Sunday, March 8, 2009

Racinos Make Bad Bet and Want Their Money Back

When you play games of chance you calculate the odds, play the game, and live with the consequences. The same was supposed to be true when it comes to the decision of racing track owners to go into the casino business. The Indianapolis Star reports:
In business just nine months, operators of Indiana's two "racinos" are pleading for a four-year, nearly $75 million tax reduction to help pay their bills.

The problem, they say, is that they overestimated the amount of money 2,000 slot achines would generate at the horse tracks and borrowed too heavily to pay $250 million in licensing fees to the state. Now they say they're having trouble making ends meet.

Lawmakers who support them say the breaks will preserve jobs and protect the tax revenue the tracks produce.

Critics, including Gov. Mitch Daniels, contend the racinos don't deserve a bailout over other industries, especially at a time of budget cuts and declining
revenues for the state.

The debate revisits issues raised in 2007, when legislation passed to allow slot machines at racetracks. The legislation won support because it directed $500 million to property tax relief. Lawmakers also were sold on slots because the new gaming revenues would help save the state's struggling horse racing industry and even fatten purses. It also didn't hurt that the state was charging the highest licensing fee for a gaming operation in the U.S.

But now Hoosier Park in Anderson and Indiana Live Casino in Shelbyville want a do-over on some of the math.

"We're looking for a mid-course correction based on a very unique situation with an astronomical license fee," said Jim Brown, general manager of Hoosier Park. "There were guesses made by us and the state as to what revenue would be produced. The guesses were wrong."
Translation: The racinos made a bad bet and now they want their money back. Would the racinos, mind if I do the same next time I go to the track? I'm pretty sure the answer would be "no."

The fact the House would pass such a measure giving the racinos financial relief in the midst of businesses failing all over the state is a testament to the corrupting influence of gambling money on the political process. I am pretty sure that if the new U.S. Attorney takes a close look at the ties between political contributions from gambling interests and the awarding of casino contracts and bailout money, that person will find plenty of prosecution targets.

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