Racino Slot Revenues Dive in January

Updated May 8, 2014 at 4:58 PM For April Results

According to the figures released by the Indiana Gaming Commission, slot revenues at the two racinos dropped dramatically in January. Even considering that slot revenues have been running below the prior year's figures, the severe winter weather during the month was no doubt a significant contributor to the decrease. In the month of January, slot revenues at Hoosier Park produced $13.3 in adjusted gross receipts (AGR) which is the magic number from which support to horse racing is calculated. To compare, in January of 2013, AGR at Hoosier Park was $17 million which makes this year's January down almost 22% from last year! The January figures were the worst full month of revenues from slots that Hoosier Park has ever experienced.

At Indiana Grand, this year's AGR was $15.56 million in January which is down from $19.1 million in 2013 for a drop of 18.5%. January's performance was the worst for Indiana Grand since they moved from their temporary facility in 2009. The results at both racinos could very easily impact racing in 2014 for all breeds.

As an example, even if both racinos are able to match 2013 revenues for the rest of the fiscal year (through May's results), which they had not been doing, the thoroughbred purse account revenues would be projected to receive $580,000 less than from the prior year's results. Given the change in the flow of slot revenues beginning in 2014, which will be explained further in an upcoming newsletter, in our example, revenues to the thoroughbred purse account from Hoosier Park would decline by $1.1 million with amounts from Indiana Grand increasing by $520,000. Considering that race days are set, a $580,000 net loss or more may impact the planned purse levels as well as the number of races run in 2014.

March 7, 2014 Update: According to a few attendees at the most recent Indiana HBPA meeting, which was held on February 24th, the numbers from this short article were used during the meeting to update the board. While we are flattered, we've also been told that board member Kim Hammond didn't trust our numbers and wondered why the Indiana HBPA was using them. Well, we wonder about that too, but any time she would like to submit her evaluation to us, we'll be glad to publish her thoughts, unedited on our website.

March 10, 2014 Update: With figures released today by the Indiana Gaming Commission, the February results for the two racinos were mixed with AGR at Indiana Grand increasing slightly (2.5%) over February 2013 with Hoosier Park coming in 6.6% less than the prior year. Assuming, again, that the final few months of this fiscal year could simply repeat 2013 revenues, the loss to the thoroughbred purse account would now be $590,000 for the fiscal year. The contribution from slots at Indiana Grand would go up by $536,000 while the contribution from Hoosier Park would drop $1.126 million.

April 8, 2014 Update: Today, the Indiana Gaming Commission released the slot results for the two racinos for March which indicate that revenues at both locations are down when compared to March, 2013. The AGR at Indiana Grand was down slightly with a drop of 1.18%. The significant declines at Hoosier Park continued with a drop of 6.25% when compared to last year's results for March. The net effect, of course, is less money toward racing. Continuing the example of the thoroughbred purse account, the decline in the current fiscal year would now expand to approximately $640,000 less in purse funds. Again, this is assuming that the last couple of months of the fiscal year have revenue flows at least as good as in 2013 which hasn't happened yet in 2014.

May 8, 2014 Update: The trend of 2014 slot revenues at the two racinos under performing 2013 results continued in the month of April as revenues were down again at Hoosier Park (-4.01%) and at Indiana Grand (-5.00%). Each month since February we've projected how these year-over-year declines would impact the thoroughbred purse account. We've done this by completing the balance of the fiscal year with the assumption that slot revenues would at least equal 2013's results for the remaining months. So far this year, slot result have not had one single month equal to or greater than when compared to 2013. Therefore, our projected decline in slot revenues to that purse account has gone from $580,000 to $590,000 to $640,000. With one month of slot revenues left to be credited in the State's fiscal year, and using that same projection method, the impact to the thoroughbred purse account now stands at a decrease of $697,000 which is a decrease of 4.66% from 2013.

In addition, and using the same projection methodology, the impact to the thoroughbred breed development fund is projected to be a decline of $479,000. When added the purse account decline to the breed development fund decline, the total decline in funding to thoroughbred racing is projected to be $1,176,000. Welcome to affects of the slot law that was passed in 2013!

June 12, 2014 Update: According to the Indiana Gaming Commission, strong results in May from the slot machine revenues at Indiana Grand and Hoosier Park produced the only month in the current fiscal year that exceeded the same month in the prior fiscal year. May revenues, which are due to purse accounts and breed development funds by June 15th, are the last month in the State's current fiscal year which ends on June 30th. Slot revenues at Hoosier Park and at Indiana Grand were up 12.3% and 6.2% respectively over May 2013. Even with a strong May, overall, slot revenues were down for the year.

To put this in perspective of the thoroughbred purse account and breed development fund, revenues were down 4%. In fiscal year 2014, slot revenues will produce $593,963 less to the thoroughbred purse account than in fiscal year 2013. The thoroughbred breed development fund will receive $408,222 less for a total impact to thoroughbred racing of just over $1 million.