Friday, June 17, 2011

State Shutdown Could Close Minnesota Racetracks on July 1

The Minnesota Racing Commission met for their monthly June meeting on June 16th but a good part of the discussion was anything but business as usual: the effects of a possible shutdown on the Minnesota racing industry.

By way of background, the legislature adjourned prior to approving a budget that the governor would sign.  The Republican held legislature has their way to balance the budget and Democratic Governor Mark Dayton has his way.  Right now the two sides are far apart – not necessarily on the dollars, but certainly on the philosophy on how to get there.  Unless a budget is approved by June 30 there will be no appropriations of money for services therefore all non-essential government services will be shut down.  The governor has filed a petition with the Ramsey County Court to set up a mechanism for determining essential and non-essential services.  Word is that June 23rd is going to be the date that the judge will review the petition and, perhaps, determine the process.

So how would state shutdown affect racing?  The short answer is: no stewards; no racing and the state pays the stewards.  The longer answer is a shutdown could affect Minnesota racing for years to come.  The horse population this season is higher than at any time in 2010.  There are several trainers like Mike Chambers who brought up dozens of horses for this meet for the first time under the urging of track officials and word of mouth about how good it is to race here.  If only a month or so of racing is conducted how likely do you think him and the other folks trying Canterbury for the first time to come back again next year?  Trainer Valerie Lund testified to the commission that only a few dark days will send her elsewhere and you can’t blame her.  I know I am going to want other options for Tabby Lane should there be uncertainty about the future here.  It’s hard enough to make money in this game and to wait around to see if politicians can get their act together doesn’t put any money in our pockets.  Close for more than a week and the entire meet could be in jeopardy.  Even a break of only a few days falls right on 4th of July weekend, traditionally the busiest weekend of the season decimating earnings for the tracks that can never be recouped.

And what happens next year when the track didn’t meet its mandate to operate 50-days of racing in order operate the card club?  You’d like to think that common sense would prevail but there are no guarantees.  As Canterbury President and CEO Randy Sampson said at the hearing, “There is no ‘force majeure’ clause in the regulation.”  

By any rational measure you cannot consider a racetrack an essential service.  However the fact that the tracks are billed in advance by the state for expenses (Stewards, testing, licensing office) and that the bill for July is already paid needs to count for something.  In other words, the money gets paid to the state from the racetracks and then is automatically appropriated to the Commission. Thousands of private sector employees stand to be furloughed and, perhaps, completely laid off.  Not only would racing cease but so would operations at the two card rooms at Canterbury and Running Aces Harness Park.  In case you were wondering (and by comments I have received you are), the only effect on Native American casinos would be their ability to import new games into the state since there would be no state regulatory body to provide oversight of the shipments.  Operations continue as usual.

Ultimately the solution to the budget crisis in the state is a political one not a financial one.  However the politicians don’t have to feel the pain.

No comments: