“Horse racing in Nebraska not a sure bet” plus 1 more

Posted: 03 Jul 2010 05:16 PM PDT

Like everyone else trying to wade through difficult economic times, Kim Veerhusen has searched for ways to cut corners with his business.

Eliminating expenses isn't easy, though, when you're in the horse racing industry. Horses need to be fed. Veterinarians must be paid.

Veerhusen, who trains horses on a farm 30 miles south of Lincoln, near Adams, has trimmed here and there. He's limited his travel. He tries to do more preparation on his farm, rather than the track.

"I think we've cut it down as far as we can," said Veerhusen, who estimates his operation, about 32 horses, costs $3,000 per week.

Mind you, training and racing horses isn't a hobby for Veerhusen, a Nebraska native who's been a full-time trainer for seven years and part of the state's industry for 23 years.

It's what he does. It's his livelihood. And if the bottom line doesn't improve, Veerhusen may have to take his business elsewhere.

He's not the only one. Horsemen across the state are fighting increasing costs, stagnant purse structures, increased competition for the gambling dollar and now the uncertainty of having a race track in Lincoln beyond 2012.

"You're to a point where pretty soon, well, if it isn't working here, what are we going to do? Where are we doing to move? Do we want to move?" Veerhusen said. "I don't think anybody really wants to. They want to keep things going, and that's what we've tried to do."

The horsemen's fear of their industry collapsing isn't new. They've suffered through the closing of Ak-Sar-Ben, fought unsuccessfully for slot machines and off-track betting and watched gambling dollars cross state borders.

Their latest challenge may be their biggest: Keeping racing alive by building a mile-long race track in Lincoln to replace the current 5/8 oval at the former State Fair Park. The Nebraska Horsemen's Benevolent & Protective Association is leasing the current track from the University of Nebraska-Lincoln through 2012, and then must leave as UNL turns the property into a research campus.

The Nebraska HBPA has partnered with other groups - including UNL, Sunrise EquiTherapy and community leaders that comprise 2015 Vision - in planning a horse park south of Havelock Avenue near 84th Street.

Architectural firm Clark Enersen Partners has been working on plans for the project, which includes a mile-long track and grandstand, a multipurpose equestrian center, stables, campsites and space for restaurants and hotels.

Nebco Chairman and CEO Jim Abel, a member of 2015 Vision, said it's too early to publicly offer any updates or timelines.

"We're still in discussion with the university and the horsemen to hopefully come up with something that can possibly work," Abel said.

Without a track in Lincoln, the Nebraska horse racing industry suffers a major blow from which it might not recover.

"Somehow, we have to secure the Lincoln market for horse racing in this state," said Greg Hosch, vice president of Omaha Exposition and Racing, which oversees operations at tracks in Omaha, Lincoln and South Sioux City. "We can't afford to lose that."

The Lincoln market accounts for 20 to 25 percent of the state's overall pari-mutuel handle each year. The local economy also sees a boost during Lincoln's live meet, which runs from mid-May to mid-July. A 2007-08 economic profile by the Nebraska HBPA reported an estimated $1.97 million in 2007 in off-track spending - restaurants, hotels, gas stations and other businesses - by persons attending live or simulcast wagering in Lincoln.

"I don't think Lincoln, as a community, realizes it, which is a shame, but there is a lot of money," said Tom Sage, director of the Nebraska State Racing Commission. "We have approximately 2,500 licensees in the state, and roughly 1,200 of them working with horses in Lincoln.

"All you hear a lot of times is the gambling, the gambling, the gambling, but you don't recognize what we're bringing in."

Interest among the fan base has modestly increased in Lincoln over the past three years. The average daily live handle at Lincoln Race Course has increased 14 percent - from $60,988 in May and June of last year to $70,712 through the same months this year, according to director of racing Judd Bietz. (Nebraska's overall pari-mutuel handle, though, was down 5.53 percent through May.)

Lincoln's average daily live attendance, comparing the same time periods, has increased from 2,203 to 2,449. But Lincoln is running five fewer live dates than last year. In fact, the number of live racing dates in Nebraska has plummeted over the last two decades, from 228 in 1988 to 91 this year.

"We're at the point right now where we can't reduce the number of days of live racing in Nebraska any shorter than what we have," Columbus trainer Larry Staroscik said. "It wouldn't make any sense to have a football team and get them all ready to play and everything, and then have a two-game schedule."

State statutes dictate that tracks must run a number of live dates equivalent to 70 percent of the number they ran in 1988 - the year simulcast racing became prevalent.

However, three of the state's five tracks - Omaha, Lincoln and South Sioux City - now operate under a different entity and therefore are exempt from the statute. They are required to run only one Nebraska-bred live race each year to keep their simulcast licenses.

Horsemen's Park in Omaha, which generated nearly half of the state's $89,769,628 pari-mutuel handle in 2009 - including simulcast wagers - runs four live days of racing. Lincoln is running 32 live days.

Horsemen's Atokod Downs in South Sioux City, meanwhile, is "on life support," Hosch said, after its four-day live meet in 2009 lost $250,000. The track will run only one live day this fall.

Agricultural Park in Columbus, which is required to run 23 live days under the 1988 statute, has also been on shaky ground. The 15-member Platte County Agricultural Society Board of Managers had an emergency meeting in February to vote to authorize its contract with the Nebraska HPBA and have live racing from July 30 to Sept. 12.

Discussion centered on whether it was practical, profitable and financially feasible to run a live meet at a track that's been operating in the red. More than 100 members of the public, most in support of live racing, attended the meeting.

The contract was more than two months delinquent, but still approved by the Nebraska HPBA.

Wayne Venter was hired as general manager of the Columbus track after the contract announcement.

"From what I hear, it was probably less than 50-50 (of having a live meet)," Venter said. "There was good support from the city to keep the track. It's great for the economy of Columbus."

Without tracks in Lincoln and Columbus, that would leave trainers and owners only 31 live racing dates in Grand Island and four in Omaha, and not enough funds to extend either of those meets.

That's hardly enough dates for local trainers and owners to make a living, meaning many, like Veerhusen, would consider moving, further weakening, if not destroying, the local industry. Veerhusen said he's already considering heading south this winter.

"That's the one thing that's happened, is that we've shortened our season so much it's hard for owners to keep the horses around," he said. "If you've got to winter them for five months, that's quite a while."

And while year-round simulcast racing would still be available for fans, it's the live meets that create new fans, Hosch said.

Legislative efforts

What's become clear is that purse structures won't increase through expanded gambling or off-track betting.

A proposal to expand horse race wagering died in the Nebraska legislature in February.

The constitutional amendment would have allowed wagering on horse races from satellite locations across the state, pending approval of local city or county governments. Some of the profits would've been used to help build a mile-long race track in Lincoln. Voters would've needed to approve the amendment on the November ballot.

In retrospect, Hosch said, proponents of the measure should have set a limit on the number of satellite outlets.

"The perception was it would've been like Keno, 600 locations, and that's just not possible economically," he said. "You're talking about a few key locations, and that's it, that would've allowed us to expand."

Of the 32 states that offer Thoroughbred horse racing, Nebraska is one of six that ban simulcast betting outside horse tracks. Fans must come into the race track enclosure to make wagers. The Nebraska law hasn't changed since pari-mutuel wagering was legalized in 1935.

Senators also killed a 2009 proposal for slot machines at horse tracks. Voters rejected an amendment in 1996 that would have allowed off-track betting.

Gambling opponents say they don't want something else taking money from a struggling economy. Sen. John Harms of Scottsbluff said earlier this year gambling on horse racing creates "addiction, bankruptcy, crime and family destruction. That's exactly what it does for society."

Those in the horse industry, though, point to Keno and lottery tickets that are available at hundreds of locations, while horse racing, for years the only form of gambling in the state, is still restricted to five locations covering only one-third of the state.

"We already have legalized gambling here, and we're not really looking to add additional gambling," Staroscik said. "We're just looking to change the menu a little bit."

The case for a Lincoln track

With no more gambling dollars to help purses, horsemen are pointing to the financial boost a mile-long track would provide. The longer straightaways and wider turns would attract better horses, and, in turn, better jockeys.

More significantly, Lincoln would be more attractive in the simulcast industry and could sell its signal to more tracks across the nation, increasing its pari-mutuel handle and, therefore, improving the track's bottom line and purse structure.

Hosch said only seven or eight tracks currently buy Lincoln's signal. That number could increase to at least 30 tracks, he said, with a mile-long track.

But with the Nebraska HBPA's lease set to expire at the end of 2012, time is running out on finalizing plans for a new track.

"You know how long it takes to build a long-scale project of that kind," said Lynne Schuller, executive director of the Nebraska HBPA. "They need to start prioritizing and getting the financials together and getting a general overall plan fairly soon."

Nebraska HBPA president Jerry Fudge acknowledged that financing the project - at one point estimated at $50 million - is the biggest concern.

"We've got some ideas that we're going to pursue," he said. "I can't really say much about them right now. We don't have a lot of options, I guess."

Staroscik, 67, has been training since 1970. Like Veerhusen, it's his only source of income. If the Nebraska racing industry drops further, he said, he'll likely quit training, move to another state and seek an administrative position in a racing office.

He'd rather stay here.

"This is what I do, and I really enjoy it," Staroscik said. "I would hate to see racing in Nebraska fall by the wayside."

Reach Brian Rosenthal at 402-473-7436 or brosenthal@journalstar.com.

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Track in Nebraska to save horse racing iffy

Posted: 04 Jul 2010 11:43 AM PDT

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