In many parts of the country, racing leaders and politicians are hotly debating the wisdom of installing slot machines at racetracks. But in central Iowa, the debate is over, the issue is resolved and the results are on display at Prairie Meadows Racetrack and Casino.
Only a few years ago the track offered some of the cheapest racing in the country, with total purse money averaging about $20,000 per day. Yet over the Fourth of July weekend, high-class horses were lured to this suburb of Des Moines by a $125,000 race for sprinters, a $200,000 stakes for 3-year-olds and a $350,000 race for older horses. Without slot machines, this couldn't have happened. Without slots, Prairie Meadows wouldn't exist.
The improvement of the racing here has been a stunning phenomenon, but to a visitor from the East there is an even more intriguing aspect to the presence of slot machines in Iowa. Slots were an issue that stirred controversy in the relatively urbane state of Maryland; Gov. Parris Glendening argued that installing the machines at Laurel and Pimlico Race Course would poison his state's quality of life. Yet in the conservative heartland of the nation, the voters in Polk County approved the machines by a 2-to-1 margin and made the one-armed bandits as much a part of local culture as football and corn on the cob.
There had been little gambling in Iowa before Prairie Meadows opened in 1989. The farm crisis had produced bankruptcies throughout the state, and leaders of Polk County were looking for a way to create new jobs. With Ak-Sar-Ben Racetrack prospering in neighboring Nebraska, horse racing looked like a potential growth industry. Under Iowa law, a racetrack must be run by a nonprofit organization, so the county created a nonprofit group to develop the new track. The opening of Prairie Meadows was accompanied by optimistic projections for growth, but there weren't enough bettors in the Des Moines area to support the business. "This is the sport of kings," said Tom Timmons, the track's chief operating officer, "and we didn't have enough kings here."
Prairie Meadows filed for bankruptcy in 1991, and closed during the 1992 season, leaving Polk County and its citizens on the hook for $60 million in debt. The track and the county saw one possibility for salvation: install slot machines. In 1994, the Iowa legislature narrowly approved slots, pending approval by the county's voters -- who gave their approval overwhelmingly. Taxpayers didn't want to pay off the track's debts, but there were other factors involved, too.
"There was real strong public support for this type of gaming," said Prairie Meadows President Bob Farinella. "There was a great need in this community for more types of entertainment -- and this was something to do. Iowans may be conservative, but that doesn't limit their ability to have fun. And they respect other people's right to [gamble] even if they don't do it themselves. You might think of most Iowans as traditional, staid churchgoers -- but they're here too. We serve 1,500 breakfasts on Sunday morning."
When Prairie Meadows became America's first racetrack to install slots, even the most optimistic proponents of the machines couldn't have anticipated what was going to happen. The casino opened in April 1995, and by the end of the year more than $1 billion in coins had been dropped through the machines. By the middle of the next year the track had paid off its $60 million debt plus the $26 million cost of remodeling. And the money keeps rolling in. This year more than $2.5 billion will go through the machines, generating a $135 million profit. Most of the revenue flows into the county coffers, but enough has been earmarked for racing to transform the sport in Iowa.
The track paid out $140,000 a day in purse money at its April-through-July meeting, attracting horses who run at big league Oaklawn Park during the winter. The high purses have stimulated the Iowa breeding industry, prompting most horse owners to improve the quality of their stock. "Before slots," said breeder Gary Lucas, "I bred my mares to stallions you never heard of, with a $500 stud fee. Now I'm taking my mares to Kentucky and paying stud fees as much as $15,000. The Iowa breeding industry was going out of business before this. Now you have trouble finding a farm with room to board another foal."
Simulcast bettors in other parts of the country have recognized the improved quality of Prairie Meadows's product and wager about $850,000 a day on the races from Iowa. But Iowans don't seem to care. They may gamble incessantly on slot machines, but they are not betting on horses. Prairie Meadows customers wagered less than $100,000 a day on the live races and a similar amount on incoming simulcasts. These meager sums could not support even a minor league racing operation without a subsidy from slot-machine revenues.
The legislation authorizing slot machines says they are allowed only if Prairie Meadows runs live racing, so the slots and the sport are permanently intertwined. But an economist -- or any hardheaded observer -- would question the sense of using casino revenue to support an industry that can't stand on its feet and hasn't been able to win over new customers. It is uncertain if Prairie Meadows will ever be able to do so. If a marketplace doesn't have a racing tradition and a solid bedrock of horseplayers, it's hard to create them after the population gets hooked on slots.
In states that do have an established racing tradition, the sport's leaders must look wistfully on the experience of Prairie Meadows. If slot machines can bring such prosperity to a track that was defunct and to a breeding industry that was almost nonexistent, what miracles could they accomplish in a state like Maryland?