Kentucky Derby Day: Horse racing fans — some donning extravagant hats and sipping mint juleps, others studying the Daily Racing Form — gather at racetracks and other venues to watch.
No traditional Derby party is taking place at Les Bois Park this year. The lights are out, the doors and gates locked.
Typically the park’s 800 stables would be filled by this time with thoroughbreds and quarter horses swishing their tails, stamping their feet and tossing their heads in anticipation of their next go around the track. Owners, trainers, jockeys, exercise riders and veterinarians would be buzzing about. The track would be busy from dawn to noon with a steady stream of training sessions.
But now the stalls sit empty, the track’s dirt untrammeled by hoof prints. There will be no bugler’s call to the post this summer.
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“Yes, Les Bois really is shut down,” said John Sheldon, president of Treasure Valley Racing, which leases the 63-acre racetrack and Turf Club from Ada County.
PULLING THE PLUG: DEATH KNELL FOR RACING
Mark Hanson was removing his family’s belongings from their stables at Les Bois last month — horse walkers, racing equipment and other accoutrements that his family has had there off and on for more than 20 years.
Hanson, 25, a second-generation horse racer who lives in Pocatello, grew up spending his summers at Les Bois with his family.
“Les Bois was my home away from home,” Hanson said. “My earliest childhood memories are of that track.
“We’ve been involved in racing as long as I can remember,” he said. “I have been very involved myself since high school. My father and brother have been very involved. They are both jockeys; they are both trainers. We own horses. We breed horses. … This is what my family does for a living.”
Now the family is hauling its horses out of state to race, though they are still taking part in the handful of Idaho races slated this season at smaller tracks.
“If Les Bois does not reopen, we will definitely scale back,” he said. “I do not know if we would relocate to another state. I am from Idaho. This is my home. This is where I grew up. I would certainly rather stay here.”
The reason for the track’s closure sits in Les Bois’ darkened Turf Club: 200 unplugged historical-racing machines. Two million dollars’ worth of newfangled wagering machines brought in two years ago to save live horse racing in Idaho.
We could see that historical racing was working, that we could turn Les Bois into what we always thought it could be — a premier racetrack in the Northwest.
Treasure Valley Racing President John Sheldon
Historical racing, also known as instant racing, allows wagers to place parimutuel bets on horse races run in the past and replayed on the machines without identifying information. Along with their spinning wheels, sounds and animations, the machines have a small screen to display the replays.
Sheldon explains how historical racing could save live horse racing in Idaho: The additional revenue would be used to increase purses, or prize money, and improve the track. Bigger purses and a better track would draw more and better-quality horses from Idaho and other states. Increased purses would help cover the cost of owning, training and racing horses.
“Horsemen have been running for the same size of purses as they were in the 1980s,” said Mike Clements, president of the East Idaho Horsemen’s Association. “The problem being that the cost of running has steadily increased, but the purses have not. The last couple of years has been the exception to that.”
The machines were lucrative. During the 16 months in 2014 and 2015 that they were legal and operating at Les Bois, bettors wagered $127.5 million, an average of nearly $2 million a week. In comparison, total live and simulcast wagering at Les Bois in 2014 and 2015 totaled just $17 million.
But two years after approving historical racing, lawmakers repealed it. Some lawmakers said they felt duped, because the historical racing machine that was characterized for legislators in 2013 is not the machine installed at three racetracks in 2014. Those machines resemble slot machines more than video-replay devices.
Once historical racing got under way, live racing purses went up.
Purses awarded at Les Bois in 2012 totaled $1.3 million, with an average purse of $4,053. In 2014, the first year with historical racing revenue, Les Bois’ purses increased 72 percent to $2.3 million, with an average purse of $8,285.
“The bottom line is the purse structure is what attracts people to a track if you are talking about professionals who do it for a living,” said Marta Loveland, a former jockey who is president of the Idaho Horsemen’s Benevolent and Protective Association. “In order to draw professionals here, that would be a minimum $5,000 purse.”
Clements, who lives in Idaho Falls and raises and races thoroughbreds and quarter horses, said that with the influx of historical racing money into the track’s purse structure, “horsemen were finally starting to see what it should be like with purses that make it worth the cost of breeding, raising and training a race horse in Idaho.”
