New Form of Horse Betting Is Pushed to Fund Projects
The Equivalent of Slots Would Be Brought In, Foes of Plan Say

By Tim Craig
Washington Post Staff Writer
Thursday, January 25, 2007

Virginia legislators might decide that horses can help resolve congestion on state highways.

Colonial Downs, which offers betting on horse races at 10 sites across Virginia, is pushing for changes in state law so that it can offer a new form of gambling, called historical racing, on which people wager on horse races that have already taken place.

If approved by the General Assembly, Colonial Downs officials say, the electronic games would bolster the state's horse racing industry and result in hundreds of millions of dollars in annual revenue that would be used for transportation projects across the state.

"I think it is a logical progression of gaming in Virginia," said Ian M. Stewart, president of Colonial Downs. "Given we have a need for transportation money, I think we can do the same thing for transportation that the lottery did for education."

But gambling opponents say Colonial Downs, which has struggled to turn a profit since opening in 1997, is trying to trick legislators into approving slot machines.

"You have these historical races, but you can play them as fast as slot machines, so it's equally as addictive," said David Robertson, past chairman of the National Coalition Against Legalized Gambling. "It's just a sneaky way to get a slot machine."

In historical gambling, which is also called instant gaming, customers would put as little as a nickel and as much as $5 into a video terminal that resembles a slot machine. The terminal randomly selects a race from an archive of at least 10,000 previous horses races from tracks around the country. Customers review a graphic showing the odds and statistics for each horse before deciding which one to bet on.

The race appears on the monitor. If the chosen horse wins, the patron will receive a payout based on the odds, how much was bet and that day's purse.

Frank Petramalo Jr., executive director of the Virginia Horsemen's Benevolent and Protective Association,disagrees with the comparison to slot machines, which have become entangled in the debate over the social effects of gambling.

"Slot machines are 100 percent random. It's chance," said Petramalo, whose group is lobbying for the bill. "Instant racing really does involve some skill in the sense you are being asked to handicap races that have already occurred."

The first instant gaming machines appeared six years ago at Oaklawn Park in Hot Springs, Ark., where they are credited with a big increase in business. "For all practical purposes, it saved this track," said Eric Jackson, manager of the Oaklawn Jockey Club.

In Virginia, Colonial Downs faces significant hurdles in its effort to install the games. Even though the state made $400 million from the lottery last year, Virginia historically has been averse to most forms of legalized gambling.

But with the need for transportation projects estimated at $17 billion in Northern Virginia alone, Colonial Downs officials hope legislators can be enticed into supporting the racing games.

"We can get a couple hundred million more for transportation, and we can free up more money for other things," said Del. Phillip A. Hamilton (R-Newport News), the sponsor of the bill, which will be heard by a House committee. "The lottery creates new games all the time, and nobody questions that."

Under the proposal, the state would receive about half of the money generated annually to use for transportation, about $323 million a year, according to an analysis conducted for Colonial Downs.

Virginia legislators have taken a strong stance against slots. The House of Delegates passed a resolution three years ago asking that Maryland keep slots away from the Potomac River, fearing that problems associated with gambling could encroach into the commonwealth.

Since they cannot have slots, Colonial Downs officials said, instant gaming is needed to bolster Virginia's horse racing industry, which faces stiff competition and a dwindling fan base.

In Hamilton's bill, between 4 and 6 percent of the revenue generated from the games, up to $30 million, would go toward increasing the purses at Colonial Downs.

"It would be a fantastic source for purse money to expand and increase the number of racing days in Virginia," said Jerry Canaan of the Virginia Harness Horse Association.

But gambling opponents say the risks associated with expanded gambling, such as crime and addictions, outweigh the benefits. "If you had a pharmacy that wasn't making it, you wouldn't let them sell crack cocaine to stay in business," said Robertson, who cited studies that show legalized gambling costs a state between $2 and $3 for every $1 it brings in.

Such sentiment runs strong in parts of historically conservative Virginia.

"In my district and part of the state, we don't look too kindly on gambling measures," said House Majority Leader H. Morgan Griffith (R-Salem), from Southwest Virginia.

To make its case, Colonial Downs has hired a half-dozen lobbyists this year. Last week, the company rented a swanky new restaurant in downtown Richmond for a reception to show off the games to state and federal officials.

"I have no problem with it at all," said Del. Vincent F. Callahan Jr. (R-Fairfax), chairman of the House Appropriations Committee. "We're losing a lot of revenue to adjoining states."

Barbara Knickelbein, a gambling opponent who has been battling slots in Maryland, countered that Virginia lawmakers should think twice before they are tempted by the prospect of free money.

"The state will only get $300 million for transportation if Virginians lose $300 million," said Knickelbein, co-chairwoman of No Casino Maryland. "The state is going to gain, but somebody is going to be losing it."

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