“We are turning the racino industry around,” says Robert Moser, president of the Nebraska Horseman’s Benevolent & Protective Association (HBPA).
With WarHorse Gaming, a subsidiary of the Winnebago Tribe’s Ho-Chunk Inc., the association will take advantage of an initiative approved in November that will let them build a $200 million casino, hotel and event center at Lincoln Race Course, in the state capitol.
Many racinos have tried to fight the decline of the sport, but Nebraska horsemen have come up with a plan that may turn the tide. If successful, it will stabilize the horseracing industry in the Cornhusker State and enable members to make a living there.
“I believe we’re starting a brand new model that—to my knowledge—has not been tried anywhere, where a nonprofit horseman’s group owns the racetrack and hires the casino, which operates and dedicates their revenue towards the purse structure,” he told GGB News.
Moser’s father owned and bred thoroughbred racehorses, and he grew up with a “love for the game.” He can’t remember a time when the family didn’t have a mare at home and a couple of racehorses at the track. So he is strongly and personally invested in the plan, which includes a 165,000-square-foot casino complex with a gaming floor, event space, dining facilities, a 196-room hotel and a parking structure for 1,500 vehicles.
The city of Lincoln has a height restriction meant to prevent any structure from competing with the 400-foot state capitol building. The horseman’s group seeks a waiver to allow their hotel to be seven stories, which would make it the tallest building outside of downtown Lincoln. Some hotel rooms as well as the rooftop pool would have a view of the recently completed 7/8-mile racetrack.
Casino gaming is so new in Nebraska that a casino can’t actually open until the new Nebraska Gaming Commission is formed. Lance Morgan, president and chief executive officer of Ho-Chunk, estimates that gaming could be offered later this year, with the actual casino construction beginning next year.
HBPA represents the majority of thoroughbred horse owners in the state. “We own the racetracks in Omaha and Lincoln,” said Moser. “We sponsored this legislation to allow the casinos at the racetracks. That right there puts the racetracks and in particular the horsemen owned racetracks as the landlords in the relationship. Any other racino that’s ever been tried, the horseracing gets treated as a second-class citizen.”
He added, “Our casino partners own all the rights to the casino revenues. They pay us rent which won’t be paid back to shareholders. It’s going to go directly into the racing purses. We are a nonprofit that wants to make sure our horsemen have a place to race.”
Historic Tradition
Horseracing began in Nebraska in 1917 and the HBPA was formed in 1967. In 1995, it started buying racetracks after the close of the Ak-Sar-Ben Race Track (the name was Nebraska spelled backwards).
“It was one of the Top 5 attended racetracks in the country,” recalled Moser. “It would attract Top 5 mutuel handles, but the Knights of Ak-Sar-Ben Foundation ended up selling it to Douglas County, which sold it to private enterprise. It’s the same story that you hear with Hollywood Park, with Arlington—the property becomes too valuable, and you have to give shareholders a (return) on their investment.”
After Ak-Sar-Ben was sold, HBPA bought Horsemen’s Park in Omaha. “In Lincoln, we had State Fair Park,” said Moser. “That lease was bought out from under us, so we bought land on the southern edge of Lincoln and built a racetrack and simulcast facility.
“For the last 25 years, the horsemen have been trying to expand gaming to support the industry. About six years ago, we came up with the idea of allowing the casinos specifically at the racetracks, and selected Ho Chunk as a partner to help us get this legislation past the finish line.”
Moser likes the comparison between what his association is doing and the Green Bay Packers, which is owned by its own fans, not a corporation whose first duty is to shareholders.
He said choosing the right casino operator was “paramount in making this work. We feel very lucky having found Lance Morgan and Ho Chunk Inc. to partner with, because they share a lot of our same goals, and are as willing to work to make us succeed as we are to make them succeed. This arrangement won’t work if you just select any old partner.”
Ho Chunk Inc. also wants to keep the money in Nebraska. As Moser explained, “Anyone who’s been in Omaha knows that three casinos right across the river take $800 million out of Nebraska.” Those casinos are the Horseshoe, Ameristar and Harrah’s, all in Council Bluffs, Iowa.
“We want to keep that money, those jobs—and most importantly—that tax revenue in Nebraska.” Last November, voters agreed with that argument.
The Lincoln model could be adopted at all six racetracks in the state. Warhorse also owns Atokad Downs in South Sioux City and Horseman’s Park in Omaha. Other racetracks are Fonner Park in Grand Island, Columbus Races in Columbus, and Fairplay Park in Hastings. For each facility with a racing license, the State Gaming Commission will have the ability to issue a gaming license to a casino operator within the confines of the racetrack grounds, said Moser.
Shared Benefits
Keeping the resulting revenues at home could help bring about something akin to a renaissance of horseracing in Nebraska. That is the hope. How much purse money will be generated? “Between Omaha and Lincoln, I’m guessing initially $18 million to $20 million,” said Moser. “I could see that growing to $30 million. It all depends on how successful the casinos are. We’re committed in helping Ho Chunk succeed in their casino endeavors, because that’s going to help us in racing.”
Larger purses are key to reviving the industry. “The larger the purse structure, the higher quality of horse you are going to attract,” said Moser. “My goal as president of the HBPA is to increase our number of race days, so our trainers and owners don’t need to leave this state to make a living. After we increase the live days and are racing a full year, then I’d like to increase the size of the purses.”
Here’s the dream as he described it: “Being able to make a living within a racing circuit that’s within an easy drive is a luxury a lot of horsemen don’t know. If we could establish that here in Nebraska, we would increase the quality of life for our membership.”
Right now, those members number about 300, but within two years, Moser expects that number to be “in the thousands. We want to attract horsemen to move into the state.”
Those who were around in the Ak-Sar-Ben days are expressing an interest in moving back, he said. “We’re attracting interest from people who race in neighboring states, and breed horses here. It’s going to be phenomenal growth for our industry.”
The rise of horseracing could have collateral benefits for other businesses, too. “We have a constant population of owners, trainers, grooms and jockeys,” said Moser. “They’re going to be visiting the local grocery stores, helping local gas stations, living in the economy in these areas where we have the tracks. Agriculture benefits. You increase the horse population by a couple of thousand. Race horses get treated like kings and queens—the finest alfalfa, the best hay, high-quality grains. It helps the agriculture industry with an additional market for their produce.”
A New Industry Framework
Nationwide, the racetrack industry has seen live race days decline, noted Moser. “A lot of it has to do with the way we manage our racetracks. Too many are corporate, and need to show a profit to their shareholders. Unfortunately, the live racing industry becomes a drag on the overall business model. It’s so much cheaper to offer advanced deposit wagering system or OTB, so the managers come under pressure from shareholders to cut costs, and the majority [of the cost-cutting] is in live racing.”
If the experiment at Lincoln Race Course succeeds, that way of managing racetracks could become a thing of the past.
