Live horse racing is back on without the fans at a West Virginia track a few days after the facility was shut down due to the new coronavirus.
Hollywood Casino at Charles Town Races announced Thursday that horse racing would resume Friday night, The Journal reported. But the track’s grandstands, grounds and casino remain closed to the public, which can watch the eight-race card online or through the track’s simulcast partners.
The facility closed Tuesday night after Gov. Jim Justice ordered casinos around the state to shut down.
“It was actually made clear to us through the governor’s office that the mandated casino shutdown was not intended to apply to horse racing,” said Erich Zimny, the facility’s vice president of racing and sports operations.
The track said it will limit the number of people in the track’s barn area to horse owners, trainers and other essential workers.
Due to the virus, the track has postponed the Charles Town Classic, which was scheduled for April 18. No rescheduled date was announced.
The state’s other horse track at Mountaineer Casino in Chester does not start its 2020 live racing schedule until late April.
Sports wagering will remain offline at two West Virginia casinos at the start of the NCAA Tournament.
West Virginia Lottery Director John Myers says in a news release a contractual dispute that caused a shutdown of the sports books earlier this month continues at Delaware North’s Mardi Gras Casino in Nitro and the Wheeling Island Hotel-Casino-Racetrack.
Myers says negotiations are ongoing between the company’s management services provider and a technology vendor.
He says while the lottery is closely monitoring the situation, “it is now apparent that wagering will not resume at these locations in time for the early rounds of the NCAA Basketball Tournament.”
The dog and horse racing industries have played a major role in West Virginia’s economy since the mid-1930s. But in recent years, lawmakers at the statehouse have debated whether these industries fit into the state’s economic future. Those who support the racing industry are fighting to see it survive, while others say it doesn’t bring in revenue like it once did.
Nearly Ninety Years of Racing in W.Va.
Five thoroughbred horses spring from the gates in a nighttime race at the Hollywood Casino at Charles Town Races in Charles Town. Thoroughbred horse racing in West Virginia began here in 1933 when Charles Town Races first opened.
Jefferson County is also home to the oldest thoroughbred breeding farm in the state, O’Sullivan Farms. Many of the horses born and raised here go on to race at the Hollywood Casino or other racetracks around the world.
John Funkhouser is the Farm Manager and co-owner of O’Sullivan Farms. His great-grandfather founded the business in 1939, and eventually passed it on to John’s grandparents.
“At the end of the 40s, early 50s, my grandmother came out to the farm where we are now, and she bought this farm with her own money,” Funkhouser said.
Credit Liz McCormick / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
John Funkhouser tends to a young foal with its mother.
Today, John, his brother Joe, and their parents keep the place going along with the help of six to twelve employees.
The Funkhousers have seen hundreds of horses go in and out of their gates over the past eight decades. And several of their horses have been champion racers. One made it into third place in one of the Triple Crown races— the Preakness Stakes— in 1939.
Credit Liz McCormick / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
One of the eight stallions at O’Sullivan Farms.
Today, they have eight stallions, 42 broodmares, 46 yearlings and foals, and nearly 150 acres of farmland. About one of every four horses living on the farm belongs to clients from all over the country.
“There’s so much beauty in raising these horses,” Funkhouser said. “When you finally get that horse that you’ve been raising and breeding for five years, and it does well, [it’s] not much more gratifying than that.”
But it’s a tough industry, and it’s expensive.
Funding a Pricey Industry
A horsemen family like the Funkhousers rely heavily on state funding to keep their operation going. State funds pay for things like feeding and caring for the horses, helping pay bet winnings, paying jockeys and other staff.
Credit Liz McCormick / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
A mare with her foal at O’Sullivan Farms.
The state’s racing industry is supported in a variety of ways, but the West Virginia Legislature supports the industry mainly through three accounts—the Greyhound Breeding Development Fund, the Thoroughbred Development Fund, and the Purse Fund.
The Purse Fund is the biggest. Each year, a certain portion of tax dollars and casino revenue goes into this fund. The cash mostly comes from video lottery, table games, and betting at the state’s four casinos.
But the Purse Fund has dropped over the years—from about $75 million four or five years ago to about $40 million in 2018.
The Greyhound and Thoroughbred Development Funds have both received between $1 million and $2 million less over the past four years.
Credit Courtesy Photo / West Virginia Racing Commission
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West Virginia Racing Commission
These three accounts are directly linked to how well a casino performs each year.
And given the decline in casino revenue, some lawmakers question the remaining investment in the racing industries. But those who support the industry argue horse and dog races at the state’s casinos are key to keeping those casinos competitive with surrounding states.
Support or Opposition from the State of W.Va.
The Funkhousers and others in the racing industry constantly worry that funding from the state will continue to dwindle.
