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Aqueduct Woes Threatens Closure

Posted on December 21st, 2010

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The economic slump has been especially hard on the horse racing industry. This industry even beats the losses suffered by the casino industry—one of the worst performing industries during the recession. To combat the mass closures of race tracks, states have implemented a series of ordinances that would support the horse racing industry. Some states have subsidized the budgets for the race tracks, giving these a couple of million dollars each year just to finance its activities. Other states require some parts of the casino revenue to be funneled into this ailing industry. Most states however have opted to integrate casinos and horse racing in the attempt to keep the latter industry alive.

The recent mass closure of Off Track Betting parlors in New York City has threatened the operations of the Aqueduct Racetrack. This comes after the recent good news that a Malaysia-based company will be constructing the city’s first ever gambling parlor. The proposed gambling parlor will have some of its slots in the Aqueduct racetrack, generating a boost in revenue for the ailing establishment. However, owners of the track estimates a loss of about $33 million brought about by the recent closure of betting parlors in the area.

The Off Track Betting parlors are the biggest revenue providers for the Aqueduct racetrack. With 54 of these parlors closing, the owners of the track, the New York Racing Association Inc, are convinced that this may be the end of the line for the race track. Dan Silver, the spokesman for the New York Racing Association Inc., though, is confident that the Aqueduct still has some fight left in it. At the moment, the racetrack is doing everything in its power to plug the holes made by the closure of the betting parlors and just hold on until the proposed gambling parlor by Genting finishes its construction. However, spokesman Dan Silver was not able to produce a specific figure. He said the New York Racing Association Inc is not sure how much they would be able to save. Adding that “it’s too early to say for sure,”

Genting has maintained throughout these developments that they will proceed with plans, whatever may happen to the Aqueduct racetracks. Though a huge portion of their slot machines will be placed in the race track, Genting believes that they would not be overly affected with whatever happens to the Aqueduct. “If [Aqueduct] was to run less races or close, I don’t think it will have material impact on the casino gaming piece of Aqueduct,” says Bill Lerner, an analyst at Union Gaming.

The Aqueduct, however, depends on the proposed gambling parlor to survive. Although the state has provided several racinos to aid the Aqueduct, the owners believe that their best hope lies in Genting’s gambling parlor. 7.5% of the Genting’s casino’s annual revenue will be funneled to the New York Racing Association Inc. as owners of the Aqueduct Racetrack. The owners have adopted several measures to attract the customers of the recently closed off track betting casinos. One such measure is the implementation of free bus trips to the race track. Benett Liebman, one of the trustees of the New York Racing Association Inc. believes that the measures seem small, but these pile up in the end. Moreover, the efforts are small scale because at this particular point, there isn’t really anything the company can do. He added “The Association really doesn’t have a lot of options in terms of marketing its product. It’s already operating under a tight budget at this point. It will be very difficult to find other revenue sources, and there is certainly no way for [the association] to borrow additional revenue from the private sector.”

Back when the industry was at its peak, the Aqueduct had housed more than 30,000 patrons a day. The figures had fallen since then. The latest figure clocks in at 281,713 visitors in 2009—an unimaginable drop from its heyday and 56% less than figures for 2001. The future of the Aqueduct remains bleak. But whatever the case, the future is never certain. The owners and supporters of the Aqueduct will continue their struggle and hopefully restore the industry to its former grandeur.