By Tracy Donhardt, The IBJ
tdonhardt@ibj.com
Officials in Madison County think they've hit the jackpot.
Legislation that cleared the Indiana General Assembly this spring will permit 2,000 slot machines at Hoosier Park in Anderson - as well as an equal number at Indiana Downs in Shelbyville - providing an economic jolt to struggling parts of the state.
While Madison County officials believe it's too early to assess the overall economic impact, they say two things are a sure bet: more jobs and more tax revenue.
The legislation mandates that tracks pay an annual wagering fee-a tax that could generate as much as $8 million a year for local governments in each county.
In addition, 400 to 500 new jobs will be created at Hoosier Park alone, said Rick Moore, president of the racetrack, which currently employs about 300 during the thoroughbred and harness racing seasons.
"We're coming out of having all our eggs in one basket, the auto industry," Moore said. "We needed to diversify; now we are and creating jobs. That's not a good thing, that's a great thing."
Madison County has lost thousands of jobs in recent years, thanks to the exodus of manufacturers like General Motors Corp. and Guide Corp. and cutbacks at others. As of April, the most recent month available, the county's unemployment rate was 6.5 percent, fifth-highest in the state.
And as jobs have disappeared, so have the residents who held them. Since 2000, the county population has fallen nearly 3,000, to 130,575.
The governments within Madison County will receive 3 percent of adjusted gross receipts-the bets Hoosier Park collects, minus gamblers' winnings-up to $8 million. If adjusted gross receipts reach the projected $290 million, governments will max out at the full $8 million.
Anderson and Madison County officials see lots of indirect benefits, as well, for areas like retail, tourism and entertainment.
"The trickle-down to the community will be there," said Greg Winkler, an economic development consultant for Anderson.
For example, new restaurants will arrive and existing ones will expand hours, Winkler said. "Certain restaurants have a threshold of capacity before they'll open, so this will change that threshold."
Especially attractive to retail and hotel developers will be areas along Scatterfield Road between Hoosier Park and the Exit 26 interchange of Interstate 69.
"There are lots of people who will never wager at a horse race, but will go for the slots," Winkler said.
If there's any disappointment among government leaders, it's that the so-called "racino" legislation caps the direct tax boost for the county at $8 million a year.
"The cap certainly wasn't my idea," said Sen. Tim Lanane, a Democrat representing portions of Madison County, including Anderson. "The feeling was that we're going to learn from what we did in the riverboat counties, where local revenues turned out to be much more than they thought."
Still, the city's cut of the extra taxes will help Anderson improve its infrastructure, one of the top items on Mayor Kevin Smith's agenda. The county's allotment will be divvied up based on population. That means Anderson will get roughly 44 percent of the take.
"It's not a silver bullet for solving the financing of government," said Smith, who notes that the city has to cut $1.5 million from police and fire expenses because of legislation the General Assembly passed last year capping local property tax rates.
Tourist mecca?
If development spawned by racinos in other parts of the country is any indication, Madison County will gain more than jobs and checks from the state treasurer. It will become a tourist attraction that plays host to entertainers like Dwight Yoakam, Pat Benatar, The Doobie Brothers and Wayne Newton-who have performed at similar venues.
Mountaineer Race Track & Gaming Resort in Chester, W.Va., was ready to go under in 1990 before West Virginia passed a law similar to Indiana's, said Rose Mary Williams, director of racing at Mountaineer. It was the first racino in the country when it added slot machines and video gambling about 15 years ago.
Today, a once-unincorporated burg near Chester, where Mountaineer is located, is a full-fledged town with gas stations, a Holiday Inn and several restaurants. Housing has sprung up, too, including several apartment complexes, Williams said.
Mountaineer's revenue and profit now are driven primarily by slot machine operations, the company said in its annual report. Mountaineer has become the biggest employer in the county, thanks to hires to support the slots and the nowthriving horse-racing operations. The track employs about 1,750 outright; thousands benefit indirectly, serving as horse trainers or in other roles.
Hoosier Park's owners are hoping for a similar renaissance here. The Anderson track has struggled in recent years. In April, locally based Centaur Inc., which had held a stake in Hoosier Park since it opened in 1994, bought the 38-percent interest in the track it didn't own from Louisville-based Churchill Downs Inc.
Boosting equine industry
Indiana is the 12th state to enter the racino market, according to the American Gaming Association. Under the legislation passed by the General Assembly, 15 percent of slot revenue must go toward horse racing purses and other horse-related activities. That will draw a higher caliber of horse and rider, and likely increase the racing season, which now runs about 120 days.
"I see [Hoosier Park] being much like what Mountaineer is," said Hoosier Park's Moore.
He said Hoosier Park might eventually add a hotel and convention center, and stage other entertainment, such as boxing matches.
About 105,000 people now visit the track annually. He expects that number to rise, but the company does not yet have a projection.
"This community needs some excitement," Moore said. "People will come not just for a day trip to play the slot machines. They'll come for the weekend."
Indeed, that's happened at Mountaineer.
"The biggest trend we've seen is in entertainment," said Marvin Six, director of The Business Development Corp. for Hancock County, which is home to the venue.
A Mountaineer lounge hosts acts each weekend. And a 52,750-square-foot convention center stages concerts, trade shows and other events. Mountaineer's 122,000 square feet of gambling space houses 3,220 slot machines.
Moore is one of many businesspeople in Madison County who have long had a similar vision for Hoosier Park.
Three years ago, when Winkler began working for the city, he identified alternative entertainment, like gambling, as the third principal market on which the city should focus. The other two were food processing and aerospace/information technology.
Companies from both industries have made investments in the area-most notably Nestle Corp., which is building a $359 million, 300-worker plant that will make Nesquik and Coffee-mate.
"As a community, we have to look at the global market and see where we can be competitive," Winkler said.