“Every year, for the last eight years, we’ve gotten less and less money from what we’ve been promised,” Funkhouser said. “But because you’ve got a legislature that doesn’t fully understand the industry, they’ve taken a successful industry that was hugely successful seven or eight years ago, and now it’s on the brink of collapsing.”
The 2017 state Legislative session was a tough budget year, with a $450 million shortfall. In that year, budget allocations for several industries, including the Greyhound Breeding Development Fund, were almost eliminated. There were concerns the same thing might be considered for the Thoroughbred Development Fund.
During the 2018 regular session though, continued funding for the state’s two racing industries was not in jeopardy. There was even a bill to help them get more money. That bill passed unanimously in the state Senate, but didn’t make it out of the House Finance Committee.
Jefferson County Delegate Riley Moore is passionate about the horse racing industry in his region, and he hopes to see state support for the racing industries restored back to a more competitive place.
He argues the industry is good for West Virginia—that it supports green space, tourism, and boosts the economy.
“As important as the coal industry is to other parts of the state, that is the level of importance the horse racing industry, the thoroughbred industry, is for Jefferson County in the Eastern Panhandle at large,” Moore said. “That is our coal industry here. That is the long term industry that is one of our biggest employers here. So it’s certainly huge for the area and for the state of West Virginia.”
Credit Courtesy Photo / Coady Photography
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Coady Photography
Thoroughbred horses spring from the gates in a race at the Hollywood Casino in Charles Town, W.Va.
But other lawmakers think it’s a bad investment because it doesn’t bring in enough revenue for the entire state like it did in previous decades.
Delegate Eric Nelson, the House Finance Chairman, said he’s sympathetic to the struggle of the racing industry, but has concerns the industry is declining and fewer people are attending races.
So, in tough budget years, he said state funding can’t always be guaranteed. “It’s a big balancing act,” Nelson noted. “[The racing industry] means more to some of those districts that actually see the full component of that, but then there are many other areas of state that don’t get the full benefit or see the full benefit of that, and there’s concerns about the priorities of dollars and where they should go.”
The Racing Industry’s Impact
An economic impact study done by West Virginia University in 2012 indicates that declines in attendance has affected the amount of cash going into the funds, impacting the level of state revenue accrued each year.
The report found that the industry brings in roughly $4.5 million in total state tax revenue annually.
Credit Liz McCormick / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
A foal with its mother at O’Sullivan Farms.
Charles Town Races accounts for nearly 50 percent of the total business impact from the state’s racing industries. Mountaineer Park in Hancock County accounts for 30 percent, and the two greyhound tracks, Mardi Gras in Cross Lanes and Wheeling Island in Wheeling, together contribute about 10 percent of total business volume impact.
The 2012 study also indicates the thoroughbred and greyhound racing industries in West Virginia contribute more than $320 million in total business volume to the state’s economy.
That’s 7,300 jobs, which is about 10 percent of employment in West Virginia’s leisure and hospitality sector.
A more recent economic impact study on the state’s racing industry has not been conducted.
The House of Delegates has passed a bill that would effectively put an end to greyhound racing in the state, according to its opponents. Senate Bill 437 discontinues the Greyhound Breeding and Development Fund, putting about $14 million back into excess lottery revenue accounts for lawmakers to appropriate in the upcoming fiscal year. The bill was approved last week in the Senate on a 19 to 15 vote.
The fund was created by the state Legislature in 1994 and helps support greyhound racing at the state’s two racetrack casinos in Wheeling and Nitro. It’s made up of a small percentage of the money bet at table and video lottery games at those locations and helps pay breeders as well as the winnings on races.
Greyhound officials have said eliminating the fund would cut 1700 jobs in the industry.
Several delegates – mostly Democrats – spoke against the bill during a Saturday floor session, like Joe Canestraro, of Marshall County.
“All this body has done has voted to cut low hanging fruit,” Canestraro said, “Low hanging fruit under the illusion that we’re right sizing government. No, what we’re doing is we’re taking jobs and revenue from each of our districts is what we’ve done.”
Delegate Erikka Storch, of Ohio County, was the only Republican member of the body to speak in opposition to the bill. She says the entire state reaps the benefits of greyhound racing.
“All of your districts get money from the racing casinos and the Greenbrier,” Storch said, “I would imagine if you speak to your mayors and commissioners, they will tell you about their uses for this money. Based on a study in Iowa, a year after they eliminated greyhound racing, their figures dropped 20 percent. Every district in the state will feel this.”
Delegate Shawn Fluharty, a Democrat from Ohio County, pointed out the secondary jobs that cutting the greyhound fund could impact.
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
Del. Eric Nelson, R-Kanawha, House Finance Chair.
