PRESQUE ISLE DOWNS: A VISION FOR THE FUTURE?

Mountaineer Gaming’s ambitious plans could return racing—at long last—to western Pennsylvania.
Story by Andy PlattnerPhotographs by Diana Plattner.

The last time a race track opened in Erie, Pa., Secre-tariat was in the process of sweeping the Triple Crown. While Big Red earned a singular chapter in the annals of horse racing, Commodore Downs barely made it out of the starting gate.

It was launched with high hopes in May 1973, and attracted decent crowds, but its parimutuel handle could best be described as tepid. Patrons wagered an average of just $40 per day, far below the level needed to sustain a competitive purse structure.

By the early 1980s, Com-mo-dore had closed, though it was eventually reopened as a harness facility, Lake Shore Meadows. The three-quarter mile oval shut down again in 1985, and was re-christened as Erie Downs a year later when it reverted to Thoroughbred racing. This meet struggled as well, and reached an infamous moment in 1987, when jockeys went on strike because the track could not afford to hire anyone to wash their silks.

Erie Downs was subsequently denied a racing license because the Pennsylvania State Horse Racing Commission believed there were too few em-ployees to conduct a smooth, professional meeting. And thus ended the city of Erie’s last attempt to host live Thor-ough-bred racing.
Nearly 20 years later, Erie is ready to give it another try—and this time racing may gain a permanent foothold in northwestern Pennsylvania.

That’s because Mountaineer Gaming Group Inc., a company that already lists one frog-to-prince miracle on its race- track roster, is the driving force behind the latest venue.

Now that slots have been legalized in Pennsylvania (with this facility eligible for one of the licenses), Mountaineer is moving ahead with plans to build an $80 million race track and slots casino in Erie—to be known as Presque Isle Downs.

“Right now we’re in between a selection process for two different sites,” Mountaineer president Ted Arneault said in an early August interview. “We have a tract of land right on the main track between Cleveland and Buffalo. It’s where I-90 meets Route 97, great access from either of those cities. There’s also the highway coming up from Pittsburgh.

“The second site was suggested to us by the governor of Pennsylvania, Ed Rendell, [and is] called the International Paper site, a major paper plant that has been abandoned for the past eight years. It’s going through a major tear-down. There are 200-plus acres, right on the lake. The ingress and egress are not as desirable. But its positioning inside the city limits makes it very attractive.”

Arneault said his company hopes to begin construction this fall.
“Memorial Day 2006, we will be racing. We plan to have a 100-day racing calendar, all the way up to Labor Day. The weather in Erie is unbelievable in the summer. But it is also hard in the winter. During that time of the year, we might look at something like snowmobile racing. . . That is popular, too,” he said.

The name Presque Isle (“presk ile”) comes from a small, scenic penin-sula that juts into Lake Erie, visible from the city and playing into the image of a resort destination. Presque Isle is French for “almost an island.”

Arneault’s horse racing background was nonexistent before he took over management of Mountaineer Park in 1995. But he is largely credited with making the little Chester, W.Va., oval into a gold mine for not only himself and his company, but for horsemen and local merchants.
Slots revenue allowed Moun-taineer Gaming to construct a resort-style, 359-room hotel with a spa and fitness center, all just beyond the backstretch of the racing oval. The track, hotel and casino have more than 1,700 full-time employees.

For the Presque Isle Downs project, Erie Mayor Rick Fil-lip-pi’s office suggests 1,600 to 1,800 direct jobs will be created. Gov. Rendell’s office believes this figure to be lower, closer to 1,000.
West Virginia state Senator Ed Bowman told the Pittsburgh Post-Gazette: “Mountaineer Race Track has truly been a savior of Hancock County. . . [Arneault] also made a lot of personal wealth for people locally. People who invested in that early stock made some substantial wealth over the fact of Ted Arneault and what he was able to do.”

