By Bill Finley
The Stronach Group's efforts to open a racetrack in Massachusetts have taken a major step forward as it has located a piece of property in Lancaster, Ma. it is willing to buy if they are able to secure approval to build a track there.
The Stronach Group will meet with the Lancaster town planning board Monday to go lay out its plans to build the track.
“We're dead serious about this,” Stronach Group COO Tim Ritvo said. “This is an important market for us. There have been orders from the top to make sure we give every effort and take a hard look at this. We are in a step-by-step process. The first step is securing lands and it looks like we have a really good partner there.”
Lancaster is about 50 miles northwest of Boston.
Ritvo said The Stronach Group has earmarked $40 million for the building of a new racetrack.
The future of racing in Massachusetts is in flux because the owners of Suffolk Downs, which lost out on efforts to obtain a casino license, have sold the property to developers. The track will race just six days this year and is tentatively scheduled to close for good after its Aug. 5 program.
Despite Suffolk's demise, the Stronach team believes it can operate a Massachusetts racetrack at a profit. In order to do so, however, it will need legislation passed by the state whereby it is guaranteed the bulk of the revenue from simulcasting and ADW wagers placed within the state. The Stronach team, should it build a racetrack, would also be at the head of the line when it comes to companies looking to eventually operate sports betting in the state.
“If we were lucky enough to get legislation in our favor we would build a racetrack and we would want favorable ADW legislation, favorable OTB legislation,” Ritvo said. “Basically, if we are the guys providing the content in the state, we should get a majority of that money.”
With a parcel of property already chosen, Ritvo is ready to take the next steps.
“Now that we have located the property, the next step would be to get legislation and an agreement with horsemen in place,” Ritvo said. “The third step would be to build the track. There is $200 million of pari-mutuel handle in the state and we'd hate to see that go away.”
Massachusetts is in a unique situation because racing receives a cut from the slot handle at the state's casinos. With Suffolk running just six days a year, only a small portion of that pool will be paid out this year with the rest put in escrow. There is about $12 million currently in the fund, which is for purses only.
Ritvo said his company would not ask for any of the fund money to be diverted from purses to the track, but added that the existence of the money will make it easier to run a profitable operation.
“Nobody is building racetracks today and the reason is the economics of running them is too much,” he said. “Under the scenario where Massachusetts has slots revenue coming in and that money is being earmarked for purses, that makes the economic model much more viable.”
Ritvo went on to explain that with slots revenue providing the money for purses, ownership would seek a deal with the horsemen where a larger-than-normal percentage of handle goes to the track. It's common for horsemen and a track to split the profits from handle on a 50-50 basis. Ritvo said his company may be looking for a split along the lines of 70-30.
“We'd be looking for a more favorable split as the horsemen would be receiving their money from the slots,” he said. “Let's say, 60-40, 70-30. With the horsemen getting 100% of the slot money for purses, that creates an environment where you can be successful.”
If The Stronach Group's plans come to fruition, Ritvo said it would be likely that the track would open in 2020. He said he is prepared to guarantee the state and the horsemen a meet of a minimum of 30 days.
The Stronach team is not the only one looking to keep racing going in Massachusetts. The current ownership of Suffolk Downs sees many of the same benefits of operating racing that The Stronach Group does and is attempting to retain a racing license. The question for them is where would they hold a race meet? One proposal has been for racing to be held by Suffolk's current owners in Western Massachusetts at the long shuttered Great Barrington Fair.
Ritvo, who began his career as a jockey at Suffolk Downs, said his company would drop plans to operate in Massachusetts if it is not the only entity allowed to operate racing.
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