“Now with that gone, horsemen will be back to running for much smaller purses at the smaller tracks,” Clements said. “Les Bois is the showcase track in Idaho, which means that it is also the track generating the majority of the revenue that helps create the purse money allocations for the remaining small tracks. It will be very difficult for the remaining small tracks to generate enough purse money to continue to draw the interests of horsemen without the economic purse structure boost that Les Bois provided.”
I am very discouraged. Having gotten a taste of what it could be like in the state of Idaho with historical racing, and then losing it, is like being kicked in the belly.
East Idaho Horsemen’s Association President Mike Clements
Under state law, 89 percent of money bet on historical racing must be returned to the bettors. With live and simulcast wagering, depending on the wager, between 75 percent and 82 percent of money bet must be returned to bettors. State law also requires that specific percentages from each of these wagering pools go to the state racing commission, smaller tracks and other horse-related funds.
In 2015, after the payouts and state-mandated distributions, Treasure Valley Racing received $2 million of the $38.8 million bet on its historical racing machines. In 2015, the company received $4.5 million of the $88.7 million wagered.
But that money was not enough to turn a profit for the company, which is owned by a group of local breeders, owners and enthusiasts. They include rancher Harry Bettis; Idaho Timber Co. founder Larry Williams; Linda Yanke, of Boise's Yanke Machine Shop; Robert Rebholtz Jr., of Agri-Beef Co.; and John Sheldon, an engineer.
Since taking over Les Bois track in 2011, Treasure Valley Racing has lost about $1 million annually. In addition to resurfacing the track, it spent $2 million remodeling the Turf Club and adding a parking lot.
It is pretty sad to see a sport like this go down the tubes in Idaho. ... Just the thought of it being gone is tough. People love Les Bois Park. That is the part the legislators do not get. They thought that they were being duped, that we could pull the wool over their eyes and make all this money, and all of us are going to be filthy rich. We were just hoping to keep the sport going.
Former jockey Marta Loveland, president of the Idaho Horsemen’s Benevolent and Protective Association
In 2014, which included the first seven months of historical racing, the business reported a $1.6 million loss. In 2015, which had nine months of historical racing, Treasure Valley Racing reported a $47,859 loss. If historical racing had not been repealed, Treasure Valley Racing in 2015 would have made a profit for the first time, Sheldon said.
That profit likely would have been reinvested in the track, he said. The stables need to be upgraded, the track needs a new rail, the grandstands need new restrooms, the Turf Club a new kitchen.
“We need so many things,” Sheldon said.
“I do not know how we would start up again unless somebody comes up with a solution to provide revenue, some alternate revenue source,” Sheldon said. “At this point we are in the process of trying to sell everything ... from the forks, knives and spoons to the tractors.”
Also for sale: 200 historical racing wagering terminals.
Treasure Valley Racing is keeping its lease with Ada County until it can sell the terminals, according to Sheldon.
“We have been beating the bushes trying to find buyers and trying to maximize the value of the few assets we have,” he said.
COMPETING FOR GAMBLERS’ DOLLARS
When the repeal went into effect in September, Idaho State Racing Commission Chairman Paul J. Schneider, a popular Boise radio talk-show host, called it a “death knell” for horse racing in Idaho.
While the ban may have been the final blow, the knell started ringing nearly three decades ago.
“Since the inception of the Idaho state lottery [in 1988], horse racing has been on a steady decline,” Clements said.
Besides the lottery, a slew of other options now compete for gamblers’ dollars: tribal casinos, expanded lottery options, online horse wagering, online fantasy sports betting and online casinos.
With online horse race wagering, bettors no longer have to go to the race track — all they need is the internet, Sheldon said. “You can sit on your couch or be on the golf course and bet,” he said.
Sheldon said he thinks some lawmakers were swayed by the machine’s cosmetics — what they look like on the outside, not the parimutuel betting system inside.
In parimutuel wagering, players bet against each other rather than against the house. Parimutuel wagering is the only form of betting allowed under the Idaho Constitution, which bans casino games, slot machines or simulated slot machines.
