COMMENTARY : Small Tracks Carry a Big Burden

Although the end of racing at Charles Town has stunned an entire community, the track’s demise can hardly be considered a surprise. In fact, it was surprising that Charles Town survived as long as it did, because such small tracks have become an anachronism.

There was a time, of course, when places like Charles Town were a cherished part of the American racing landscape. When I came to Washington in the 1960s, I regularly attended the races in West Virginia rather than Maryland; Charles Town and Shenandoah Downs treated their customers better, and they had an intimacy and charm the bigger tracks lacked. They were innovative too, pioneering wagers like the twin double that generated unprecedented excitement for bettors.

But the main reason for the prosperity of such tracks was that they operated in markets relatively free of competition for the gambling and entertainment dollar. They flourished until technology and television changed the world. Just as major-league baseball telecasts killed many of the minor-league franchises, so did the proliferation of off-track betting and simulcasting by major tracks hurt the small ones. The minor tracks were damaged too by mounting competition from other forms of gambling, such as lotteries and casinos.

When revenues decline, it is hard for the racing industry to act like other businesses and cut costs in order to survive. Racetrack plants are large and expensive to maintain; so too are their racing surfaces. And horses have to eat the same amount whether business is good or bad. So as Charles Town’s business worsened over the years, the sport was unprofitable for virtually everybody -- horse owners as well as the track’s owners.

The purses were so low, especially in the bottom-level races, that even reasonably successful horses couldn’t pay their own way. Trainer Lee Couchenour said: “I had a $2,500 claimer the other day who lost a race by a neck and finished third -- and he earned $200. That’s not enough even to pay the vet and the blacksmith. Maybe from 1 to 5 percent of the owners made a profit. A lot of them were leaving the game.”

Economist Maury Wolff marveled at Charles Town’s survival in the face of these harsh realities. “Small tracks are usually very important to their communities,” he said, “and Charles Town was the biggest employer in the county. A lot of people were willing to lose money in order to keep the game alive. A lot of them loved the sport and didn’t want to see the horses go to the killers.”

But a business needs more solid props than sentiment in order to survive over the long run. What can small tracks do in this grim economic climate?

Some, including Charles Town, have tried to bolster their business by offering simulcasts from major racetracks. The drawback of simulcasting is that customers simply shift their available money from the live product to the televised races, and the track’s bottom line doesn’t necessarily improve.

Some have expanded their business by exporting their races to an off-track or inter-track betting network. Penn National Race Course once seemed to have as precarious a future as Charles Town, but Pennsylvania created a statewide betting operation that has enabled Penn National to prosper. Charles Town could have survived if it had been in Pennsylvania rather than West Virginia.

Another possibility for racetracks is to offer other forms of gambling besides horse betting -- just as Hollywood Park has done with its poker club and Arlington Park wants to do with an on-track casino. This, of course, was the plan of Charles Town’s management, which wanted to install video lottery terminals (i.e., high-tech slot machines) at the track. When voters rejected that proposal, management announced the closing of the track.

Would slot machines have saved Charles Town? Wolff has studied the issue, and he said: “If you have a monopoly on slot machines, you’re obviously in a strong position. But when you’ve got one industry trying to prop up the other, you’ve got to ask the question: Why do you need the racetrack?”

It is hard to imagine that, over the long run, horse racing is going to survive if it is a money-losing proposition for everybody involved in the game. Even if Charles Town had gained permission to install the video-lottery terminals, it might only have been postponed the inevitable.