Colonial Downs sues to block racing restructuring

Colonial Downs is suing the Virginia Racing Commission to block moves the New Kent race track says would kill its plans to reopen.

The company asked the U.S. District Court in Richmond to stop the commission from going ahead with the complicated restructuring, which recognizes one group of horse-owners and trainers as the body authorized to use gambling revenue to support racing.

Colonial Downs shut its doors last year for the first time in 17 years after the collapse of talks between it and that horse-owners group, the Virginia Horsemen's Benevolent and Protective Association, over how racing ought to be conducted in the state.

A new state racing law, which took effective in July, aims to bring racing back to the state, by giving more control over the money to horse-owners and trainers.

Colonial Downs' lawsuit argues that the new state law conflicts with the federal Interstate Horseracing Act as well as the federal law that seeks to keep companies from establishing unregulated monopolies.

The track is asking the federal court to block the state law. It says the commission has been keeping it from acting on its agreement with a different group of horse owners that would allow it to reopen the New Kent race track.

"It is our desire to return high-end racing to New Kent … we cannot do so without the ability to partner with a horsemen's group that shares our vision for the future," said Jeff Jacobs, chief executive officer of Colonial Downs' owner, Jacobs Entertainment, in a prepared statement.

Colonial Downs wants to start with four days of racing next year, and to open two off track betting facilities, in Hampton and in Richmond.

It argues that the new state law keeps it from doing so by giving the commission the power to designate which horsemen's association can control the share of bets that go to fund the purses that pay horse-owners and trainers' bills.

The federal law allows tracks to contract with groups representing owners and trainers racing on any one day, while the Virginia law allows contracting with the group that represents the majority of owners and trainers at all races subject to the commission's oversight, Colonial Down's complaint alleges.

The commission's executive director, Bernard Hettel, said he would not comment on a pending lawsuit.

The horsemen's benevolent association executive director, Frank Petramalo Jr., said he believed the state law did not conflict with the federal law.

"It's a stretch," he said.

He said the horsemen's group that Colonial Downs wants to deal with is "a sham organization," and said its agreement was slanted to favor the track.

The long running dispute between Colonial Downs and Petramalo's group comes down to money.

The race track wanted substantially fewer days and bigger purses; the association believed that would cut too deeply into the livelihood of owners and trainers who relied on 25 to 45 days of racing with purses averaging $200,000 a day.

Cancellation of racing meant an estimated loss to New Kent County government of more than $400,000, but the new state law does provide for the county to receive a small share of statewide betting revenue. Colonial Downs was a major employer in New Kent, employing more than 600 people in its peak days.

Ress can be reached by telephone at 757-247-4535

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