The owner of the Fair Grounds Race Course and Slots is in “active discussions” with state officials to ensure that the upcoming horse racing season will proceed on schedule, a company spokesperson said Friday.
Churchill Downs Inc., which has owned the historic racetrack for the past two decades, had asked the Louisiana State Racing Commission earlier this week to call an emergency meeting so that it could relinquish its operator’s license after the company failed to secure a public subsidy from state legislators.
The Louisville, Kentucky-based company operates its Fair Grounds slots business and 12 other off-track betting outlets under a license linked to its commitment to run a horse racing season annually from late November through the following March. The threat to pull out of the state had put this year’s season in peril and left hundreds of Fair Grounds and other horse industry workers worried about their jobs.
Churchill now appears to have backed off that threat, at least in terms of ensuring the forthcoming racing season, according to industry sources familiar with the situation.
“We are engaged in active discussions in the hopes of a favorable resolution for all stakeholders,” Tonya Abeln, a Churchill spokesperson, said via text on Friday.
Horses and jockeys come out to the track during Thanksgiving Day at the Fair Grounds in New Orleans, Thursday, Nov. 23, 2023. (Photo by Sophia Germer, The Times-Picayune)
STAFF PHOTO BY SOPHIA GERMER
Churchill’s chief executive, William Carstanjen, has reached a tentative agreement with Gov. Jeff Landry’s administration and Louisiana racing industry officials to proceed with the upcoming Fair Grounds season, according to an official with direct knowledge of the talks, but who isn’t authorized to be quoted.
The person couldn’t say what concession Churchill might still be trying to secure but added that “it was decided it was in everyone’s best interest not to (jeopardize) the racing season this year.”
Churchill is still determining which racing days it might apply for.
The 2024-2025 Thoroughbred season spanned 76 live racing days from Nov. 22 to March 23. Fair Grounds typically runs a separate Quarter Horse meet in late summer.
Gov. Landry’s office didn’t immediately respond to a request for comment.
Racing commission officials declined to comment.
Lost revenue
At issue in the dispute has been millions of dollars in revenue that Churchill Downs said it would lose after the Louisiana Supreme Court ruled in March that a new type of slot machine — called Historic Horse Racing, or HHR — was illegal under the state’s constitution. The court said the slots could only be reinstated if the company won voter approval in each parish where they operate.
The ruling stemmed from a lawsuit brought by Louisiana truck stop operators who had seen their video poker business suffer because of the popularity of the HHR slots, which are based on real past horse races but anonymized. The HHR machines can pay jackpots as high as $100,000, while the cap on video poker is $1,000.
In the legislative session that ended Thursday, lawmakers also passed a bill that increases the number of video poker machines allowed at truck stops from 50 to 60 and at bars from three to four. The bill also stipulated that the first $22 million from the additional poker slots would be used to boost purses for horse racing at Fair Grounds and the state’s other three race tracks.
In a photo provided by Hodges Photography, Angel of Empire, right, with Luis Saez aboard, outduels Tapit Conquest to win the Risen Star Stakes on Saturday, Feb. 18, 2023, at Fair Grounds Race Course in New Orleans.
Photo by Lou Hodges Jr./Hodges Photography
Churchill CEO Carstanjen wrote in his letter to the racing commission this week that the new legislation would further hurt Fair Grounds business as the truck stop poker slots would “cannibalize” its revenues. Churchill Downs has argued that it has invested $200 million in its Louisiana operations since it bought Fair Grounds in 2004 and has paid the lion’s share of purses, taxes and wages to support the horse industry over the years.
However, legislators pointed to the company’s record revenue and profit last year and declined to give a public subsidy at a time when Louisiana is struggling to find money for teachers and other public services.
Resolution?
The agreement between Churchill and the state, if finalized, will come as a relief to the 311 workers directly employed by Fair Grounds Race Course and Churchill’s other betting operations. It will also be welcomed by hundreds working in stables, as trainers and in other support areas for horse racing, industry officials said.
“It does look like things are better than they were earlier in the week and we’re hopeful,” said a senior Fair Grounds official who wasn’t authorized to speak for the company.
“There are 300-plus people that obtain their livelihoods at Fair Grounds, many of whom have not worked anywhere else in their lives,” the official added. “Everybody that works there wants to see Fair Grounds, a legendary institution, continue well into lives of our children and grandchildren.”
City and state lawmakers had taken action this week to make it difficult for Churchill to shut racing at Fair Grounds and develop the 145-acre property for some other purpose.
The City Council passed a motion Thursday by Council members Helena Moreno and Joe Giarrusso that created an “interim zoning district” that would forbid Churchill or any future owner from redeveloping the track.
State Sen. Jimmy Harris, a Democratic member whose district covers Fair Grounds, also amended a bill that declared Fair Grounds a historic site that couldn’t be used for any purpose other than horse racing.