POSTED ON DECEMBER 26, 2012:
Cowboys and Indians
The economics of horseracing
It looks simple enough on the surface: horses running around a racetrack at Expo Square's Fair Meadows. Oklahoma has had horseracing for several decades -- at one point in four different cities. As the quarter horse capital of America, Oklahoma horseracing is an economic stimulus to all aspects of the horse breeding business. Over the years, the Tulsa County Public Facilities Authority (TCPFA), the Indian tribes, and the horsemen associations have found a way to make horseracing an economic stimulus at Expo Square.
Then came Indian gaming and tracks and casinos started dividing the limited number of gambling dollars. Unfortunately, most racetracks got the short end of that stick and gaming played a part in one track being closed. To complicate it further for Tulsa County, since the Fair Meadows track is on public property, casino gambling is not allowed as it is on the privately-owned Remington Park in Oklahoma City and Will Rogers Downs in Claremore. In fairness to Fair Meadows, the Indian tribes agreed to pay Expo Square $2 million per year to bring some equity between the tracks.
Even with this help, the public's interest in Tulsa for watching live horseracing continued to decline, which meant the purse money (wagers placed that are paid to the winners) got smaller and so did the attendance. With the cost of operations increasing, the capital cost to repair and restore the Fair Meadows facilities being beyond what TCPFA could do, and with revenue dropping, the trustees of TCPFA had a fiduciary duty to do something other than just stand by. It came to the point that it appeared horseracing needed to end at Fair Meadows.
Losing racing days is of grave concern to horseman and their bottom line. Indeed, the horse industry in Oklahoma is big business that affects lots of jobs. At one point there was talk of expanding the racing days at Will Rogers by picking up the Fair Meadow race days so that the total number of racing days would not diminish even though Oklahoma would be down to just 2 tracks. This idea apparently hasn't worked out.
In the midst of what appears to be a no-win economic perfect storm, there are major legal issues with the Indian Compact with the State of Oklahoma, the horseracing license with the Oklahoma Horse Racing Commission, and the naming rights agreements with the Creek Nation. As is often the case, it is very challenging -- at best -- to navigate through an economic storm that affects thousands of people and millions of dollars under complicated legal agreements.
Over the past few weeks, there have been some who have criticized the process of navigation used by TCPFA. Sometimes the process can affect the outcomes, and other times even the best process can't change the hard facts and truths. When the livelihoods of some and the fiduciary duties of others clash, it can become quite emotional to the point it spills over into litigation. Not that the civil justice systems isn't a good resolver of disputes, but it does tend to pick winners and losers.
In this case, with so much at stake, the better path is to see if the parties can agree to a negotiated settlement that moves everyone towards "getting to yes" for all the players. Even with a short-term timeout and Fair Meadows getting a racing license for 2013, it just puts off for another day the issues that need to be resolved.
Tulsa is fortunate to have an available forum where maybe the parties can convene. For decades the federal court for the Northern District of Oklahoma has been a leader in providing out-of-court dispute resolution with experienced settlement judges and attorneys. Given that federal, Indian, and state laws are involved, the services provided by the federal court makes the most sense. Even without filing a federal case, it would be worth pursuing the successful example which our federal judges have used to resolve some of our most vexing and complicated social issues.
This is a case of economics and balancing the benefits and harms of all involved. Everyone has their vested and legal interests. This isn't a case of any wrongdoing or law-breaking or underhandedness. And even when people got upset at the process that was used to deal with these issues, that's not what's really at stake. This is the collision of important public policies caused by an economic environment that tends to pick survivors and victims. Unfortunately that tends to make it very personal for some and very emotional for all.
The challenge for our public and private leaders is how to move forward with their competing interests and duties in an environment none of them created and to find the common ground in a new environment. When you can't change what has happened to you, it's time to create a new status quo.
It now appears that at least for 2013, the status quo will remain and there will be races at Fair Meadows at least one more year. But the lessons everyone has learned over the past two months point to the vitally important necessity to develop an inclusive, collaborative process where everyone has to accept what the new economic realities are and that sometimes everyone doesn't get everything they want in the end.
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