Horsemen are understandably wary about table games at Charles Town

Charles Town’s failure to secure voter approval for table games may have come as a rude shock for its parent company, Penn National Gaming Inc., which, by some accounts, expected to win in a landslide when the referendum took place on June 9 in Jefferson County, W.Va. But from the view of an outsider, the outcome wasn’t surprising.

For nearly 75 years, Thoroughbred racing has been the economic lifeblood for many people who live in the area surrounding Charles Town. And although the slot machines at that track have done much to boost the prosperity of the local citizens since 1997, the addition of table games—in the form they were presented—was a tough sell as far as local horsemen were concerned.

Legislation passed in the 2007 session of the West Virginia General Assembly, and signed into law by Governor Joe Manchin, authorizes table games at the state’s four race tracks—consisting of two Thoroughbred facilities, Charles Town and Mountaineer Park, and two sites for greyhounds. But the law also puts final approval in the hands of nearby residents, requiring that a referendum take place in the appropriate county before a track can begin offering blackjack, poker, craps and roulette.

Mountaineer Park breezed through the voting process on June 30, with the populace in Hancock County approving the measure by a margin of 58 to 42 percent.

It was nearly a mirror image in Jefferson County, where voters balked by a ratio of 56 to 44.

Why did the community resist a move that is designed to allow Charles Town’s gaming operation to thrive against growing competition from Pennsylvania tracks and elsewhere? Because many horsemen had trouble believing it would turn out to be a good deal for them.

The biggest concern is a problem of basic math: The law directs 2.5 percent of the table games revenue to purses. That’s significantly less than the horsemen’s share of revenue from slots, which in 2006 was slightly more than 8 percent. It’s not unreasonable to assume that table games would draw a substantial amount of wagering activity away from slots, and even attract a few horseplayers. Horsemen can easily envision a situation in which the purse account is dwindling while total dollars flowing into Charles Town’s gaming operation are rising.
In the months leading up to the referendum, track management made a concerted effort to gain the support of the group officially representing horsemen, the Charles Town division of the Horsemen’s Benevolent and Protective Association (HBPA).

HBPA leaders countered with proposals that might have made the addition of table games more palatable to horsemen—and reinforced Penn National’s commitment to the racing component of its Charles Town operation. Along with other items, the HBPA pushed for a system of accountability that would have eliminated potential questions about whether horsemen were actually receiving their legislated share from the table games, once the operation was up and running.

Ten days before the referendum, the HBPA board agreed to support the measure, provided that Charles Town conduct 235 days of live racing in 2007, ’08 and ’09 (the existing agreement calls for 220), rebuild the track with a synthetic racing surface, and establish a process whereby revenue to the purse account could be renegotiated if necessary.

Penn National returned with a lengthy proposal, some of which the HBPA found unacceptable. Negotiations soon came to a halt, and the HBPA decided not to take a public position, either for or against, the referendum. Many observers believe that the horsemen’s group sealed the issue, by not supporting table games.

The track will have to wait two years before the measure can again be placed on a ballot. By then, Penn National Gaming will likely be in new hands, its purchase by private equity companies complete.
Meanwhile, for Charles Town horsemen, it’s more or less a daily battle to preserve the interests of racing at a track that is increasingly focused on alternative gaming.