court ruled in favor of the Family Foundation, so the legislature went back and re-wrote the law allowing HHR terminals alongside pari-mutuel betting.

Pennsylvania legalized gambling in 2004, which first included just slot machines. The state then created the Race Horse Development Fund to help fund purses for major races, race track marketing, and drug testing of horses. The revenue from slots flowed toward the horse racing industry.

In 2010, the state expanded from slots to table games. The money poured in and the Race Horse Development Fund was soon getting $240 million a year from gambling. Critics charged statewide gambling was propping up a sagging industry that does not have enough race track fans and pari-mutuel bettors to support itself.

Education Voters of Pennsylvania, a lobbying group, studied horse racing in the state and found $3 billion of subsidies have flowed to the equine industry since 2004, which was money from legalized gambling at tracks and other venues around the state. The group says half of the purse money goes to wealthy horse owners who live out of state, and not enough goes to fund state education initiatives.

Slot machines not on the table

Reeves said the proponents of SB 212 are not asking for slot machines, or gaming tables, at their tracks to help the horse racing industry. He also said the threat of “Racino” is overblown.

“It’s not been the big issue that people think it is,” he said. “It has worked well in Kentucky and it’s not that it has spread like a wildfire and gone through the entire state and there are historical racing machines all over the state.”

They might not be all over the state, but HHRs are expanding. The iconic thoroughbred race track Churchill Downs said it will open a 43,000-square-foot historical racing machine entertainment venue in downtown Louisville. It will feature 500 historical horse racing machines, along with an open-air gaming area.

It is exactly what opponents of Georgia’s SB 212 fear, a slippery slope to widespread gambling in the state.

But will pari-mutuel betting and gaming tables really swell the numbers of pathological gamblers?

In 2011, Howard Shaffer, an associate professor of psychiatry at Harvard Medical School, said in an article in the Annual Review of Clinical Psychology that an “excessive gambling affliction” does not infect everyone who enters a casino.

“The current available evidence,” the study found, “suggests that the rate of PG (pathological gambling) has remained relatively stable during the past 35 years despite an unprecedented increase in opportunities and access to gambling.”

In an interview with the Chicago Tribune, Shaffer said, “Of people in the U.S. with gambling problems, about 75 percent had a mental health problem first and a gambling problem second.”

That is not likely to calm the fears of the Sunday choir who see misery galloping toward them.