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As a result of the state's poor management of simulcast wagering there will be no horseracing this year at MetraPark, nor anywhere else in the state. The news is particularly disappointing, since the past two years, for Yellowstone Downs, have been the most successful since the organization assumed sponsorship of the annual event some 15 years ago.
But, without the subsidy generated by simulcast off-track betting in the state, Yellowstone Downs can't afford to sponsor the four-weekends of racing, as it has in the past. "We aren't going in, on the front end, knowing we aren't going to be able to pay bills at the back end," said Ben Carlson of Yellowstone Downs. "There is no way we could conduct races without normal funding," he added.
But, Yellowstone Downs has high hopes of being back next year. They have in fact already reserved dates at Metra Park for 2013.
According to Carlson, the organization of Yellowstone Downs is financially sound, and has enjoyed seeing horse racing make a gradual come back, since they took over its sponsorship from the county.
But, part of what has helped to sustain horseracing in the state has been the annual infusion it gets from fantasy sports and advanced deposit wagering. Yellowstone Downs got about $190,000, annually, to bolster purses and help pay for some of the administrative officials required by the state.
Those funds evaporated this year, under the claim by the Department of Livestock (DOL) that the Board of Horse Racing (BOHR) was $600,000 "in the hole" and any funds had to go to defray that debt.
An independent examination of the books indicate that there is no such loss, said Carlson, who pointed out that the agency has provided no documentation to back up their claims.
The situation was reported upon by Montana Watchdog recently, by Phil Drake. In March, he wrote, "A man hired to determine how the Montana Board of Horse Racing (BOHR) supposedly lost $614,249 in 14 months of horse race simulcasts said this week he had a mix of good and bad news.
"Tom Tucker, after spending 2 1/2 days pouring over materials, told Montana Watchdog, simulcasts did not lose $600,000. But, he said he still did not know exactly how deep the off-track betting operation was in the hole.
"Tucker, whose company previously ran simulcasting in Montana before the BOHR went with another vendor and then subsequently took it over, said he found bills — both payable and receivable — that have not gone through the system. And he said it's possible that some tracks could owe the state money.
'"There's some billing they need to do,' he said, estimating the amount owed could be as much as $50,000."
Officials reportedly cannot find six of the eight vendor contracts.
Last December, the Board of Horse Racing suspended simulcast in Montana for six months to investigate the situation. The suspension negatively impacted eight casino –type businesses in Billings, Butte, Great Falls, Helena, Kalispell and Missoula.
According to a later report from Drake, simulcast was returned to Montana, in May, "following the dedicated efforts of some horse racing enthusiasts who worked to secure a loan to cover the debt and to convince simulcast providers to give Montana another chance.
On May 17, Drake reported: Dale Mahlum, president of the Board of Horse Racing, told Montana Watchdog, it took "an awful lot" of persuasion to get some of the simulcast providers to take on Montana because of past problems with the state.
"The future of the state running simulcasting was in doubt until vendors who had offered the service before it was suspended stepped forward and said they would take over the business.
"Nick Alonzo, manager of Katie O'Keefe's Casino in Missoula, formed a company, Montana Simulcast Racing, to run the program and to contract with the providers.
"It's been a battle but I think we've won it," Alonzo said.
The board, administratively linked to the Department of Livestock (DOL), began managing simulcasting in November 2010, after ending its contract with Montana Entertainment, which took over in 2009. Prior to that, the state had a longtime contract with a nonprofit group, Montana Simulcast Partners, which reportedly had successfully managed the racing.
In March, the board approved allowing DOL staff to pursue a "loan" from the Department of Administration (DOA) to pay off the deficit, which had been estimated at one time to be $614,249.
Officials said the BOHR had to resolve the financial shortfall by June 30, the end of the fiscal year.
It has eight years to repay the loan to the state. At its April 2 meeting, the board asked staff to ask the DOA for a one-year extension on its first loan payment of $76,200..
The Big Sky Business Journal
P.O. Box 3262
Billings, MT 59103