Here’s another story about another horse racing track – Retama Park, which is northeast of San Antonio in Selma – hoping to hit the jackpot (as it were) with slot machines. The bit that interests me is this:
If slots pass, [Retama CEO Byron] Brown envisions a massive transformation at Retama with an investment of more than $200 million in new facilities, gaming terminals and other amenities.
Still, that isn’t likely to happen until late 2012 at the earliest if slots are approved. Approval requires a vote of two-thirds of the Legislature, with voters getting the final say.
It’s not clear what would happen to Retama if slots don’t pass. Gary Baber, board chairman of track owner Retama Development Corp., a municipal subdivision of Selma, fears it could become home to a flea market or motor racetrack.
Built in the early 1990s for a reported $80 million, Retama Park had trouble right out of the starting gate. It missed financial projections its first year and landed in bankruptcy a year later in 1996.
Joe Straus Jr., who is the father of Joe Straus, the speaker of the Texas House, is part of the group that got Retama built. Straus blamed the arrival of the state lottery, the rise of Internet gaming and the spread of eight-liner slotlike machines for hampering the track.
While Retama Development emerged from bankruptcy, it didn’t shed its financial problems. Since its reorganization, it has ended every year in the red. In each of the past 13 years, auditors have cited Retama Development’s recurring losses and growing liabilities for raising “substantial doubt about Retama’s ability to continue as a going concern.”
“It’s kind of a minor miracle, in my opinion, that we have kept (Retama) alive as long as we have,” Baber said.
I had thought that maybe the racetracks might have a bit of an edge in the forthcoming gambling expansion fight on the grounds that they could install slot machines and start generating revenue for the state a lot faster than casinos, which would have to be built from scratch. But if Retama is typical, then that isn’t necessarily the case. Point being, and I want to commend Sen. Rodney Ellis for being clear about this when I interviewed him, whatever the potential long-term revenue from expanded gambling may be, there will be almost no effect on the next budget.
I got a good chuckle out of Straus’ daddy’s excuses for Retama’s lack of profitability. I mean, the Lottery was created in 1991, five years before Retama was built. I suppose it could have had an effect on their bottom line, but it’s not as if they never saw it coming. Really, they should have seen the threat from online gambling back in 1996, too, but that’s a more understandable oversight. I have to ask, though – if online gambling is keeping people away from the tracks now, how much would the addition of slot machines really change that?
Retama is an example of an industry, once touted as a financial savior for Texas, now in deep distress. Yet here it is, touting the addition of slot machines to their businesses as an savior for Texas, and by the way for themselves. You do have to admire the tenacity, I’ll say that much.