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Breeding Money


What could a shiny new casino along the Delaware River possibly have in common with Chester County pastures and the foals that feed on them? More than you’d think.

Leaning against a fence rail, Rick Abbott is surrounded by rolling fields as far as the eye can see. These pastures have produced corn and soybeans for 25 years.

No more. Abbott’s 20 acres have been replanted with native bluegrasses. He will soon host a dozen pregnant mares.

Up until three years ago, Abbott counted about 10 foals a year born on his land in southern Chester County. Then, in 2005, 50 pregnant mares arrived at the 160-acre farm for the spring foaling season. They came from 12 states, including almost 20 from Kentucky. Abbott says requests have been pouring in from more than 100 mare owners, but he just can’t handle that many animals. Most of the neighboring horse farms are also fully booked. The mares were shipped to Charlton Farm by forward-thinking owners hoping to cash in on a Pennsylvania-bred bonanza.

The state has produced 850 to 900 thoroughbreds each year from 2000 to 2004, primarily in Chester, Bucks, Dauphin and York counties. In 2005, it jumped to 1,250, and the numbers are expected to soar in the coming years.

“For a lot of us over the past decade, it’s been more of the same,” says Abbott, a bloodstock agent and member of the Pennsylvania Racing Commission. “Out-of-state breeders have been shipping some nice broodmares here so the foals will be eligible for the Pennsylvania-bred bonuses and the expectation of rising purses. We’ve finally been able to see the light at the end of the tunnel.”

There at the end of the tunnel is Harrah’s Chester Casino & Racetrack along the Delaware River, with it’s live and simulcast harness racing and 2,750 shiny new slot machines slated to light up for action this month.

“Over the last two years, the slots anticipation has kept people involved,” says Abbott.

TIMING IS EVERYTHING. Just when Smarty Jones mania was hitting full throttle in the summer of 2004, the Pennsylvania Legislature was preparing to vote on the slot machine issue, which had been bottled up on the state’s docket for more than seven years. That all changed when Gov. Ed Rendell signed the bill that July. It provides property tax relief and increased state funds for education by allowing 61,000 slot machines in Pennsylvania—the most anywhere except Nevada.

“Smarty made it easier for the legislators, who were on the fence to topple over in favor of it,” says Abbott, an attorney in a former life. “John Servis (his trainer) gets a lot of credit for Smarty’s enormous popularity. John put a human face on an industry that’s often looked at as a bunch of rich guys trading money. The legislators saw people who had real lives.”

Known as the Pennsylvania Race Horse Development Fund, the gaming act will bring slot machines to 14 venues across the state, including seven racetracks, five stand-alone facilities and two resorts.In late September, conditional licenses were awarded to Philadelphia Park in Bensalem and Harrah’s in Chester. Casino owners will get nearly half the revenue.Legislators have said slot machines eventually will generate $1 billion for property and wage tax cuts.

By early 2007, Philadelphia Park hopes to have 2,100 slot machines in operation; the track spent last summer renovating the first and second floor of its grandstands to accommodate them. The second phase, a permanent $400 million, 300,000-square-foot casino with a hotel and 2,000-car parking garage, is slated to open in mid-2009. Meanwhile, the town of Bensalem is gearing up for an annual influx of 4.4 million casino customers.

For horsemen, the windfall translates into $12 million to improve the backstretch area of the track—including barns, stables and facilities for trainers and their staff. Early projections call for daily purses to soar from the current $130,000 to at least $350,000, plus significant bonuses paid to Pennsylvania-bred winners.

With the slot machines up and running, the state foal crop could climb to 1,500 by 2008, says PHBA president Peter Giangiulo. Since 2004, more than 100 new stallions have been registered with the association.

“We’re getting calls from all over about standing stallions,” says Giangiulo, owner of Castle Rock Farm in Unionville. “The quality is going up. Now you can breed eight horses, sell five and they’ll cover the cost to race the other three. Our time has come.”