Booked solid When Arneault took over Moun-taineer in 1995, that track had an operating deficit of $5.4 million. Arneault’s solution had nothing to do with bringing in star horses or lowering parimutuel takeout, both common-sense approaches that have reaped benefits for the sport.
He lobbied for legislation that would bring slot machines to Mountaineer—in other words, prop up the racing with machines that had nothing to do with the game itself. In the mid-1990s, such a plan, be it successful or otherwise, dropped a worrisome question at the industry’s doorstep.
Had things reached the point where horse racing could no longer stand on its own?
“We were this far from shutting down for good,” said Rose Mary Williams, currently the director of racing at Moun-tain-eer. “The slots saved us.”

Once the joke of all racing east of the Mississippi River, Moun-taineer, with its slots-rich purse structure, rather swiftly became a place horsemen stopped laughing about. Trainers began complaining because they couldn’t get stalls there.

Ten years ago, the average purse at Mountaineer was about $2,400. Last year, it was $17,400.
“We currently exclude, on average, about 30 horses a day,” Williams said. “Actually, when we started the application process for Presque Isle, I put a notice on our overnight to see how many horsemen would like stall applications. The response was overwhelming. I had enough stall applications at that time to fill the stalls at Presque Isle.”

Williams said current Pres-que Isle plans call for the construction of 1,076 stalls, which includes those in the detention and testing barns. Mountaineer’s 1,234 stalls are currently booked as tight as Vegas hotels on Super Bowl Sunday.

Arneault said: “We’d have 900 horses available if the [Presque Isle] races began tomorrow. I see Presque as being a natural feeder with Moun-taineer, what we have already built there to be an extension of what we will have in Erie. The purse structure should be comparable to what we have at Mountaineer. I wouldn’t mind owning a horse trailer business.

“The equine industry is already major league in Penn-sylvania. Presque Isle will be part of the Pennsylvania-bred program. Pennsylvania breeders have to be excited. Frankly, I think this will be huge.”

The first priority for any race track is filling races, so on this point, Presque Isle already sounds like a promising facility. Horseplayers, too, might find it attractive; ample-sized fields always produce better parimutuel value and therefore a larger handle. But what transpires at Presque Isle might still be viewed with tepid enthusiasm in some corners of the industry because horse racing will only be part of the show.

“I think that the city of Erie is just starting to understand all that it has to offer as a vacation paradise,” Arneault said. “Lake Erie is beautiful and the infrastructure up there is already unbelievable. Within five miles of either site we are considering for Presque Isle Downs are 3,000 hotel rooms. There’s a Marriott, a Marriott Courtyard. One of our friends just built an indoor water park up there. We thought he was crazy. He’s adding to it, that’s how good business is.
“Look at the World Series of Poker. That is really hot right now. We own Binion’s [a WSP host hotel in Las Vegas], and we have seen first-hand how people like to be part of the action.
“I probably differ with a lot of people because I think horse racing is part of the entertainment industry. Magna and [Frank] Stronach have seen this, too, been ahead of the curve. But they have come around more slowly on the idea of slots. When Magna started buying tracks, their attitude towards slots was ‘No way.’ But now they seem more receptive.”

The long road to Presque If all had gone according to MTR Gaming’s blueprint, there would already be racing at Presque Isle Downs. Moun-taineer Gaming and its newly owned subsidiary, Presque Isle Downs Inc., first filed in 2001 for a license to conduct Thoroughbred racing, while Penn-sylvania politicians were debating the issue of legalizing slots. Early plans called for the track to be built at the I-90/97 site, with the facility to include both dirt and turf courses.

Mountaineer Gaming was granted the license in August 2002. Back then, Arneault said he hoped to have the facility open in time for the 2004 season. By the summer of 2003, Mountaineer’s president was also pitching an idea for a Pittsburgh-area track that could help provide funding for a proposed $270 million hockey arena for the Pittsburgh Penguins. Any Pittsburgh-area race track would provide major competition for The Meadows, a Magna-owned harness facility a few miles outside of town.

