Situation 'Dire': Fair Grounds May Not Run 2025-'26 Race Meet Without Legislative Help

Yahoo

14-05-2025

The future of Fair Grounds Race Course & Slots is 'dire,' an attorney for owner Churchill Downs, Inc. told the Louisiana State Racing Commission on Tuesday, and if economic circumstances do not improve the 2025-'26 meet at the New Orleans track will not take place.The attorney, Ozair Shariff, read from a statement at the emergency meeting, held at the racing commission office in New Orleans, citing the loss of revenue from historical horse racing machines at Fair Grounds and the track's off-track betting facilities. In March, the Louisiana Supreme Court ruled a 2021 state law authorizing HHR machines without local referendums was unconstitutional.
Fair Grounds racing operations alone lose 'millions annually,' Shariff told commissioners, but revenue from the track's slot machines offset the losses, allowing the property to break even. 'Fair Grounds' overall profitability is dependent on revenue generated from its OTB network, specifically video poker and historical racing – until last week,' Shariff said, referring to the cessation of HHR wagering after the Supreme Court decision went into effect. 'The elimination of 46 percent of the OTB revenue and an even more significant 74 percent of OTB EBITDA does not allow Fair Grounds to cover its required $9 million average annual maintenance operating capital.'Faced with this reality, operating under the current status quo is no longer an option," Shariff said.The Louisiana legislature is in session until June 12, and Shariff said CDI is 'actively engaged in numerous discussions with key legislators in an attempt to solve this very dire problem. While these talks have slowed, Fair Grounds remains committed to maintaining an open dialogue and finding a path towards long-term viability before the end of the session.'The future success of the Fair Grounds is something we must confront together, or else the state's entire horse racing and breeding ecosystem, and the thousands of jobs that it supports, is at risk,' Shariff said. 'At this time, the Fair Grounds is unable and unwilling to commit to the 2025-2026 race dates assigned at last month's meeting, and as detailed in the HBPA's most recent submission, which were approved without application by the Fair Grounds. If a solution is found that ensures the Fair Grounds' long-term economic viability, then the Fair Grounds will commit to racing in the fall.'
Shariff was immediately rebuked by Louie Roussel III, a prominent New Orleans businessman and horse owner who once owned the Fair Grounds and spoke to the commission, he said, on behalf of Gov. Jeff Landry.'Churchill Downs got along pretty good before they had HHR machines, didn't they?' said Roussel. 'They didn't complain about their profitability. They sent two individuals to meet with the president of the Louisiana Senate, Mr. Cameron Henry, asking for a subsidy for the Fair Grounds for the upcoming season. They presented no evidence of any loss of funds.'Do not let them come here and poor mouth you,' Roussel told the commissioners, adding that CDI had revenue of $2.8 billion in 2024 and $427 million in net profit. "Does this sound like someone who is poor mouthing? It's laughable. Do not allow these people to do this. … If they tell you they don't want to race, fine them $50,000 or $100,000 a day for every day they don't race.'
Roussel said Bill Carstanjen, CEO of Churchill Downs Inc., threatened to 'padlock the track' if they didn't get their way.'I urge you to do what is right for the horsemen, the breeders, and, more importantly, the citizens of the state and the citizens of New Orleans to stand up to Churchill Downs and not allow them to dictate to you what you have to do. This should be a partnership: the track and the commission to help racing be better, not the way they present it.'Gov. Landry has told me to tell them, take out your HHR machines, replace them with the video poker machines you had, and start the process, the legislative process if you want HHR machines,' Roussel said. 'There will be no state subsidy for this racetrack. None.'
Commissioners voted to approve a Nov. 20-April 9 meet for 2025-'26, even though Fair Grounds has not asked for dates. Under state law, any licensed track awarded dates must run those dates – barring severe economic problems – or face economic consequences, racing commission chairman Edward J. Koehl Jr. said. 'You have to show financial distress,' Koehl told Shariff."We are not accepting the race dates," Shariff said.Koehl said the commission would hold another meeting on June 15 once the legislative session ends.