Fate of dog racing in RI takes another twist

Fate of dog racing in R.I. takes another twist
01:00 AM EDT on Tuesday, July 28, 2009
By Katherine GreggJournal State House Bureau
PROVIDENCE — When legislative leaders decided not to return to the State House this week to override the governor’s vetoes, they cleared the way for the bankrupt Twin River track-and-slot parlor to suspend live greyhound racing in mid-season — as planned — on Aug. 8.
But that may not be the end of dog racing in Rhode Island.
The General Assembly’s Democratic leaders still seem intent on overriding Governor Carcieri’s veto of a bill requiring a full 200-day racing season at the track when legislators return in early September, and possibly as early as Sept. 2. The dog races would presumably resume at that point.
But there is a lot of time between now and then for the owners of the Lincoln gambling facility to file in U.S. Bankruptcy Court a long-anticipated — and possibly imminent — motion for relief from a contract requiring them to pay a $9-million annual subsidy to the current group of dog owners who have banded together as the Rhode Island Greyhound Owners Association. About $5.5 million has been paid so far. Asked what might happen if a judge voids the contract and the lawmakers subsequently require a full season of racing, Twin River spokeswoman Patti Doyle on Monday raised the possibility that the consortium known as BLB Investors that owns the gambling hall would resume the races with a less-expensive cast of dogs.
She offered no specifics, but dog racing has already effectively ended in New Hampshire, and will end in Massachusetts on Jan. 1, leaving dog owners across the region in search of new venues.
In Rhode Island, wagering on “simulcast” showings of out-of-state races drew $30.9 million last year, more than double the $13.2 million bet on the live races offered every Monday, Wednesday, Friday and Saturday. Simulcasting is offered every day except Tuesdays.
The owners blame their financial arrangement with the dog owners’ association for some of the money troubles, since the racing nets them only $1.75 million, not nearly enough to cover the $2.5-million expense or the $9-million subsidy they are currently obligated to pay the greyhound owners.
If freed from the contract with the owners association, but forced to continue the racing, Doyle said: “BLB, legally, would be within its rights to seek less expensive racing options — another ownership group — or to manage the dog-racing aspect themselves … We are talking about possible scenarios so, again, I do not have specifics … But certainly, there may be dog owners and dog-owner associations interested in racing in R.I., at a lower price.”
Twin River is operated by a subsidiary of BLB Investors, a holding company made up of Kerzner International Ltd., the Waterford Group LLC and Starwood Capital Group.
After defaulting on more than a half-billion dollars in loans, the owners filed a petition for Chapter 11 bankruptcy protection last month under terms that would require them to relinquish ownership to their lenders, which include the Merrill Lynch Capital Corp.
The 4,700-plus video-slots placed at Twin River by the state Lottery are the big moneymakers for the owners, the state (which gets close to 60 cents out of every dollar that Twin River wins away from its losing players) and a group of machine suppliers that includes Providence-based GTECH Corp. The Narragansett Indians and the Town of Lincoln also get shares.
Even if the racing comes to halt on Aug. 8, RIGOA spokeswoman Jennifer Bramley said: “Everybody will actually stay in place. So the kennel owners and the workers in the kennels will remain at the track and we are hopeful that when the legislature does convene in early September that they will see fit to override the governor’s veto … [and] we would continue racing under our present contract.” Governor Carcieri had this perspective: “The good news is the longer they leave the Twin River legislation alone, then perhaps the bankruptcy judge will sort this out and do what we had wanted to get done.”
House leaders have not responded to questions, since the General Assembly went on hiatus, about the vetoed bill sponsored by Sen. Frank Ciccone, D-Providence, to require a full 200-day racing season, while allowing overnight gambling at Twin River seven days a week.
But Senate Majority Leader Daniel Connors, D-Cumberland, said an override vote is likely regardless of events outside the legislature’s purview, such as the bankruptcy court proceedings. But Connors said the senators are less concerned about which dogs race than they are about the 225 jobs the greyhound owners say are at risk if live racing is eliminated entirely. Without the legislation, he noted, the Town of Lincoln would lose the extra $784,458 one-year shot of video-slot revenue that lawmakers promised last year as compensation for allowing overnight gambling, over town objections, on weekends and holidays only. Lincoln is in his district.
The next bankruptcy court hearing has been scheduled for Aug. 18. It remains unclear who will run Twin River after the lenders seize control. Harrah’s Entertainment has expressed an interest.
Doyle said the current owners “remain committed to Twin River and Rhode Island and if there is any feasible avenue available for them to stay involved, they would certainly welcome that.”
— With reports from Cynthia Needham
kgregg@projo.com

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