Magna and MTR Gaming were already feuding about the Erie license granted to Presque Isle. Magna contended that it had been denied a hearing by the Pennsylvania State Horse Rac-ing Commission in the Erie licensing process—that Presque Isle Downs Inc., in effect, had been granted the license in walk-over fashion, without competition. While Magna and MTR Gaming worked to settle the suit out of court, a common-wealth court proceeded to nul-lify the license, forcing MTR Gaming to reapply.

By the end of July 2003, Penn-sylvania’s racing commission had at least nine other applications for the two remaining Thoroughbred live racing licenses. (Philadelphia Park and Penn National had been granted two licenses apiece, one for each of their two annual meets.)
The battle for licenses, in one sense, seemed an entirely futile exercise. The slots bill was stuck in the mud at the state legislature, facing stiff, conservative opposition in both House and Senate.
Rendell, however, remained a staunch advocate of slots, insisting they would lower property taxes in the state by $1 billion annually.

Flash forward to July 2004: The governor finally got his way. Rendell signed a bill on July 5 that would allow for 61,000 slot machines to be brought into Pennsylvania. Each of the four existing horse tracks would be granted a slots license, as would Presque Isle and Chester Downs, a proposed harness track in the Philadelphia area. By this time, MTR Gaming was no longer claiming interest in building a track in Pittsburgh, though another group, Pittsburgh Palisades Park Inc., had filed a lawsuit because it seemed inevitable the license for that area would go to The Meadows.

Pittsburgh Palisades failed in one attempt to have the Presque Isle license invalidated, but, at press time, the group was requesting the state Supreme Court to hear its case.
So Arneault and MTR Gaming were waiting again.

“I just don’t want to start turning dirt over until we’re absolutely clean here,” he said. “But I haven’t lost my enthusiasm for Erie or Presque Isle, not at all.”
Priorities Mountaineer Gaming is planning to open a temporary slots parlor next spring in Erie, most likely at one of the two sites being discussed for the race track. However, like the opening of the race track by Memorial Day 2006, this timetable is a best case scenario.

Mountaineer Gaming has already staked one claim in Erie, having signed a letter of intent to purchase The Downs at Erie, an off-track betting parlor on the east side of town.
“It does a great business,” Arneault said. “On big days, like for the Haskell, it’ll be packed.” (Actually, on Haskell day this year, The Downs was not packed at all. Bettors, mostly middle-aged and beyond, did not fill all the tables. Parimutuel lines were short. At least one teller had brought along a novel.)

When Gov. Rendell signed the slots bill on July 5, 2004, Thor-oughbred racing in Penn-sylvania suddenly became the 2-year-old who’d debuted with a triple-digit Beyer figure—the object of great expectations.

Estimates for Philadelphia Park, a race track on the north side of a city that has a population of 1.5 million, suggest the purse structure there will eventually reach $400,000 to $500,000 a day. If so, stall appli-ca-tions will go as fast as free money.

Greenwood Racing, which owns Philadelphia Park, has already suggested it would like to turn the area surrounding the track into a vacation resort, one that would feature hotels and concert facilities. All of which, sounds, well, Mountaineer-esque.

In discussing his blueprint for success at Presque Isle, Arneault said, “We will serve four constituencies. First and foremost is the customer. You don’t give them what they want, they won’t come back. We want them playing our machines, staying at our hotel, eating our food. Next are the horsemen and our employees. Then are our local neighbors. Fourth are the owners of this company. You don’t get to four without starting at one.”

For the moment, this is the plan, the order of how decisions will be made if and when there is a Presque Isle Downs. In a peculiar way, the supporting role for the sport seems to make sense, at least in a city where it has failed before. Horse racing probably would never return to Erie simply because of public demand.

When racing arrives, it will not be the major drawing card. Yet, it will almost certainly have a better chance of surviving than it did three decades ago. And instead of offering proof that horse racing had fallen behind the times, the next race track here might provide an accurate reflection of things as they really are—as well as how they probably are going to be.