“Sarah’s Kennel’s in Wheeling; they spend $5,000 a week on food and vitamins for the greyhounds,” Fluharty noted, “Now, where do they purchase that? Tristate Kennel Supply in Brooke County. They purchase vehicles; a typical kennel truck costs $60,000. Sarah’s Kennel’s owns ten of them. Where do they purchase them? Robinson Chevrolet in Wheeling, and then driving those kennel trucks, who drives them? Employees. Up and down Route 2. How much do they pay a week in just fuel? They average around $300 a week in just fuel. How many small businesses will be impacted?”
Only four delegates spoke in support of the bill, including House Finance Chair Eric Nelson who says the industry is dying in the state and it’s time for lawmakers to make tough budgetary decisions.
“At the end of the day, we’ve got to have; we ask the question of priority, and this happens to be a priority where we use a certain amount of state dollars to support a purse fund,” Nelson explained, “so the priority is, do we use this amount of money to support purses? Or do we look at our higher education and have an effect on that? Do we look at some of our health programs? The alternatives are some serious cuts to other areas that will also have serious effects on many, many citizens of West Virginia. Mr. Speaker, there’s no easy decisions with this budget.”
Senate Bill 437 passed 56 to 44 and now heads back to the Senate before moving on to Governor Jim Justice for a signature.
The House of Delegates passed a bill that would end the Racetrack Modernization Fund three years early.
The fund was created by the Legislature in 2011 to provide matching dollars for the state’s four racetrack casinos to upgrade video lottery and other digital games.
According to the casinos, the fund allows them to keep up with competition from other states. For every $2 the casino spends, the state matches the facility $1.
When it was created, the fund received $10 million annually that could roll over year-to-year, but was decreased in recent years. It currently contains $7.5 million.
According to the bill, any upgrades that were planned by March 1, 2017, will still receive funding, but the rest of the money will return to the state’s general revenue fund.
Several delegates who represent the Eastern and Northern Panhandles expressed opposition to the bill – where three of the four casinos reside.
The bill passed on a close vote of 50 to 46, with four members not voting.
As lawmakers try to find ways to deal with the state’s financial problems, the House Finance Committee discussed a bill that could put $9 million back in the budget. The bill originating in the House’s Finance Committee would end the Racetrack Modernization Fund.
The fund was created in 2011 to supplement the cost of upgrading video lottery terminals – or digital slot machines and other lottery games. There are four racetrack casinos in the state – Mardi Gras in Cross Lanes, Mountaineer in Chester, Wheeling Island in Wheeling, and Hollywood in Charles Town.
Three of those casinos are in border areas and bring in out-of-state gamblers who contribute to West Virginia’s overall income. But in the mid-2000s, surrounding states began building casinos of their own. The fund was seen as a way to keep West Virginia’s gaming facilities more competitive.
Each year, lawmakers set aside $9 million in the Racetrack Modernization Fund for the upgrades, and any unused money rolls over from year-to-year. Currently, there’s $7.5 million leftover from last year. But the fund itself is only supposed to last until 2020. The House Finance Committee’s bill would end the fund three years early and re-appropriate the money to general revenue.
Some delegates in the Northern and Eastern Panhandles, however, had concerns about ending the fund, including Democratic Delegate Jason Barrett, of Berkeley County, who questioned Louis Southworth, an attorney representing the West Virginia Racing Association
“What kind of decrease in revenue have these casinos seen with this increased competition?” Barrett asked.
“I believe that in some of the years the racetracks were contributing around $450 million to the state,” Southworth said, “Last year, it was $367 million, so there’s been a decline, but at least the tracks feel that the fund has helped them keep that level up, and it would’ve been a lot worse if they hadn’t had it.”
“Would you agree that a lot of the players at these casinos are from out of state and having up-to-date games on these slot machines are critical to bringing those people in?” Barrett asked.
“No question,” Southworth answered, “It’s probably 80 to 90 percent from out-of-state, and the competition is fierce.”
Republican Delegate Erikka Storch, of Ohio County, also opposed the bill. She says the casino in her area is a huge contributor to her community, and losing the fund could make them less viable.
“If the racetrack doesn’t have the ability of that capital to upgrade their machines, will they have to lay off people? Will they have to, you know, direct their resources in other ways to maintain a competitive advantage? Will they be able to be a good player in the community as they have been? You know, they support a lot of nonprofits, they host a lot of things, they’re a major donor to a lot of things; they give back to the community a lot,” Storch explained, “Will they be able to do that? Or will they have to redirect those funds toward their capital necessities?”
Storch says she and some of her colleagues may consider offering an amendment on the floor.
House Finance Chair Eric Nelson, of Kanawha County, says he’s sympathetic to his colleagues’ concerns, but points out it’s additional revenue that can help balance the state’s budget deficit.
“I’ve got a casino, or gaming facility right in my backyard; fully aware of that,” Nelson said, “It is one of the balancing acts, you know. The priority of giving certain people or industries tax credits versus balancing the budget and doing other things like cuts and other revenue measures.”
The House Finance Committee did vote to move the bill to the full House, but on a close roll call vote of 14 to 11.
