Getting it Right

Evangeline Downs opens tonight with a new turf course and lofty ambitions.

Coming off a record-breaking 2008 that featured all-time records in both simulcast handle and total handle, and in field size average, Evangeline Downs will offer horsemen a solid stakes schedule as well as a nightly overnight purse structure of about $175,000 a night. Downs last year ageraged almost 10.2 starters per race over spring/summer season, the highest in North America. This year they are looking for an 11.9 average. [Daily World]

And it's little surprise as to what is the engine of success not only at Evangeline, but in Louisiana in general.

“It’s all about slot machines and OTBs (off track betting sites),” said Warren Harang, President for the Louisiana Thoroughbred Breeders Association (LTBA) Board of Directors. [Daily World (different article)]

Unlike in New York (and like every other state with OTB's), off-track betting supplements rather than competes with the tracks. And, unlike in nearly every other racing state with VLT's, the tax rate on the slots is low - less than 35% - and the horsemen fully reap the rewards.

According to Tom Early, the CEO for LTBA, the owner of a horse at the time of its birth (i.e., breeder in the majority of cases) receives 22 percent of earnings by that horse as long as they are won at a state racetrack.

“That’s why Louisiana thoroughbred racing is thriving,” Early said. “That money back to (the breeder) doesn’t come from the owner at the time of the race or from the race purse, it comes from an incentive program based on money from slots and gaming that are directed to the thoroughbred racing industry.

“For once, Louisiana got it right. Other states with slots and gaming were asking for 8-10 percent (of gambling revenue) for purses, we asked for 15 percent and they gave it to us. That money has helped Louisiana thoroughbred racing thrive at a time when it’s tough to be in business.”

Thus, the breeders have incentive to breed - “Last year, when every yearling sale in the country was down, we were up. Our average went up 43 percent" - owners have incentive to race for generous purses, fields are full, attracting simulcast bettors around the country, which increases handle, which flows into government coffers (a lower percentage of a booming business is better than a high percentage of a struggling one), and everybody is happy. It's not really that complicated, is it?