Kentucky's racetracks and breeding industry face increased threats from Pennsylvania and Indiana, which have recently expanded gambling, according to figures compiled for a task force on racing.
"If you want to know how other states are going to go after us, it will be through purses," said Nick Nicholson, Keeneland president, to a panel on industry finances.
The panel is part of a task force appointed by Gov. Steve Beshear to look at ways to help horse racing. The task force is to make recommendations to Beshear by Dec. 1, but it is unclear what revenue-generating ideas might be forthcoming.
Indiana began allowing slot machines at race tracks this year, and Pennsylvania expanded gambling in 2006. Both states are using gambling revenue to support horse racing and breeding.
Nicholson said that Kentucky has held its own, but that is unlikely to continue. "There is nothing positive that we can gather from this about Kentucky's status quo," he said.
Ron Geary, who bought Ellis Park racetrack in Henderson in 2006, said the unexpected competitive pressure from Indiana and Pennsylvania has sunk his three-year plan. "I would be on track to break even (next year) ... Now it's an absolute matter of survival."
Purses boosted by expanded gambling hurt Ellis this summer, but "2009-2010 are going to be devastating," he said. "This is just the impact on tracks. The breeding will follow."
Purses in Indiana are expected to more than double, from about $13.5 million in 2006 to $28.3 million in 2009. Purses in Pennsylvania, which added Presque Isle Downs racetrack this year, will quadruple, from about $41 million in 2006 to $166 million in 2009.
Almost 1,700 Kentucky-based racehorses shipped to Hoosier Park to race this year, Nicholson said.
According to figures released by The Jockey Club on Friday, both Indiana and Pennsylvania are seeing double-digit growth in their breeding industry, while the rest of the country is losing mares and stallions. Kentucky still dominates Thoroughbred breeding, but the state had fewer mares bred this year for the first time since 2002.
Thoroughbred trainer John Ward called the financial figures "bone-chilling."