by Nick Hahn
For the second time in a little over a month, Colonial Downs has ended discussions with the Virginia Horsemen’s Benevolent and Protective Association (HBPA) via press release, the latest distributed on May 13, less than a week before an upcoming May 19 Virginia Racing Commission meeting. That meeting was called in an effort to end the now-six month impasse over racing days for 2014.
What’s more, the track reiterated its call for a new horsemen’s group to supplant the VHBPA — and it sweetened the pot by offering to “make a $2 million interest-free loan to a new, to-be-formed horsemen group.”
“It’s highly unprofessional, especially when you have a 17 year history of bargaining across the table,” claimed Virginia HBPA executive director Frank Petramalo of Colonial’s decision and offer.
The release followed a Monday morning sit-down of Colonial Downs and the VHPBA representatives that included Colonial owner and CEO Jeffrey Jacobs over speakerphone. The brief meeting was held in response to a proposal drafted by the VHPBA late last week and circulated among the meeting’s participants.
“Neither one said that they had a deal,” commented Virginia Racing Commission Executive Director Bernie Hettel after the meeting but prior to the release. “The Commission will develop a strategy to take action. We’re in the racing business, we need to race. The Commission is expecting a favorable response.”
At this point, how it will get one remains unclear.
Colonial entered the meeting looking to be reimbursed for $1.5 million it claims it has lost as a result of the impasse. With no contract in place, the state’s horsemen have prevented the track and its off-track wagering network from accepting bets on Thoroughbred races — during the most lucrative time of the year.
Horsemen had proposed a 25-day, five-week meet, coupled with $120,000 in reimbursement of what Colonial Downs officials deemed as speculative money. The VHBPA was willing to pay $70,000 in shuttle costs to try to attract horses from Maryland, which has been dark in past summers during Colonial meets. The horsemen were also willing to waive Colonial’s annual $50,000 contribution to capital improvements on the backstretch.
Sources said that Colonial was willing to forgive all but $500,000 of its lost revenue during the Thoroughbred signal shutdown if a new and stretched schedule was run — a schedule that would largely shutter the track’s backstretch.
According to Colonial’s estimates, the horsemen themselves have lost about $670,000 in funds that would have gone to the purse account as a result of the shutdown.
At a meeting earlier this month, the Virginia Racing Commission reaffirmed its December 2013 order for a 2014 season that mirrored the 2013 summer meet. Though that order made neither side happy, at the time Colonial was willing to accept it; the VHBPA balked.
Now the sides have traded places.
In this week’s release, Colonial Downs points to the VHPBA as the cause of the dispute after the horsemen “boycotted the Racing Commission award and eventually brought about the cessation of all wagering on thoroughbred racing in Virginia’s off-track wagering facilities.”
“We can’t force people to agree. That’s the whole problem,” commented Colonial’s president Ian Stewart about the ordeal that has ended the summer Colonial meet, at least as fans and horseplayers know it.
As far as the horsemen are concerned, it’s time to “run or revoke” — revoke, that is, Colonial’s license to operate OTBs and the racetrack. The VHBPA is calling for the Commission to enforce its order, which, were it to do so, would likely lead to a lengthy legal battle.
One Colonial proposal would have scheduled 19 days of live racing stretched over four months, with mostly weekend racing in June, July, September, and October. The idea was believed to generate some interest with the horsemen but never matured past the $500,000 Colonial Downs demand in lost revenue.
Colonial’s latest proposal, outlined in the press release, includes 25 days of live racing, beginning July 3 and ending November 2. That schedule would include just two days of live racing in August.
“I think there are benefits to the horsemen,” said Stewart in an interview. “There are more opportunities to race where the dates are spread out over a several month period. It’s something the horsemen have emphasized as a concern about the five week meet, that is, that there aren’t enough opportunities to start.”
In the release, Jacobs claims that “a high end meet is the future of Virginia thoroughbred racing if it is to thrive.” His suggestion is that a “high end meet” would be a very short meet with very high purses.
But Petramalo counters that Colonial is less interested in a quality meet and more interested in cutting costs by running a ship-in meet, rather than enduring the expenses of allowing stabling on the grounds. What’s more, he said, seeing the press release was the first time he’d seen this specific proposal.
Stewart acknowledges that the modified schedule would have “a lot of things we would have to develop over time.”
“The new model looks different from the old model. It concentrates race days in events where we can draw crowds which should be good for everybody.”
Stewart claimed that horseplayers would prefer “extending the schedule, which would give horses a chance to run more often. You don’t get that in a shortened meet. It provides a better idea on how the horses perform.”
He added, “The new and expanded schedule is more cost effective for Colonial Downs. Don’t have to pay full time staffs of people, we don’t have expenses like running around the clock security and we put it in front of more people.”
Many horsemen and racing fans contend that the track’s biggest problem has been its focus on cutting costs, rather than growing revenues — a claim that Stewart rejects.
“Just keeping it going has been plenty of outreach,” Stewart claimed. “It’s been losing money for 17 years.”
Petramalo contests that conclusion when depreciation is removed from the equation.
Thus, the sides remain far apart. How Colonial’s hoped-for new horsemen’s group would operate — whom it would represent, whether it could control the purse account, how it would get the Thoroughbred signal turned back on — are questions with no clear answers. Likewise, it is unclear what tools the Commission possesses — and is willing to use — to end the impasse.
The Thoroughbred meet at Colonial Downs has enjoyed national recognition for its turf course, Virginia Derby, and laid-back summer atmosphere. As dismal as handle and attendance figures have been in recent harness meets over the last several years, many would have believed the harness meet at Colonial would have been the first to go, yet….
“Since our off-track facilities are closed to thoroughbred racing from the VHBPA’s actions, Colonial Downs currently is in effect a harness horse track for 2014,” Jacobs states in the release.