The Iowa Racing and Gaming Commission heard from a Kentucky consultant Thursday who has studied the impact of the horse racing industry on the state. The study by Richard Thalheimer was requested by the horse industry in the ongoing debate on whether slot machine revenues from the state’s only horse track are being properly spent in subsidizing horse racing in Altoona.
Thalheimer says the magnitude of the impact of the track was 123-million dollars and 2,200 full time equivalent jobs. He says other major findings were that the economic impact increases with the increase in the number of race days, it increases with the cost to maintain the horses, and the overall days the horses are at the stables.
Thalheimer says live horse racing also has an impact on the casino. He says there are two impacts, one is the betting of customers who come to bet on the horse races and the betting at other locations that simulcast horse races from Iowa all across the country. Thalheimer says the betting increases on simulcast races when live races are also running at the track. Secondly, he says the casino benefits from live racing.
Thalheimers says when there’s live racing, the slot machine wagers go up 13-percent. Thalheimer says the uncertainty of the number of race dates and future of horse racing has caused the investment in horse breeding to drop, which he says has impacted the economic impact. Thalheimer says his study found over 50% of the horse owners did not turn a profit in 2007.
Iowa Agriculture Secretary, Bill Northey, spoke to the commission and said the impact of the horse racing industry goes well beyond the suburban Des Moines track.
Northey says there’s an impact out in the countryside on farms that raise horses along corn and soybeans, and also those that just raise horses. "When you look at local communities and the impact of one or two or three horse farms in that community, it can be very significant," Northey says.
Northey says you have to look at the horse industry beyond gambling as one of the ways agriculture changed in the state following the farm crisis in the 1980’s. He says diversification came out of the 80’s with racing, ethanol production and wineries that were part of a change in mindset that said farmers could still grow corn and soybeans, but also do other things. Northey says $123-million doesn’t seem like much in a $20-billion state ag economy, but he says the industry has impact across the state.
Northey says while the immediate impact is in central Iowa around the track, this is even more important in a small community where a horse farm in a town of two thousand people buys lumber and other materials and hires kids to work on the farm. Copies of the full report are available on the Iowa Thoroughbred Owners and Breeders Association website .