Mass. gaming act gives horse racing prize boost

New state gaming act gives struggling horse racing industry revived hope with share of slot, casino, and licensing fee revenues to boost prize money

By Katie Johnston

|  Globe Staff  October 10, 2012

REHOBOTH — George Brown has successfully bred about a dozen mares a season for the past few years on his 48-acre horse farm near the Rhode Island border. But since a provision in last year’s casino legislation bumped up prize money for Massachusetts thoroughbreds, more aspiring racehorse owners have been calling on Brown and his four stallions.

Today, two dozen foals frolic on his gently sloping Briar Hill Farm — and he expects that number to double again next year.

The gaming act is generating momentum for the state’s long-declining thoroughbred horse racing industry, which has dwindled to one unprofitable track, Suffolk Downs in Revere. In addition to authorizing the creation of a slot parlor and three casinos, the bill stipulated that a portion of gambling revenues be used to increase purses and boost bonuses for Massachusetts horse owners and breeders.

The promise of better paydays may not lead to a major boom in Massachusetts horse racing, but it is bringing business to local breeders and luring back trainers and owners who moved operations to states with more lucrative prizes. Veterinarians, blacksmiths, hay farmers, and others who work in the industry also anticipate more business as Massachusetts-bred stock becomes more valuable. The renewed interest could even keep some farmland from being sold for development.

It has become increasingly common for states to designate a percentage of gaming revenues to benefit horse tracks, and in some cases, the earmark funding has made a dramatic impact. In Pennsylvania, where 10 slot parlors and two new race tracks have opened since 2004, prize money for horse racing skyrocketed as slot dollars rolled in.

The Massachusetts horse racing industry — which is much smaller than Pennsylvania’s — is set to receive 9 percent of slot revenues, as well as a small percentage of casino revenues and annual licensing fees. It could amount to about $18 million annually when all the gaming facilities are operating, according to the New England Horsemen’s Benevolent and Protective Association, a Revere group that represents thoroughbred owners and trainers.

Most of the gambling money for horse racing will likely go to Suffolk Downs, which has been losing more than $10 million a year as on-site betting declined and the number of race days decreased. A portion will also be set aside for harness racing in Plainville.

The last study on the Massachusetts horse racing industry in 2003, found Suffolk Downs had a $300 million annual economic impact on the state. But study author Richard McGowan, a Boston College economist, now wonders whether horse racing is still relevant.

“The question comes down to: Are you artificially propping up an industry that’s eventually going to die?” he said.

In 2011, Suffolk Downs paid out $8.8 million in purses. Casino money could increase that by 25 to 60 percent, according to the horsemen’s association. Currently, the track has one of the lowest daily payouts on the East Coast. Most awards range from $9,000 to nearly $23,000 per race, divided among the highest finishers. If a Massachusetts-bred horse places in the top three, the owner, the breeder, and the owner of the stallion who sired the horse each receive a bonus. On a $20,000 purse, for example, the owner of the first-place horse gets $12,000, plus a $3,600 bonus. As purses go up because of the additional funding, so will bonus payouts.

Even though the first Massachusetts casino probably won’t open until 2016, some of those who work in the horse racing industry are benefiting now. Breeder Adel Salim, a retired engineer in Norton, said business has doubled this year, and he’s increased spending on hay, labor, fencing, and veterinary care.

Ventura Grain in Taunton, where Salim buys his feed, said sales to breeders are up this year. For instance, one barn that used to go through two tons of feed a week is now buying three, according to Ventura.

Terrence McGee, a Pepperell veterinarian, also expects to provide more care to horses bred here. “The feed man gets taken care of, the hay man gets taken care of,” McGee said. “It’s kind of a trickle-down situation where everything should be better.”

Nationwide, horse racing fell out of favor with gamblers as casinos proliferated. Tired-looking, spartan tracks proved no match for gambling resorts, with their big-name entertainment, luxury hotel suites, and celebrity-chef restaurants.

A jockey at Briar Hill Farm in Rehoboth walked a two-year-old thoroughbred through the stable.

John Tlumacki/Globe Staff

A jockey at Briar Hill Farm in Rehoboth walked a two-year-old thoroughbred through the stable.

But in some parts of the country, the influx of gaming revenues has spurred a horse racing revival. In Pennsylvania, the amount of slot money going to purses rose from $3 million in 2006 to $181 million in 2011. The increase is bound to be less dramatic in Massachusetts, but state officials are nonetheless optimistic.

“There’s a lot of high hopes that the increased purses will, in fact, breathe new life into this pastime,” said Elaine Driscoll, spokeswoman for the Massachusetts Gaming Commission, which oversees the horse racing industry.

In August, developers filed an application to build a casino at Suffolk Downs, the only group to submit a proposal to the state gaming commission for a Boston-area resort casino. If a casino is built there, the gaming law calls for a gradual increase in the number of race days, from 80 to 125 a year.

“For years, we have been competing for horses with other East Coast racing venues that have the advantage of higher purses due in large part to contributions from gaming revenues at those facilities,” said Chip Tuttle, chief operating officer at Suffolk.

If a casino at Suffolk Downs is rejected, however, many say the track would close, and take the state’s horse racing industry with it.

“They’re praying this thing goes through,” said Brown, the Rehoboth breeder, whose farmland has been in his family since 1850. “The breeders, the ones who have survived, they’ve been hanging off this cliff by their fingernails for like five, six years.”

Even the president of the New England horsemen’s association keeps most of his horses out of state to win more money. Anthony Spadea Jr., a financial planner in Braintree, used to race more than 200 days a year at New England tracks and county fairs. But a decade ago, as the number of race days kept falling and tracks closed, Spadea relocated his horses to Maryland, then New York.

Spadea, 69, keeps just one horse at Suffolk Downs and estimates he spends about $40,000 a year on training, blacksmiths, veterinarians, and insurance in Massachusetts, compared with about $500,000 when he had as many as 30 horses in New England.

“If the money here was comparable, of course, I would race here,” he said, noting that his horses race for purses of $30,000 to $80,000 in New York, compared with $9,000 to $23,000 at Suffolk Downs.

Trainer Michael Gorham, a Canton native who in 1996 left Massachusetts for Delaware in pursuit of higher winnings, came back to work at Suffolk Downs in the spring because of the new funding wrapped into the casino legislation. He brought 22 horses with him and employs seven full-time grooms, exercise riders, and hot walkers who cool down horses after training sessions.

Gorham, 48, said he is confident that gaming money will help the racing business. In the meantime, he’s happy to be back working on familiar turf after so many years away.

“It’s good to be home,” he said.