by Tom LaMarra, USTA Web Newsroom Correspondent

Lexington, KY — The Indiana Horse Racing Commission on Thursday (June 26) granted approval to Centaur, which owns the two racetracks in the state, to proceed with refinancing that won’t impact revenue from slot machines that goes to purses and breed development programs.

The “replacement first lien facility,” as it is called, will be funded by a syndicate of commercial banks, according to documents submitted by Centaur. The move will result in an annual interest savings of about $8 million.

Centaur first owned Hoosier Park Racing & Casino and emerged from bankruptcy several years ago. It then purchased Indiana Grand Race Course, which also had filed for bankruptcy protection under its previous owners.

When the refinancing was first addressed by the IHRC, Centaur planned to “subordinate” the funds — 12 percent of gross slots revenue — that goes to purses and breed development for Standardbred, Thoroughbred, and Quarter Horse racing. According to testimony at the June 26 IHRA meeting that is no longer the case.

IHRC chairman William Diener asked Robin Babbitt, an attorney representing Centaur, if the 12 percent of slots money would be unencumbered.

“That is absolutely true,” Babbitt said.

If there should be a default on the lien, Centaur said it will continue to make the statutory payments for purses and breed development. For fiscal year 2013, slots at the two tracks generated $55.91 million for purses and breed development programs for all breeds.