New Era Dawns in Virginia

By T.D. Thornton 

The horse racing landscape in Virginia shifted significantly July 1 when new state racing statutes went into effect to turn over simulcasting privileges and profits from closed Colonial Downs, which has not held a Thoroughbred meet since 2013, to a newly recognized a non-profit alliance between the state's Thoroughbred, Standardbred and steeplechase racing interests. 

But even though Wednesday marked the official date of the changes in the state's racing laws, the Virginia Horsemen's Benevolent and Protective Association (VHBPA) and the relatively new Virginia Equine Alliance (VEA) have been working for months on both short and long-range plans to establish a self-sufficient series of Thoroughbred meets in the state that could be folded into a larger regional circuit. 

According to Frank Petramalo Jr., executive director of the VHBPA, near-term goals over the next 90 days include finding a suitable turf course to run a brief flat race meet, opening the first of what could eventually be 10 off-track-betting locations in existing sports bars around the state, and the one-year shifting of Virginia's six state-bred stakes races and four signature graded stakes races to Laurel Park in Maryland. 

Wednesday, the Virginia Racing Commission (VRC) granted of permission to move four graded stakes–the GII Virginia Derby, GII Virginia Gold Cup (for steeplechasers), the GIII Virginia Oaks and GIII Edward P. Evans All Along S.–out of state for one year. 

In a story the TDN reported in April, one bone of contention between Colonial and the VHBPA had been Colonial's desire to run a single blockbuster stakes weekend in 2015 built around those graded races. The VHBPA, at the time, strongly disagreed with that plan, claiming that budgeting so much money for graded stakes (that would likely be won by non-Virginia horsemen) was at odds with the VHBPA's goal of supporting “bread-and-butter” racing at the lower end of the purse structure. 

Petramalo said Thursday that the package of four graded stakes would likely have an aggregate purse of $900,000. Part of the VEA's negotiations with the Maryland Jockey Club (MJC), which owns Laurel, is to have the MJC split the cost. But that still means $450,000 would be leaving Virginia to potentially benefit outside horsemen. 

Both Petramalo, and Bernard Hettel, the executive secretary of the VRC, said the outflow of purse money was preferable to losing the graded status of those races and leaving Virginia without marquee events if and when racing returns to the state in 2016. 

Hettel said the VRC backs this move. “There is some desire to maintain the grading,” Hettel said. “This would have been the second consecutive year of non-performance, which would have been an absolute losing of the grade.” 

MJC vice president and general manager Sal Sinatra confirmed funding for the graded stakes package would be a 50/50 split, pending the approval of Maryland horsemen. He said this is an expense the MJC is willing to pay for because it contributes to the MJC's eventual goal of having higher-class year-round racing in the region. 

“They're still trying to preserve Virginia racing, so I try to help them as best I can,” Sinatra said. “The way it's planned right now, we first have to make some sort of arrangement with Delaware, because they're a bigger party, if you will, to what could be a 'DEL-MAR-VA' circuit. Virginia is going to be a smaller slice, but we're trying to work all of us three together.” 

Petramalo said Colonial Downs owns the trademark to the name “Virginia Derby,” so a rebranding would be necessary for the proposed $400,000 race, which would be rescheduled from its former July date to September or October. 

“So what we'll likely do is rename those races with 'Old Dominion,'” Petramalo said. “So it will be the 'Old Dominion Derby,' the 'Old Dominion Turf Cup,' etcetera, presented by the Virginia Equine Alliance. Something like that.” 

The rules are not crystal clear on whether the renamed and relocated race would retain its grade. According to the Thoroughbred Owners and Breeders Association guidelines for the American Graded Stakes Committee, “if a graded or eligible race is altered materially in age, sex, eligibility, racetrack location, or purse, or is substantially changed on the calendar (60 or more days), this will prompt a review and may result in a change in grade.” 

“Our first priority is finding a site for some flat racing,” said Petramalo. “We're close there. I would not be surprised if in the next month or two we turned our energies to opening up the system of OTBs.” 

The scouting for new race meet locations and the preparation for eventually taking control of the state's OTB network have been in the works ever since the VHBPA and Colonial failed to reach a lease agreement earlier this spring. And in 2014, six Virginia-bred stakes races were run at Laurel, so that aspect of the plan is not new. 

The VEA now has statutory authority to run race meets and up to 10 OTBs in the state. Colonial previously had a simulcasting exclusivity, but the track surrendered its live racing license, then shuttered its OTBs, last autumn. This prompted the passage of new legislation to grant those rights to a non-profit horsemen's entity, which the state now recognizes as the VEA. 

Petramalo said based on a projected $50 to $70 million simulcast handle in 2015, the VHBPA will add another $2.5 to $3 million to its coffers this year, derived from a state-mandated 5% share of the handle. The VEA, he said, separately garners 4% of the simulcast handle; this is money that formerly went to Colonial for operating its OTB network. 

“Remember, while I don't want to necessarily give out specific numbers, we didn't race in 2014,” Petramalo said. “So sitting in our bank accounts is all of the purse money that we would have spent last year. We're not in bad financial shape.” 

“We're not looking to open up the same ones that Colonial had,” Petramalo said. “What we're looking at is a new business model. The old model was building stick-and-brick stand-alones. We think it's more economically feasible and profitable to set up an OTB in an existing sports bar, and then we wouldn't have to start from day one building a facility. 
Our goal is probably to come up with something like Kentucky Downs, where you have all turf racing in a large, rolling course in the countryside.” 

Colonial, Petramalo said, is totally shut down right now and it won't resurface as a possible location for a race meet. 
Representatives from Jacobs Entertainment, which owns Colonial, did not immediately reply to a request for comment for this story.