NEW KENT — Colonial Downs owner Jeff Jacobs tearfully announced to the Virginia Racing Commission on Wednesday morning that he will surrender the track’s unlimited pari-mutuel owners and operators licenses Nov. 1, meaning that the track and its Off-Track Betting (OTB) facilities will close for good next month.
Harness racing season concludes at the track Oct. 26.
“I would like to see quality thoroughbred racing thrive and Colonial Downs move towards its full potential, [but] after 17 years, we cannot continue on any other basis. Virginians deserve nothing less,” Jacobs said in a statement of the track’s tumultuous relationship with the Virginia Horsemen's Benevolent and Protective Association (VHBPA).
Wednesday’s VRC meeting had been scheduled to discuss the racetrack’s 10-year signed contract with the Old Dominion Thoroughbred Horsemen's Association, which formed last month. The contract called for an eight-week thoroughbred season next year. In order to host thoroughbred racing, Colonial Downs must have a signed contract with a horsemen's association that is approved by the VRC.
Jacobs did not give time for discussion. In giving his statement to the VRC, he said, “I understand from private conversations that the commission support is not there for ODTHA and our contract with the ODTHA.”
When asked about his perception of the VRC’s concerns, Jacobs said that Colonial Downs and the new horsemen group were looking at “moving into a new direction” with limited quality racing, including higher purses.
Jacobs’ announcement stunned New Kent County officials, race fans and track employees.
“I don’t even know what to say,” said County Administrator Rodney Hathaway. “I’m still in shock but for right now, all I can say is that we have just started working on next fiscal year’s budget and we will have to factor this in.”
The track has tried for months to negotiate a contract with the VHBPA, the group that represents the horses raced at the track. As a result of the failed negotiations, their contract expired in January. Four of eight OTB facilities closed, and those that remained open were prohibited from taking bets on Virginia thoroughbred racing.
Now that the track is closing, all eight OTB facilities will be permanently shut down.
When it hosted thoroughbred racing, the track had more than 280 full-time employees and hosted nearly 2,000 guests a day. New Kent County, where Colonial Downs is located, estimates the season's cancellation meant a loss of more than $400,000 in revenue. The track opened in 1997.
According to Larry Clark, New Kent's assistant director for finance, the track brought in $188,000 less than projected because the debate halted thoroughbred betting off-site. As a whole, Clark added, the track's revenue to the county has been steadily declining since 2007.
Clark said Colonial Downs brought in $793,000 in 2007, and nearly half that in 2013.
Colonial Downs spokesman Jay Poole said the track actually had a surge in visitors in 2013 because of the shorter thoroughbred season and higher purses. The purse for the Virginia Derby, the track’s annual signature event, was $500,000 in 2013. It had gradually declined from its peak of $1 million in 2006 and 2007.
“We brought in higher quality horses and it’s because of the schedule and the fact that Colonial Downs has one of the best turf tracks in the country and draws in high-end horsemen,” Poole said.
According to Debbie Easter, executive director of the Virginia Thoroughbred Association, Colonial Downs is not the only racetrack in the U.S. to face financial hardships.
“The horse industry is not like it was years ago,” Easter said in a phone interview earlier this week. “It used to be the No. 1 spectator sport, but attendance has been sliding downward.”
According to Hathaway and Clark, it’s too early to know exactly how much the county can expect to lose from the track being closed, but Hathaway previously called it “substantial.”
Jacobs admitted that some employees were surprised by the decision, even though they have been told several weeks ago this was a possibility.
He said he will pay their salaries until the end of the year.
Jacobs said he is looking into “rebooting” the racing industry, but that it “would require support from state government” and public-private partnerships.
According to Jacobs, Virginia state officials could start improving thoroughbred racing by increasing the purse, or prize money, from $6 million a year to $15-20 million.
“Virginia thoroughbred racing would then reach its potential of serving as an important agribusiness outlet while driving hundreds of millions of dollars of growth into Virginia's agribusiness economy,” he said.
Martin can be reached by phone at 804-885-0040.