Since it opened in 1973, Mobile Greyhound Park has contributed more than $135 million in revenue to local municipalities, public education and pension funds for first responders, but over the last 25 years the funding has dropped dramatically in a continuing trend.
The Mobile County Racing Commission was created to regulate the operation of the dog track and oversee the dispersion of tax revenues generated from betting. In its heyday during the late 1980s, the commission distributed nearly $8 million annually to 22 public entities across the county.
The beneficiaries are a mixed group of colleges, school systems and city governments. The percentage each group receives was outlined in legislation organizing the commission and legalizing dog racing in Mobile County.
The money the racing commission receives amounts to 7 percent of the proceeds generated from live racing and 2 percent of the proceeds from simulcast racing, which facilitates bets on horse and dog races broadcast live from tracks around the country.
Additional funds are generated by rounding all proceeds to the nearest dime and from unclaimed winnings or “outs,” both of which are split between the commission and the owners of the track.
To date, with more than $51 million in proceeds, the University of South Alabama (USA) has received the most funding from pari-mutuel wagering. From betting in 1987 alone, USA received $3 million. But to paint a picture of the decline in the park’s performance, USA only received $41,000 in 2014 — a 98 percent reduction over 27 years.
Overall, total allocations to all entities have seen similar decreases — falling from $7.5 million in 1987 to just under $127,000 last year, the lowest amount in the track’s 42 years of operation.
Last week, Gov. Robert Bentley announced he would leave continued enforcement of Alabama’s long-debated gambling laws to local jurisdictions, a move many think could pave the way for a greater variety of “legal betting” in the state.
Though no plans have been announced or discussed publicly, the change may also open the door for more opportunities at Mobile Greyhound Park.
“If you look at dog tracks and horse tracks all over the country, if they don’t have some form of help — a poker room or slot machines — they pretty much go out of business,” Mobile County Racing Commission Chairman Edward Menton said. “I won’t say this one is going to go out of business, but it’s one of only three tracks in the country that doesn’t have some form of assistance.”
The Biloxi effect
The racing commission doesn’t mince words when pointing to a cause for the decline in revenue. While Menton acknowledged a lack of interest from a younger generation seeking “instant gratification,” the commission wrote in its 2014 annual report “gambling opportunities in close proximity to Mobile continue to inflict damage and erode the amount wagered at the track.”
In his discussion with Lagniappe, Menton blamed the Florida Lottery and Mississippi’s waterfront gambling specifically, which became operational in 1988 and 1992, respectively.
“From 1991 to 1993, as the lottery came in and the casinos started opening on the Mississippi Gulf Coast, our distribution dropped from $5.1 million to $2.5 million,” he said. “That was directly attributed to the casinos in Mississippi, and it’s continued to go down from there.”
Since 1993, the revenues have never really recovered. In response, additional legislation was passed in 1995 allowing bets on simulcast races. But while remote betting generates more money than live races, it also yields a smaller percentage for its tax beneficiaries.
Last year, simulcast dog races experienced the only increase in revenue recorded at the track, yet only 2 percent of those funds were retained by the racing commission.
In total, only 112,000 people visited the track last year, but the slowdown in attendance and tax distributions doesn’t mean no money is being made. In 2014, the total handle, or sum of bets placed, totaled more than $25 million. The total includes $5.6 million from betting on live dogs, $7.2 million from simulcasting horse races and $12.9 million from simulcasting dog races.
Menton said it’s no small take.
“People act like the track is going out of business, but that’s a significant handle,” he said. “It’s just that it doesn’t produce the same tax revenue it used to.”
In all, the $25 million handle generated $819,044 for the racing commission in 2014, and after roughly $800,000 of expenses, that doesn’t leave much to split 22 ways.
Current operations, longevity
The decline in attendance has also caused cutbacks to the racing commission staff. According to Menton, the commission had 26 employees in 1996, but is currently down to 8 full-time staff members including coordinators, race inspectors and race judges. There are also a handful of part-time veterinary positions.
“We’ve had to cut and cut, and we’re looking at it again, but we’ve never laid anyone off,” Menton said. “We’ve mostly cut positions through attrition over the years.”
According to a recent report by the Alabama Department of Examiners of Public Accounts, the commission doled out about $351,000 in employee compensation last year. That doesn’t include the $141,525 total salary split among the three commissioners, or roughly $47,000 each.
The commissioners, including Menton, Robert E. Davis and Michael E. Box, are appointed separately by three individual organizations. Davis was appointed by a two-thirds vote of Mobile County’s legislative delegation, Box was appointed by the Mobile County Foundation for Public Higher Education and Menton was appointed by a majority vote of Mobile County’s municipalities.
In addition to regulating races, the commission is also responsible for the health and proper care of the dogs at the track — something Menton said is a priority.
“Obviously people are going to come first because it’s a business, but the dogs are on an equal playing field,” Menton said. “We won’t tolerate any abuse, and if any is suspected, we alert the district attorney right away.”
