Galloping Toward Growth

Staff and wire reports

DAYTON

Ohio’s horse racing industry is showing signs of rebounding just as the Ohio Racing Commission has approved construction of horse racing tracks and casinos in Austintown and Dayton.

Anticipation of $10 million a year from casino revenue taxes and an estimated $1 million a month from video lottery play has led to a rebound in race horse breeding in Ohio.

“When most of the public says horse racing, they’re thinking about multi-million dollar companies that own the racetracks. It’s much more than that,” Jerry Knappenberger, general manager of the Ohio Harness Horseman’s Association said.

Horse racing has a yearly financial impact of $450 million on the Ohio economy from wages, purchase of goods, services and taxes, said William Crawford, executive director of the Ohio State Racing Commission.

The industry employs more than 12,000 people from stable hands to veterinarians. It’s a pared down version of the enterprise that had a $731 million impact eight years ago, but Bob Schmitz, chairman of the state racing commission says it’s rebuilding.

Growth in standardbred breeding comes after years of decline.

Once the top producer of standardbred horses in the nation, the Ohio industry had been declining since 2005 as other states approved video gaming at racetracks. Revenue from gaming supported breeding programs and raised purses in other states, while Ohio lost its place at the top. The decline led to a migration of quality Ohio horses, trainers and jockeys/drivers.

Now, millions of dollars from taxes on gambling revenues and VLTs are making Ohio competitive again.

Ohio Sires Stake purses, harness races for Ohio-bred standardbred horses, totaled $1.92 million in 2012 and will reach about $2.9 million this year. In April, opening-day purses at Thistledown jumped 65 percent compared with last year.

“We’re just seeing a glimmer of the future. It’s bright,” Schmitz said.

Standardbred horses born in 2012 could be among the starters in 2015 at the Holloywood Slots at Dayton Raceway and other racinos, including one under construction in Austintown.

At Hagemeyer Farms in Clarksville east of Lebanon, owner Scott Hagemeyer has 136 standardbred horses. The most he ever had before was 85. He spends $5,000 a month on grain, $1,500 on hay and about $11,000 a year on sawdust for the breeding stalls, but feels the investment is worth it.

“Previously, we wondered what the future of the business would be,” he said. “I’m not only planning for today, I’m planning for the future.”

There were 1,650 Ohio standardbred mares bred to Ohio stallions in 2012, more than double the 2011 figure, according to the United States Trotting Association. Ohio ranked third in North America for standardbred mares bred last year, up from sixth in 2010. Knappenberger predicts more than 2,000 will be bred this year.

Ohio’s gross casino revenue tax, money received by casino operators less winnings paid to patrons, is imposed on casino operators at the rate of 33 percent. The state racing commission gets 3 percent of that, or about $10 million a year now that all four casinos are open. Of that, $9.5 million will be used to increase purses at racetracks and to support horse breeding.

“This will grow horse racing overall in Ohio which is a positive result for agriculture,” Crawford said. ‘As breeding and purses increase, the number and quality of horses will also increase.’

The state also has paved the way for video lottery play at racetracks. According to Ohio law, a 9 percent to 11 percent cut of the net win at racetracks will be placed into an escrow account to enhance racing purses, to promote breeding programs and perks for horseman such as health insurance and retirement benefits. The net win is the revenue remaining after payout of prizes.