With the future of horse racing at the Fair Grounds Race Course & Slots in doubt, New Orleans City Council members and state lawmakers are taking steps to preserve the tradition and stop any attempt by the fairgrounds owner to redevelop the property or shut it down. 

The fairgrounds owner, Kentucky-based Churchill Downs, Inc., notified state officials in a letter this week it will surrender licenses for racing, slot machines and video poker after failing to convince lawmakers to subsidize lost revenue. Whether the company follows through with its threat to pull out of Louisiana or cancel the upcoming racing season, which traditionally begins on Thanksgiving, remains to be seen.

But the dispute with state lawmakers and horse racing officials has raised concerns that Churchill Downs might try to redevelop the 145-acre property for another use or sell it to someone who would, though existing zoning would make that difficult. City and state lawmakers say they aren’t taking chances with the historic racetrack, which officially opened in 1872 and hosted racing events for nearly two centuries.

The City Council is expected on Thursday to pass a temporary ban on permits for any uses other than the racetrack and casino that already exists. Meanwhile, an amendment to Senate Bill 195 on Wednesday afternoon would require legislative approval for any demolition or cessation of operations. 

“Given the uncertainty surrounding CDI’s plans, council members recognize the urgent need to begin taking proactive steps to ensure that its future remains a fairgrounds and horseracing facility,” said Council Vice President Helena Moreno, who is co-sponsoring the council’s ban with Councilmember Joe Giarrusso.

SB 195, by state Sen. Jimmy Harris, D-New Orleans, would designate the fairgrounds as a “Louisiana Historic Site” under a conference amendment added by House and Senate members.

“The Fair Grounds has operated through war, flood, and economic upheaval, and remains a living institution of both regional pride and national distinction,” the amendment reads. 

A Churchill Downs spokesperson said it is not in discussions with anyone to sell the fairgrounds, though Gayle Benson has been a rumored potential buyer. 

“Our attention is currently directed toward operational challenges and the pressing business decisions that accompany them,” said the spokesperson, Tonya Abeln. 

Benson’s spokesperson, Greg Bensel, said she has fielded numerous calls about purchasing the fair grounds “and certainly has been monitoring the situation.”

“(Benson) has always maintained a great relationship with the leadership at Churchill Downs and certainly has been monitoring this situation,” Bensel said in a statement. “Her hope is that horse racing continues in New Orleans at the Fair Grounds and is prosperous and sustainable. It is an important and iconic industry that we cannot lose.”

Temporary measure

The City Council’s expected action Thursday will deal with permitted uses on the fair grounds property.

The existing zoning designation, HU-RD1, is generally meant for one and two-family homes with limited commercial uses that require conditional use permits. Churchill Downs already has conditional use permits for 700 slot machines and sports betting, which generate revenue to support the horse racing operation.

The council’s ban, known as an “interim zoning district,” would freeze any new land uses on the property for at least one year. The conditional use permits for casinos and sports betting would remain in effect as long as the horse track remains in operation.

Churchill Downs says it cannot continue horse racing without revenue from Historical Horse Racing machines, a new type of game that allows players to wager on anonymized races that have happened in the past. The Louisiana Supreme Court this year ruled the machines are illegal unless authorized by a local referendum, effectively striking down a 2021 state law allowing the machines.

Churchill Downs executives have said losing the machines will wipe out nearly half its off-track betting revenue and three quarters of its local profits. Their appeals for a state subsidy have been greeted skeptically by state lawmakers and officials who question whether Churchill Downs really needs a boost from public coffers. They point to public filings showing Churchill Downs’s net revenue in Louisiana was $150 million last year.

Churchill Downs also says it will be hurt by two new state laws allowing more poker machines at bars and truck stops.

Staff writer Tyler Bridges contributed reporting