IT HAD BEEN almost two decades since Delaware Valley harness-racing fans had heard, “They’re they go!” Last September, Chester Casino & Racetrack launched a new era when Hall of Famer Carl Manzi, steering Silver Flash, won the first official race.

Located on 64 acres of the long-abandoned Sun Shipbuilding & Dry Dock facility in Chester, the track offers sparkling views of ships and tankers passing by on the Delaware River. It’s the first racetrack to open in Pennsylvania since Philadelphia Park in 1974.

But Harrah’s Chester offers much more than harness racing. The world’s largest casino company has built a posh $430 million ($50 million licensing fee included) entertainment complex to house 2,750 slot machines management says will be fully operational by Jan. 16.

Harness racing has pockets of interest around the country and is mostly a nighttime sport. The Chester track, however, operates during the afternoon so the facility can cater to throngs of slot machine players in the evenings. The track’s director of racing operations, Mike Tanner, pegged daily purses at $70,000 this fall; 12 percent of slots revenues are earmarked for harness purses. Harrah’s Chester’s purses are expected to soar to upwards of $200,000 as the slots money begins to pour in.

This year, the track is scheduled to host up to 100 days of live racing, plus simulcasts from the premier racetracks across the country. In what is recognized as the fourth-largest market in the U.S. for gamblers, management expects Chester’s purses to rival—if not outpace—harness racing’s most lucrative track in New Jersey’s Meadowlands.

Harrah’s Chester is expected to bring in three million visitors annually, according to David Sciocchetti, director of Chester’s Economic Development Authority. It’s the first such facility in the region built as a joint entertainment venue, which sets it apart from Delaware Park, Dover Downs and Philadelphia Park—all tracks retrofitted for slots. The slots side of the business is restricted to the 100,000-square-foot upper level, which also will house the End Zone Sports Bar and a 1950s-style diner. Eventually the gambling enterprise will boast six restaurants and a pair of lounges.

It’s worth noting that the focus of Harrah’s Chester has always been on slot machines—not the revival of harness racing. “We’re building a world-class facility and teaming it with a wonderful tradition of harness racing in the Delaware Valley,” says Vince Donlevie, the facility’s senior vice president and general manager, who was born in Chester. “The two pieces have to work hand in hand to make it a profitable venture.”

On the racing side, track designers worked around the challenges left behind by Sun’s massive shipbuilding operations. The first turn of the 5/8-mile track rests on a newly built $12 million bridge similar to a freeway-style overpass. It sits atop the former wet docks, where work was completed on ships after they were launched.

The all-weather dust stone track is so close to the water’s edge the horsemen could easily toss their whips into the river. Adjacent to the first turn, a sprawling 131-stable paddock includes a second-floor driver’s lounge and outdoor deck where horsemen can watch the races.

In harness racing, horses run in a specified gait while pulling two-wheeled carts called sulkies. The standardbred breed has proportionally shorter legs and longer bodies than thoroughbreds; they also possess a more placid disposition. Racing involves considerable strategy, and on a 5/8-mile track like Harrah’s Chester, early speed becomes a critical component.

Today there are more than 400 standard breeders in the state, a number that should climb in coming years. Some of the premier standardbred farms in the nation are nearby, including Winbak in Middletown, Del., and Hanover Shoe Farm. Located on more than 3,000 acres in rural Adams County, Hanover is the largest winning standardbred horse farm in the world. Thousands of tourists visit the world-class breeding hub annually, many as part of their historic Gettysburg vacation itinerary.

Hanover’s rolling farmland has remained relatively unchanged since the turn of the last century. It’s been a world-class breeding establishment for more than eight decades. Its president, Jim Simpson, says the newly enriched stakes races will attract horses to Pennsylvania from all over the Northeast—and that the Pennsylvania Breeders Fund, which pays bonuses for horses bred in state, should rocket to $10 million annually.

“This is a pivotal point,” Simpson explains. “It will make economic sense to hang onto the farms for future generations, rather than selling off to developers. The slots windfall will have a profound effect on our industry.”

