Sam Houston Race Park, the Case for Expanded Gaming in Texas

Sam Houston Race Park, the Case for Expanded Gaming  in Texas

Yesterday I attended the monthly Houston Northwest Chamber luncheon, which was held at the Sam Houston Race Park.  During high school, friends of mine used to valet cars at the park and had plenty of interesting stories to tell about customers flush with cash driving in with Corvettes, Cadillac’s, and lifted 4 X 4 trucks and giving 20 dollar tips. More recently, another friend was the executive chef at the Steamboat Steak House next door to the track, and had regulars who would tip big after a day of picking winning ponies.

Despite the proximity to the park I rarely visited, and had little interest in horse racing until I went to my first Belmont stakes while living in New York and won about 600 bucks fading Funnycide in 2003.

After moving back to the area in 2010, and understanding the fun of horse racing, I've realized that the race track had a lot of underutilized potential. During yesterday’s luncheon, Andrea Young, President and COO of Sam Houston Race Park talked to the chamber a bit about the need to push for legislative action to put expanded gaming to ballot. 

As it stands, the park is going to continue to face headwinds for growth if they have to rely exclusively on horse racing for revenue. To illustrate this point, in a show of hands in the room of roughly 100 people, only several people indicated they have been to the park in the past several years to see thoroughbred racing. Since 2002 there has been a 72% reduction in thoroughbred racing in the state of Texas, and with it a corresponding drop in revenue, as it just has not been able to gain interest. The park has had to adapt to this change through offering concerts, reducing the total number of races per year to increase the quality of races, and I have also seen them advertise ostrich and camel races.

However, all of these pale in comparison to the potential revenue that could occur with casino style gaming. Currently, 40 states have legalized casino gaming, but Texas is not one of them. This void in gaming is currently being filled by casinos in Oklahoma and Louisiana, with an estimated $3.1 billion in Texan gaming revenue being spent in those states. If casino style gaming were allowed in Texas, it is estimated that that when considering the gaming revenue, hotels, and associated entertainment, that there would be a roughly $8.5 billion annual economic benefit.

For instance, the Sam Houston Race Park only uses half of it’s 300 acre property. The commercial real estate development, hotels , restaurants, and other forms of entertainment businesses along the beltway 8 corridor would have a drastic economic impact. The stretch of Beltway 8 from 290 and I-45 has commercialized greatly in the last decade, and in the short time that I have been back in the area I continue to see numerous oil and gas related firms set up shop.

Less than 5 miles past I-45, is Bush Intercontinental Airport (IAH). Having just listened to the plans for major airport system expansion earlier this week, I would imagine that as Houston becomes a major hub for international travel that business synergies abound . Having a world class entertainment option less than 10 minutes from IAH is yet another avenue in which revenue could compound.  After getting off a direct flight from Qatar, what better way to welcome a business traveler to Houston than a suite at a W hotel next to the Sam Houston Race Park and Casino?

One can only imagine the possibilities, which is why there is an effort to keep gaming off of the state ballot. Andrea indicated that nearly every poll shows roughly 80% support for expanded gaming within the state of Texas. So, who could be working to keep such a popular initiative from being considered by the voters?

Consider this, Landry’s purchased a casino and hotel in Lake Charles last year and has invested another 600 million dollars in development. WinStar Casino, the 2^nd largest casino in the US is 1.6 miles north of the Red River in Oklahoma.  There is a vested interest in keeping casino style gaming out of Texas, and these folks play hardball.

As a local resident and business owner, I am for everything that is good for the local economy, and this one is a no brainer. Creating local jobs, keeping money in the neighborhood, and heck bringing international money in would be a rising tide that lifts all boats.  

Napoleon Butic is the CEO and founder of Trout Payment Systems, a merchant services provider focused on hooking Houston area businesses up with the best deals and service on debit/credit card processing. For more information visit troutpays.com  or like our Facebook Page. https://www.facebook.com/TroutPaymentSystems