Despite track-side euthanizations being legal in Alabama, Menton said the commission banned the practice years ago except for cases in which a dog is severely injured and must be put down for “humane reasons.”
According to Menton, Mobile Greyhound Park was also the second track in the country to start an adoption program for retired racing dogs — one it’s maintained since 1992.
Last year, 500 greyhounds were placed in adoptive homes, part of the 4,240 dogs adopted since the program’s inception, according to the commission’s own records.
Changing ownership, potential new revenue
Despite the decline in revenue, in 2009 the PCI Gaming Authority — an enterprise of the Poarch Band of Creek Indians — purchased 65 percent of the controlling interest of the track for a reported $10 million.
In response to inquiries from Lagniappe, Wind Creek Hospitality COO Brent Pinkston said the declines in revenue at the dog track are consistent with others across the country, which he explained was the result of “other entertainment options.”
“The age demographic [for] pari-mutuel customers skews over 60 years of age,” he said. “Thus, attracting new customers is very difficult with other entertainment options, including other forms of gaming.”
But PCI in Mobile is limited in the kinds of “gaming” it can pursue, because unlike the Wind Creek Casino and Hotel in Atmore, the dog track is not located on reservation land and is bound by Alabama law.
Menton said that is the reason neither PCI nor the commission has entertained the idea of slot machines or electronic bingo at the greyhound park in the past.
In October, in a case involving electronic bingo at Victoryland in Shorter, Alabama, a Macon County judge determined the machines were legal under Alabama law after a challenge from Attorney General Luther Strange. Currently, the machines are subject to a stay by the Alabama Supreme Court through the appeal of that ruling. On Nov. 9, days after announcing he would no longer use state resources to enforce gambling laws, Bentley released a statement praising the high court’s decision.
Pinkston said the Creek Tribe has “actively pursued a compact with the state for some time” to expand gaming operations within the confines of the law. Yet he also said if laws were to change, electronic bingo would be “an option” for additional revenue.
However, one type of controversial gaming — historical horse racing — has already been considered in Mobile once before, and Pinkston said it could again be a possibility “if deemed legal by the state.”
To the unfamiliar, historical horse racing looks similar to a typical slot machine. It has the same lights, sounds and betting system, but instead of selecting winners at random, the machines use odds based on actual, historical horse races. The winner of each race is typically represented by a series of three images, such as cherries, that are selected by the person placing a bet.
Right now, historical horse racing machines are legal in Oregon, Arkansas and Kentucky, and are being debated in Texas. Until they were temporarily halted last month, the machines were also operating in Wyoming, where proponents credited them for an increase in profits and a resurgence in the popularity of live horse racing.
Depending on who you ask, they’re currently legal in Mobile County, though they are not operational anywhere.
“We have an attorney general’s opinion that says it’s legal here,” Menton said. “I was convinced and still am convinced that it’s pari-mutuel wagering and not gambling.”
That opinion was issued in 2000 by Mobile native and former Attorney General Bill Pryor, who is currently a judge on the 11th Circuit U.S. Court of Appeals. It concluded “the use of such machines [was] permissible in Mobile County if [it’s] approved by the Mobile County Racing Commission and if the use is otherwise legally permitted under Alabama’s lottery and gambling laws.”
As a result, the racing commission made a motion to allow historic horse racing 15 years ago, subject to the approval of then-District Attorney John Tyson, who ultimately opposed the machines.
“I made the motion that we allow them, with the approval of the DA,” Menton said. “That one little comma was the issue.”
Pinkston said if deemed legal, PCI “would consider testing (historic) horse racing as a form of additional revenue,” but the proposal could face the same legal challenges today.
Current District Attorney Ashley Rich seems to agree, saying the 15-year-old attorney general opinion on historical horse racing in Mobile County doesn’t affect her position on enforcing state law.
“I’m in charge of enforcing the laws of the state of Alabama and that’s what we’ve always done in Mobile County,” Rich said. “The law in Alabama says gambling is illegal, and we will enforce that.”
Though he was unable to address historical horse racing specifically, Mobile County Sheriff Sam Cochran issued a statement to local media following the Bentley announcement of state gambling, which he said “does not change anything in Mobile County.”
“The state law does not allow electronic bingo,” Cochran wrote. “We have not allowed them to operate in the past and we will continue to enforce the law.”
Menton emphasized PCI Gaming hasn’t approached the racing commission about historical horse racing in over a decade. At this point, it’s unclear what PCI might do going forward, but Menton said he’s hopeful the legislature will eventually allow “some kind of enhancement to the track” to help restore some of the lost revenue. Though as a commissioner, he said it’s not his place to lobby for it.
As for PCI, it looks like business as usual at the dog track even while the number of live races, participants and revenues in decline.
“Our plans are to continue racing activity,” Pinkston said. “We have recently remodeled the facility and have added more simulcast options in order to draw more guests and maintain a viable business entity.”
Mobile County Racing Commission Audit 2012-2014
This page is available to subscribers. Click here to sign in or get access. During the month of December, give (or get) a one year subscription with TWO months FREE.