OSRC rules on Northfield and Lebanon sale requests

by Tom LaMarra, USTA Web Newsroom Correspondent

Columbus, OH — Deals for Hard Rock International to acquire 20 percent ownership interest in Northfield Park and the sale of Lebanon Raceway’s licenses to Miami Valley Gaming & Racing won conditional approval from the Ohio State Racing Commission on Thursday (Nov. 29).

Other state approvals must be obtained, but the OSRC approvals allow for financing for construction of video lottery terminal facilities and applications for VLT licenses to proceed.

Hard Rock earlier revealed its plans for a branded VLT casino and entertainment center that will be built adjacent to Northfield, which is located near Cleveland. On Nov. 29 Hard Rock chairman Jim Allen and Northfield owner Brock Milstein discussed their vision for continued harness racing.

“We look at this as an opportunity to be involved with the Milstein family and look at this (ownership share) as a great event for horse racing,” Allen said. “The first time we walked into Northfield Park and saw the condition of the facility, we said this is the place for us.

“We talked about racing, and the Milstein family will keep 80 percent ownership (of the racetrack and VLT parlor). We didn’t want to be responsible for the sole execution of racing.”

Brock Milstein said Northfield has made about $10 million in improvements in recent years, particularly to better accommodate full-card simulcasts on a daily basis, despite difficult economic circumstances.

“My vision is to spend more money on upgrading facilities on the customer side and the back of the house,” Milstein said. “We hope our product becomes more popular than it already is. We’ve been holding our own in the simulcast market.”

Northfield regularly offers more than 200 nights of racing a year, and that will continue. Milstein said the number could increase when the VLT facility is open, perhaps in early 2014.

When the sale of the 20 percent interest to Hard Rock is finalized, all seven of the racetracks in Ohio will have ties to gaming interests. Northfield, however, will be the only one left with majority private ownership.

Allen said the Hard Rock facility at Northfield will be lively.

“We’re not a supporter or proponent of putting slots in a box,” he said. “We believe in adding entertainment offerings.”

The partners in the Lebanon Raceway relocation are Churchill Downs Inc. and Delaware North Companies. They plan to build a racetrack casino about seven miles west of Lebanon just off Interstate 75 between Cincinnati and Dayton.

Though the OSRC approved the joint venture, it asked the principals to consider changing their plan to install a five-eighths-mile harness track rather than one seven-eighths of a mile in circumference. Commissioners also questioned the number of ship-in stalls — 125.

“I’m an old horse guy,” commissioner Willie Koester said. “I look at (these plans) and what I see is no stalls and a five-eighths-mile track. Will there be a clubhouse with dining? I hope this will be a first-class facility.”

Shawn Bailey, senior vice president of business development for Kentucky-based CDI, indicated there won’t be clubhouse dining for racing patrons. He said the property is too small for a larger racing surface, and that the partners would have to acquire additional land, some Koester and fellow commissioner B.J. Roach encouraged them to do.

The larger track would cost Miami Valley about $4.5 million more, Bailey said.

“There might be ancillary benefits to having a two-turn track, but in our experience we don’t believe there would be an increase in handle, revenue, or purses,” Bailey said. “We’re making business judgments and have to look at return on investment.”

Bailey also said the quicker the facility opens the better for the state and horsemen.

Ohio Harness Horsemen’s Association president Steve McCoy weighed in at the meeting, saying his organization agrees with the OSRC’s concerns about the proposed racetrack.

With Penn National Gaming Inc. planning to relocate Raceway Park to Dayton and Scioto Downs not far away in Columbus, it appears the three tracks will have to agree to form a circuit. Bailey said Miami Valley could race live from February through early June, with Scioto keeping its traditional late spring and summer dates and the Dayton track racing in the fall and winter.

Statutory date minimums tied to VLTs would thwart that plan, but officials indicated the language may have to be changed to accommodate a solid, productive racing schedule.

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