By JUSTIN SCHNEIDER, Herald Bulletin
justin.schneider@heraldbulletin
SHELBYVILLE - The passage of House Bill 1835 did more than authorize slot machines at Indiana's two horse racing tracks, it ushered in a new era.
"If we continue to support Indiana Downs and Hoosier Park, there's no telling what they will look like in years to come," said Joe Gorajec, executive director of the Indiana Horse Racing Commission. "We have two good race tracks that, in the slot era, can be phenomenal facilities."
The "slot era" unofficially got under way Tuesday during the first meeting of the Indiana Horse Racing Commission since the passage of the bill on April 30 and Gov. Mitch Daniels' signing the legislation into law.
The meeting saw officials from Hoosier Park in Anderson and Indiana Downs in Shelbyville getting down to business.
The commission approved a petition by Hoosier Park owner Centaur Inc. to issue and sell stock to five parties: Thomas V. Fulton, Marty F. Pieratt, George P. Murphy, David R. Moulton and Nicholas C. Deets. According to the petition, the stock was issued by Centaur "...in order to raise equity for (i) its projects in the State of Pennsylvania and elsewhere, and (ii) also to provide funds for general administrative purposes."
Both Centaur and Indiana Downs owner Indianapolis Downs LLC face a Nov. 1 due date for payment of $150 million toward a licensing fee to the state. The second and final installment of $100 million is due Nov. 1, 2008.
Centaur and the five individuals submitted to a background check from Richard Wilbur, investigator for the commission, who looked into each investor's character, criminal history, credit record and more. Centaur Chairman Roderick J. Ratcliff owns more than 1.1 million shares or about 24 percent, while Robert M. O'Malley owns over 1.1 million shares or about 22 percent.
Also on Tuesday, the commission approved a petition by Indiana Downs to purchase 27.6 acres of adjacent property to accommodate new stables. The purchase price is $300,000; the commission has been given authority to approve contracts for which the amount of consideration is $50,000 or more.
Both racetracks are expected to undertake construction projects to house the 2,000 slot machines permitted under the legislation. Hoosier Park leases its 110-acre site from the city of Anderson and officials are considering similar measures to accommodate its gaming venture.
"We've got architects and engineers and designers working on that and we want to make sure that whatever we decide is the right decision," said Rick Moore, president of Hoosier Park.
Officials from both tracks said they may house slot machines in temporary structures to generate revenue to offset the licensing fee and construction costs.
Joe Gorajec delivered an overview of the legislation, highlighting the creation of a $1 million drug testing fund and the allocation of 15 percent of adjusted gross revenue to race purses. Gorajec said estimates suggest that 15 percent could yield up to $60 million a year.
"Our racetracks already face the daunting task of funding the licensing fee and creating dedicated slot areas," Gorajec said. "I'm sure the management at both tracks is up to the task."
Alan Armstrong, vice chairman of the commission, asked whether the tracks will integrate gaming into existing racing areas or if the two arms of the business will be separate entities sharing a parking lot. Gorajec said the commission will continue to work with both facilities to determine the extent of integration."
Commission Chairman Sara McNaught began the meeting by extending her congratulations to those who worked to make slot machine gaming a reality.
"This legislation has given us the opportunity to create one of the best and most profitable horse racing industries in the country," McNaught said. "We're in a wonderful position to seize the opportunity that has been laid before us."
Also on Tuesday, the commission approved two horsemen's contracts, one between Hoosier Park and the Indiana Standardbred Association and one between Indiana Downs and the Indiana Horsemen's Benevolent and Protective Association Inc.