VIRGINIA GOLD CUP SIMULCAST BILL PASSES SENATE AND HOUSE

In spite of assertions by Virginia Thoroughbred Association President Wayne Chatfield-Taylor that the breeders’ group would “become more active” in the General Assembly, only the Virginia Gold Cup Association is seeking legislative changes to Virginia’s pari-mutuel laws which would allow the NSA sanctioned meet to simulcast during the live Virginia Gold Cup meet held each May.

While neither the VTA nor the VA HBPA are proposing legislation in the current on-going session, both groups support SB 398 and HB 402 which will allow the Gold Cup to simulcast the Kentucky Derby on that one day each year.  The VA HBPA is embroiled in an on-going controversy regarding the purse account contract with Colonial Downs and the number of live racing days available this summer.

While Chatfield-Taylor has historically not been supportive of the VTA’s political activities and Virginia Equine Political Action Committee’s fundraising attempts to support various Senators and Delegates either sympathetic to or openly supportive of the industry’s agenda, the organization, along with the VA HBPA, has long advocated legislative changes that would promote meaningful growth of handle, purses and Virginia Breeders Fund revenue.  Those efforts, combined with those of Colonial Downs, have been thwarted recently by the Speaker of the House, William Howell who opposes what he calls “the expansion of gambling.”

At the same time, Chatfield-Taylor has historically openly complained about “playing the political game” and been unwilling to support campaign contributions to various candidates notably those who are members of the Republican Party.  Both Senator Jill Vogel (patron of SB 398) and Delegate Michael Webert (patron of HB 402) are Republicans. As of June of 2013, he had not participated in industry meetings with the key decision makers in the General Assembly including Speaker Howell.

None of the stakeholder organizations or their lobbyists have been successful in explaining to Howell and other anti-gambling Republicans that the Internet, along with Virginia’s law allowing telephone and internet wagering, have already expanded pari-mutuel wagering exponentially. Is spite of the illogical nature of Howell’s position, he and many others condemn any legislation friendly to pari-mutuel wagering no matter the positive impact on horse breeding, agriculture and open space issues.

While SB 398/HB 402 is designed to help fund the Gold Cup’s purses, it will ultimately have minimal long-term impact on racing in the Commonwealth and almost no impact on breeding in the state.

SB 398 was amended on the floor to restrict the simulcasting to only the Kentucky Derby and further limited in scope the number of days and licenses the VRC may approve for such simulcasting.  The changes minimizes the competition with Colonial Downs and subsequently likely to limit the overall impact to the Virginia Gold Cup’s Spring race.  As written and amended, the International Gold Cup will still be able to conduct wagering on its live product but not on simulcasts from other foreign or domestic tracks.

Senator Jill Vogel proposed Senate Bill 398 which would amend the Code of Virginia’s section regarding simulcasting and steeplechase racing.  At the request of Colonial Downs, the bill was amended last week to narrow down the scope of the legal activities as language was inserted saying “(ii) simulcast horse racing that is limited to the transmission from Churchill Downs of the Kentucky Derby horse race.”  The language also limits the eligible meet to one not lasting more than 14 days and it limits the Virginia Racing Commission to issuing only 12 such licenses.

Last week, the Senate passed the bill 30-10 and earlier today the House of Delegates passed the bill by a vote of 81-17.

While the Gold Cup conducted pari-mutuel racing last spring and fall at their Virginia and International Gold Cup meets, handle was limited due to technological issues the association is working hard to solve.  The end-goal for these two race meets is to generate enough handle to supplement purses now provided by a dwindling pool of sponsors who are only willing to designate limited dollars to such events no matter the demographic of the audience.  The Gold Cup crowd is both young and affluent – two things critical to potential sponsors – but raising purse dollars has become more difficult as a natural impact of a slowly recovering economy.

Last years, VTA and VA HBPA representatives met with Gold Cup executives and consultants to discuss various improvements to the Virginia-bred component of their racing product and a similar meeting was held with several racing commissioners to discuss legislative changes required for simulcasting America’s most popular horse race as a natural product to boost handle and subsequently purses at the Spring race.

Crowd estimates for the Virginia Gold Cup range to 50,000 and the handle for a Kentucky Derby simulcast could be substantial based on a per capita wager of $5 per person ($250,000) or $10 per person ($500,000).  By statute the Gold Cup would receive approximately 3 to 5% of such wagers depending on the fee charged by Churchill Downs for the simulcast signal.

On a related note, Del. Ed Scott has sponsored House Bill 1074 which creates a Secretary of Agriculture and Forestry and moves the Virginia Racing Commission from the Department of Commerce and Trade over to Agriculture and Forestry. The change is not expected to have a short term impact on handle, but should help the agency regulate the industry more effectively as a component of the agriculture industry.

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