It will also be a powerful shot in the arm to agribusiness, the second largest industry in Pennsylvania. The state’s equine owners devote 1.2 million acres of land for horse-related purposes. That generates assets totaling nearly $8.3 billion.

In addition, Pennsylvania’s horse farms preserve green space and hold the line on over-development.

“The racing industry will be the engine driving the whole train,” says Ann Swinker, a professor in Penn State’s dairy and animal science department. “Land will stay in agricultural use, and we’ll be getting better equine genetics. So there should be a ripple effect on the hunters, jumpers and pleasure horses. The upswing in breeding will strengthen the whole horse and agriculture industry.”

OVER THE PAST three years, a trio of horses with ties to Chester County has won the Kentucky Derby twice, the Preakness twice and the Belmont once. The success of Smarty Jones, Afleet Alex and Barbaro in Triple Crown races has thrust the region into the national spotlight. Though Kentucky’s racing elite might be scratching their heads, Chester County’s bluegrass pastures have long been home to legendary racehorses and sport horses.

“Smarty Jones being foaled and raised in Pennsylvania should not come as much of a surprise to those who have followed our history,” says Mark McDermott, executive director of the PHBA. “Alphabet Soup was a Breeders Cup Classic winner, Go for Wand was a Hall of Fame filly—and then there are the stallions.”

Located near Cochranville, Derry Meeting Farm will be forever etched in the annals of thoroughbred breeding as the birthplace of two of the world’s most influential sires, Danzig and Storm Cat. Danzig, who died last January, was the leading U.S. sire three times in the 1990s. Storm Cat snatched that prize in 1999 and 2000 and is the world’s leading commercial sire, with a stud fee of $500,000.

At Derry Meeting, the young horses spend the winter outdoors forging muscle and toughness, a trait revered by many yearling buyers. Proprietor Bettina Jenney says her late husband, Marshall (who died in 2001), recognized the area back in the 1960s as a great place to breed and raise horses.

“The ground is well-drained with rolling hills, and there is a good support system of blacksmiths, vets and feed men,” she says. “We’ve had our share of Olympic and World champions.”

In October 2005, Tom Riegle acquired Real Quiet, the best racehorse to ever stand in Pennsylvania. A 14-member syndicate managed by Reigle owns the five-time Grade 1 winner, who was denied the final jewel of the Triple Crown by the bob of a head in a photo finish. After six years in Kentucky, Real Quiet will stand for $6,500 if the client chooses not to foal in Pennsylvania. In-state, the cost is $5,000, enticing breeders to foal their babies here and run for Pennsylvania bonuses.

“The vast majority of people here breed to race,” says Riegle, a consultant to Regal Heir Farm near Harrisburg. “The new lineup of stallions is going to produce better horses that can compete with the quality out-of-state horses coming for the slots-driven purses.”

The state Legislature authorized the Pennsylvania Breeders Fund in 1974 to encourage breeding and racing of Pennsylvania thoroughbreds, offering monetary awards to breeders and owners of stallions and such horses. The fund is financed by one percent of the money wagered at the state’s four racetracks and their off-site betting facilities.

In 2005, that fund paid out a healthy $7.9 million to Pennsylvania-bred winners. When the slots are fully online, it could soar to $25 million. The fund will be utilized to expand the state breeders’ reward program, says PHBA executive director Mark McDermott.

McDermott says the PHBA will be scheduling more races restricted to Pennsylvania-breds until they’re able to compete with the quality horses sure to pour into state’s tracks. With the surge in pregnant mares arriving in the state, breeders want residency requirements tightened. To be registered as a Pennsylvania-bred in 2007, the dam of the foal must reside here continuously from Nov. 1, 2006, through foaling. Although other elements of the state’s racing and breeding programs are still being ironed out, a windfall seems to be a sure bet.

“There will be a tremendous movement of quality mares into the state that, in time, will be followed by quality stallions,” says Rick Abbott of the Racing Commission. “I think we’re all staring at a significant economic boom.”