Are they off or are they gone?

New Mexico Business Journal, Sept, 1996 by Arlene Odenwald

The capitol building in Santa Fe may be called the merry roundhouse by some, but to battle-fatigued Woody Schick, president and CEO of Santa Fe Racing, owner of the Downs at Albuquerque, there's nothing merry about the rounds he's been fighting with the Legislature.

After failing to get legislation through allowing full-scale gambling, New Mexico's racetracks scaled their request back to electronic video gambling only. But that, too, has failed - twice, leaving a reeling horse racing industry in the throes of plunging handles and falling attendance.

From 1990 to 1995, New Mexico's racetrack handles - the gross amount of money bet - dropped nearly 30 percent. Attendance from 1991 to 1993 dropped 11 percent, but from 1994 to 1995 attendance dropped even more - by 35 percent, down to 850,127. State revenues, meanwhile, have also dropped, but the drop has not been as precipitous as the drop in handles - only 8.5 percent, due to increased taxes on parimutuel betting brought about, for one thing, by the addition of simulcast betting. In 1989 the horse racing industry generated nearly $1.4 million for the state; in 1995 the industry generated $1.28 million, down only 8.5 percent.

For the last nine years, the New Mexico horse racing industry has been under siege by what it says is a proliferation of Indian gaming in New Mexico and state-sponsored lotteries in Texas, Arizona and Colorado. Julian Luna, director of the New Mexico Racing Commission, says the drop in handles is a function of several factors: the economic downturn the state experienced in the late '80s, the growing number of out-of-state lotteries, and Indian gaming, the growth of which has skyrocketed since Congressional passage of the Indian Gaming Regulatory Act requiring states to negotiate compacts regulating the role of gaming in each state.

Although Governor Gary Johnson last year signed and U.S. Interior Secretary Bruce Babbitt approved a compact allowing Indian tribes to offer gambling, a federal court has declared the agreement illegal because it had never been approved by the Legislature. Now the resolution is up to the Legislature's and the Governor's ability to negotiate.

But a slight blip has slowed the industry's plunging curve, causing some industry watchers to express guarded hopes this year for some New Mexico tracks. Luna says the Downs at Santa Fe, which started racing June 14, seems to be doing well, better than last year, but it's hard to say whether that trend will continue through the summer. A hopeful Randall Summers, director of operations and assistant general manager of the track, says that handles and attendance have both been up.

Once owned by Santa Fe Racing, the Downs of Santa Fe was purchased last February by PTE, Inc., a corporation run by Pojoaque Pueblo. [Please see related article.]

Maybe a Little Better

Meanwhile, Santa Fe Racing runs races 11 months out of the year at the Downs at Albuquerque, where it is now headquartered. It also, under contract with the New Mexico State Fair, manages the Fair's month-long racing meets in September. The Downs at Albuquerque seems to be doing slightly better this year than last year, says Racing Commission Budget Director Paul Gordon.

Sunland Park has only conducted 91 days of racing this year compared to 191 days the year before, but day for day they seem to be doing pretty well enough, Gordon said. Stronger on-track handles and attendance coupled with full card simulcasting from major race tracks helped generate a series of purse increases this spring for Sunland Park, said General Manager Harold Payne.

Other racetrack handles continue at the same dismal pace or even a little lower. The live handle at Ruidoso Downs, for example, is down 10 percent this year compared to last year, says Mark Wilson, president of Hubbard Enterprises, owner of Ruidoso Downs. The handle at Ruidoso, a mere four miles from Mescalero Apache gaming at The Inn of the Mountain Gods, dropped by double digits when The Inn began to offer gaming five years ago.

Despite Ruidoso's slump, the All American Futurity quarterhorse race there is still the single largest purse in New Mexico, says Wilson. From 1982 to 1992, the race has attracted a $2 million purse. In 1993, however, the purse dropped to $1.9 million; in 1994, it was $1.6 million.

Quarterhorse racing makes up 25 percent of the total handle in New Mexico, and anywhere between 37 to 46 percent of total races are quarterhorse races; the rest are thoroughbred.

But for those who make their living off horse racing - reported to be 9,000 plus strong in New Mexico - fear runs deep that horse racing in this state may become an endangered species. Breeders who make their living off the industry are considering moving out of state. Tracks are suffering from a shortage of horses, says Summers with the Downs at Santa Fe.

It's Always the Purse

Trainers will move their stable of horses from parks whose purses are dwindling to parks whose purses are climbing, thanks to the addition of slot machines at some tracks across the country. A Texas trainer, for example, recently moved his horses from Sam Houston Park to Delaware Park in Wilmington, where slot machines have boosted that track's purses 100 percent.