MISSOULA – The Montana Board of Horse Racing is suspending simulcast operations for up to two months while a business advisory committee determines why the board lost money operating off-track betting at eight sites in six cities.
The board agreed to suspend simulcast betting Wednesday at the recommendation of the three-member advisory council appointed by the governor, the Missoulian (http://bit.ly/sZfjBF) reported Friday. The suspension begins next week.
Department of Livestock Director Christian Mackay said the racing board has a $560,000 deficit, partly due to the board’s overspending on live racing in 2011 in anticipation of simulcast generating enough revenue to cover it.
Simulcast racing allows customers to wager on horse races at tracks across the country in much the same way as they do at live tracks. There are eight off-track betting sites in six Montana cities: Billings, Butte, Great Falls, Helena, Kalispell and Missoula.
Most of the proceeds go back to the gamblers, but under state law, a percentage of all wagers are set aside to be distributed to the horse racing industry in the form of purses and assistance to live racetracks.
Simulcast racing income did not even cover its own expenses over the past year, said Mackay, who is acting as executive secretary of the racing board. Ryan Sherman was fired as executive secretary last week after being placed on paid administrative leave earlier this month.
Mackay said he did not know why simulcast racing failed to make money while the Board of Horse Racing was in charge, after it ended its contract with the California company Montana Entertainment and its president, Eric Spector.
“Theories abound,” Mackay said. “That’s part of what we need to take this time over the next couple of months and do, is see what’s happening and work through some of the expense issues we’re having, and possibly find another licensee.”
The board awarded Spector statewide rights in 2009, despite a decades-long history of profitable operation by the nonprofit corporation Montana Simulcast Partners, the Missoulian reported. The state began managing the simulcasting in November 2010.
Mackay told the board Wednesday he did not have the expertise needed to oversee the simulcast operations. During that meeting, the manager of Montana Simulcast Partners was mentioned several times. That group was formed in 1989 by the live racing meets to conduct year-round wagering.
Tom Tucker said only four of the seven tracks that made up MSP are even trying to operate this summer. “I just don’t see this group coming back together and trying to resurrect it,” he told The Associated Press on Friday. “But maybe there’s someone out there that would try.”
“The sad thing of the whole situation is that simulcasting over the last 15 years has been the one revenue mechanism that they’ve had to help these racetracks keep their purses and operations going,” Tucker said.
The business advisory council earlier this month informed local race tracks that the Board of Horse Racing wouldn’t be providing any assistance this summer unless its finances improve. In the past, the state has provided about $150,000 a year to local race tracks for help with workers’ compensation insurance for jockeys and other expenses, Mackay said.
“I think it will be very hard for any track in Montana to run because the support that they’ve received from simulcasting dollars for purses and operations — that’s gone away now,” Tucker said. “I won’t say that a track won’t try to run, but they won’t have nearly the money to operate on.”
Tucker said the board needs to look at the profits and expenses of the simulcast operation, as well as its other potential revenue sources, and come up with a plan to see if it can resurrect the simulcasting operation.
Mackay said the board is looking at places to cut expenses. That could include decreasing the number of simulcast feeds or cutting back betting to five days a week, Tucker said.