Business Columns & Blogs

Bill Virgin: Turning 20, Emerald Downs stays healthy despite growing competition

Jockey Joey Steiner works a horse for trainer Sharon Ross at Emerald Downs in Auburn. Emerald Downs is, remarkably, celebrating its 20th birthday this weekend.
Jockey Joey Steiner works a horse for trainer Sharon Ross at Emerald Downs in Auburn. Emerald Downs is, remarkably, celebrating its 20th birthday this weekend. Staff file, 2015

Emerald Downs is celebrating its 20th birthday this weekend, an anniversary remarkable not just for the “Where did the time go?” aspect but also for the Auburn track’s ability to survive in an industry and a sport whose future is questioned daily.

Just getting the thing built, in retrospect, seems quite an accomplishment, given the travails over building a new basketball arena. At the rate things are going, Emerald Downs might be celebrating its 40th season before the Sonics, or some approximation thereof, return to town.

It will, that is, if horse racing is still around in another 20 years. Fashions in what leisure activities people watch wax and wane. You could make a case that, 70 years ago, the three biggest sports in this country were baseball, horse racing and prizefighting. Baseball endures, but these days the biggest news in boxing comes from the passing of one of its legendary figures.

And horse racing? It’s been fighting competition in every direction, including competition for sports fans’ attention in the form of the NFL and NASCAR. Horse racing was long the lone outlet for legal gambling (it also figured prominently in unsanctioned gambling, or so we’re told). The proliferation of government-operated lotteries and government-approved and -regulated casinos has diverted much of the American betting dollar. Washington State Gambling Commission statistics show horse racing accounted for 1 percent of net revenues of gaming activities in 2014, and tribal casinos had an 80 percent share of that $2.8 billion pie. In 1996, Emerald Downs’ first season, horse racing had a 5 percent share of a much smaller dessert of $476.3 million.

That competitive landscape isn’t going to get any easier. If government ever figures out how to get its cut from online gambling activities like fantasy sports betting and opens it up, that will drain even more money out.

So race tracks do what they can to diversify. In the Northeast, with smaller states and short drives to neighboring ones, there’s been a gambling arms race in which each state tries to one-up the others by bringing more casino-like activities into tracks.

Emerald Downs is a lot more than a card of nine races a day during its season, however. For those who diligently play the ponies, simulcasts from other tracks fill in the gaps between live racing. For families — and to judge from last Sunday’s session, the age of attendees is spread across the demographic spectrum — there are play areas, plenty of concession stands and entertainment.

The track is trying to maximize the revenue-generating potential of its facility by hosting business meetings and conferences, banquets and receptions, and off-season events including a holiday gift show.

That’s what it takes to make it to 20 years in a tough business like horse racing, a subset of a crowded sports and entertainment sector. In 2015, Emerald Downs reported that the daily average handle, overall attendance and average number of horses per race all increased from the previous year.

Special events will help keep attendance strong. Conventional thoroughbred racing is exciting enough, but last weekend featured relay races in which teams representing tribes from throughout the West competed. Riders from each team raced at full gallop and without saddle and stirrups, stopping every half-mile to change horses as quickly as possible (which might make an interesting wrinkle for the Kentucky Derby sometime).

The tie-in to the tribes represents another business thread in Emerald Downs’ anniversary year. The Muckleshoot sponsored the relay races, appropriately enough, because they own the track, having purchased it in 2015 (they already owned the land).

Economic development has been a long-standing issue and challenge. Casinos represented one opportunity for tribes to add revenue, and some continue to pursue that strategy. The Spokane Tribe of Indians recently won federal and state approval for a casino in Airway Heights. The Cowlitz Tribe is working on development of a casino it hopes to open in late 2017 near LaCenter, just 16 miles north of Vancouver. But casinos are approaching the point of market saturation, if they’re not already there. Airway Heights already has a tribal casino operated by the Kalispel Tribe of Indians. Competition has forced the closing of tribal casinos in this state, just as it has forced the closing of nontribal casinos in places like Atlantic City. It’s why Las Vegas keeps reinventing itself and adding features.

For the Muckleshoot, the strategy involves not just improving and leveraging Emerald Downs, but also diversifying its portfolio with White River Amphitheatre and Salish Lodge. Other tribes have gone into natural resources, commercial real estate, gas and grocery outlets and industrial projects, with mixed results.

Twice during Sunday’s session, horses tossed their jockeys, one before being loaded in the starting gate, the other after winning a race. Emerald Downs has managed to stay on its horse for the first 20 years of its operation. The challenge will be to stay there, and stay ahead, in a race for which there is an abundance of competitors — but no real finish line.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

  Comments