“Horse racing is parimutuel. It was never considered a casino game,” Sheldon said.
“These machines are parimutuel machines,” Loveland said. “You can say, ‘Yeah, they look like slot machines.’ You can also say, ‘Yeah, they look like video arcade games.’ Depends on what argument you want to have.”
No Idaho court has ruled that historical racing machines are illegal or violate the state’s constitution.
Loveland and Hanson said some lawmakers opposed historical racing because it expanded gambling in the state. The state authorized historical racing at only three tracks: Les Bois, Sandy Downs in Idaho Falls and Greyhound Park in Coeur d’Alene.
“How can the Idaho state lottery put terminals in convenience stores, restaurants and gas stations and not call it expanded gambling?” Hanson asked.
In 2011 the Idaho Lottery added paperless touch-screen machines.
With both historical racing and lottery machines, “I put money in the machine, push a button and find out if I win,” Hanson said. “How is one constitutional and one isn’t?”
In the 2016 session, the Idaho Horse Council, a coalition of horsemen, pitched a bill to create a state gaming commission that could allow the return of historical racing machines. The first legislative committee to consider it refused even to print the bill.
Sheldon said there is a chance of trying again next session. “But I do not see our group doing it. The horsemen brought a good bill … we could not even get a hearing,” he said. “There was support on that committee. But to stop a print hearing – why? What are they afraid of here? At least have some healthy public debate about it, the pros and cons of the issue. Rather than just shut it down.”
Hanson hopes there is a chance historical racing can return to Idaho.
“For horse racing to flourish, live racing alone is not going to do it,” Hanson said. “I hate to have to say it, but we need this to survive.”
Les Bois: $50 million economic impact
Les Bois Park in 2015 had 285 employees with an annual payroll of $2.8 million.
In addition to employees, Les Bois also generates business for trainers, jockeys, veterinarians, farriers, feed and tack stores, hay farmers, hotels and restaurants.
An economic impact analysis conducted by Boise State University’s Department of Economics found the direct and indirect economic impact of Les Bois Park on the Treasure Valley in 2015 included:
▪ $9.9. million in total compensation for 535.7 full- and part-time employees
▪ $35.1 million in sales of goods and services
▪ $5.1 million in other forms of income (i.e. rent, interest, profits, taxes)
“The loss of Les Bois Park would adversely affect the local economy,” concluded the study, which Treasure Valley Racing commissioned from Boise State for $5,000.
D&B Supply, just across the Boise River from the racetrack, has been a frequent and popular stop for horsemen since it opened in 1995.
Les Bois’ closure “is a big change to our business,” said manager Shane Branch, who has been with the Glenwood store for 15 years. “We are readjusting, but we are strong enough to absorb it.”
“I just cannot emphasize enough how much this really hurts us,” said Marta Loveland, a former jockey who is president of the Idaho Horsemen’s Benevolent and Protective Association. “People that are from out of state, when they come in to run their horses, they will spend a lot of money. They will rent a hotel suite. They eat in restaurants. They come to watch their horse run. They have a good time. They go home happy or sad depending on how their horse ran, but it brings them into the state.”
“I’ve heard some people say, ‘Well, those dollars that people spent, they’ll spend anyway on other things.’ No they won’t, because they will not be here. They are not going to come here if their horse is not running.”
What’s next for Les Bois?
While a darkened racetrack is a letdown for horse racing fans, Garden City Mayor John Evans sees it as a boon for Garden City. He would like the county-owned property, which is adjacent to the Boise River and encircled by Garden City, to go to the city or to developers.
Treasure Valley Racing signed a five-year lease renewal that went into effect Jan. 1. The agreement said that if historical racing were not legalized, Treasure Valley Racing would pay the county $75,000 a year but could terminate the lease with 30 days’ notice. If historical racing were legalized, the rent would increase to $130,000 this year, and lease termination would require six months’ notice.
Treasure Valley Racing has not told the county it is terminating the lease.
“Since Treasure Valley Racing still holds the lease to the property, Ada County is in a holding pattern,” said county spokeswoman Kate McGwire. “All options are on the table, but nothing has been decided for the short term. Once the county gets through the summer concerts and the fair, that might be the time to look at this issue more closely.”