Colonial Downs to shut down operations on Nov. 1

In an ongoing struggle between Colonial Downs’ compliance with the Virginia Racing Commission’s (VRC) numerous requests to agree to a new contract with Virginia Horseman’s Benevolent and Protective Association (VHBPA), Colonial Downs’ announced that it will shut down all operations effective Nov. 1.

The Oct. 4 press release comes just days after Colonial Downs announced an agreement with the Old Dominion Thoroughbred Horseman’s Association, a group that is currently being formed. The new agreement was targeted to open up off-track betting (OTB) facilities, and called for an eight-week, 24 days of racing. If the new agreement is not approved by VRC at an Oct. 15 meeting, Colonial Downs will commence with closing the facility.

“We want to focus our prize money each year on several high quality days of nationally ranked races involving some of the trainers, jockeys, and horses in America,” commented Colonial Downs owner Jeffrey Jacobs. “Our former horseman’s group [VHBPA] wanted to see our money spread out over more days of lower quality racing, and they did not want to compensate us for losses incurred by opening up the stables and backstretch for them all summer long.”

The press release focused on Colonial Downs’ inability to operate OTB facilities and the inability to operate due to state law. Colonial Downs president Ian Stewart says the facility is on “life support” and needs VRC to approve the horseman’s contract in order to prevent a shutdown.

“This situation has cost numerous jobs and caused us to miss this year’s racing season as well as created several losses of several hundred dollars per month,” added Jacobs. “We recently notified employees that we’ll be ceasing operations on Nov. 1.

An Oct. 3 conversation with Stewart foreshadowed the announcement of a facility shutdown.

“We reached a point where we couldn’t talk to the VHBPA,” said Stewart. “They are still using a model that is out of date and we are just too far from reaching an agreement.”

Stewart continued, speaking on the possibilities that the new horseman’s group may bring.

“This group [Old Dominion Thoroughbred Horseman’s Association] will consist of those who race at this race track,” he continued. “We are planning on eight weekends form June-July, three days a week and include races on Labor Day weekend.

“Our high end racing will consist of $1 million purses and the “Grand Slam of Grass,” a triple crown meet,” he added.

The Colonial Downs’ president also commented about the growing steeplechase racing, saying that style of racing is becoming popular quickly around the state.

In order for negotiations to proceed, Stewart and Colonial Downs would have to drop an appeal in Richmond Circuit Court. The appeal was filed after the Virginia Racing Commission (VRC) mandated Colonial Downs and VHBPA come to an agreement in mid-September. Now, the proposed eight-week, 24-day season comes to the forefront as a possibility for 2015.

Phone calls to reach VHBPA executive director Frank Petramelo Jr. were not returned at the time of this release. However, Petramelo has said in past meetings with Colonial Downs and VRC that it has been “difficult to negotiate” with Colonial Downs.

VRC commissioner Stran Trout said the impact of a Colonial Downs’ closure could cause financial ripples throughout the state.

“We’ve been working with Colonial Downs and VHBPA since last December to come to a solution,” said Trout. “The significance to the situation means a lot to me because I am a New Kent resident.

“Colonial Downs is the only race track in the state of Virginia that runs thoroughbred racing and provides opportunities for OTB to operate,” he continued. “If they choose to end operations, it would have financial ramifications throughout the state, and especially to New Kent.”

An Oct. 15 date is expected for VRC to review the contract between Colonial Downs and the Old Dominion thoroughbred racing group. A decision may be rendered for approval or denial at VRC’s meeting at the Department of Agriculture in Richmond.

Editor’s note: Below is the entire Oct. 4 Colonial Downs’ press release.

COLONIAL DOWNS ANNOUNCES SHUTDOWN TO OCCUR NOVEMBER 1, 2014
ABSENT VIRGINIA RACING COMMISSION SUPPORT

New Kent, VA- October 4, 2014: Jeffrey P. Jacobs announced today a closure date of November first for Virginia’s only horse race track and statewide system of off track wagering facilities absent Virginia Racing Commission (“VRC”) approval of a marquee series of races accompanying a long term contract with a newly formed horsemen’s group. Colonial Downs has proposed three days of national caliber, high-end racing with an additional 17 days of summer racing for Virginia horsemen and support of several steeplechase events elsewhere in the Commonwealth. This race schedule is facilitated through an agreement with the Old Dominion Thoroughbred Horseman’s Association, a horsemen’s group currently being formed. Said Jacobs, the owner of Colonial Downs, “It is very simple. We want to focus our prize money each year on several high quality days of nationally ranked races involving some of the top trainers, jockeys and horses in America. Our former horsemen’s group wanted to see our purse money spread out over more days of lower quality racing, and they did not want to compensate us for losses incurred by opening up the stables and backstretch for them all summer long. That approach does not work. A perfect example of that approach is Suffolk Downs outside of Boston. Suffolk Downs runs over 60 days/year of low quality racing, loses millions of dollars each year, and recently announced that after 70 plus years of racing it is ceasing all operations this November. We do not aspire to be the Suffolk Downs of the South. We aspire to be the Saratoga of the South.”

“Unlike most businesses, we are not permitted to just put forward the product that we know is in the best interest of our customers, employees, and shareholders,” added Ian Stewart, President of Colonial Downs. “We need the approval of the Virginia Racing Commission to enter into an agreement with the horsemen who share our vision of bringing high quality thoroughbred racing to Virginia. Colonial Downs is now on life support. Because Colonial Downs does not currently have a thoroughbred horsemen’s contract approved by the VRC we cannot by law receive thoroughbred race signals from out of state racetracks in our network of off track wagering facilities. This situation has cost numerous jobs and caused us to miss this year’s thoroughbred racing season as well as created losses of several hundred thousand dollars per month. These losses are unsustainable. Therefore, we have notified our employees this week that we will be ceasing operations on November first. The only way we will be able to avoid a shutdown is if we are able to secure Virginia Racing Commission approval of our race schedule and new horsemen’s contract before then.”

Said Jacobs, “The Virginia Racing Commission should not delay in approving our race schedule featuring our 3-day marquee series of races and our 17 days of summer racing, as well as the accompanying contract with the horsement who share our vision of high quality racing. It is time to return the Virginia Derby to national television. I realize that we are 15 to 1 long shots, however, we are either going to improve the long-term fundamentals of thoroughbred racing in Virginia or we are moving on down the road.”