Hurdles remain before slots open

The first slot machines won't be up and running at Central Indiana horse racing tracks until sometime around the new year.

The General Assembly approved legislation earlier this year that will allow the state's two horse racing tracks to install 2,000 slot machines each.

Indiana Downs in Shelbyville is targeting late this year or early next year to launch slots operations. Hoosier Park in Anderson isn't planning to open its slots parlor until 2008.

"There's an incredible amount of effort that has to be done" before slots can be played, said Ernest Yelton, executive director of the gaming commission.

The commission, for example, must investigate track owners, approve parlor designs, review prospective employees and vendors, and test every slot machine.

All of that takes at least five months from the time an application is submitted, Yelton said.

"It's a monumental task," he said.

Under the legislation, the tracks must pay the state $250 million each for the right to install slot machines, the highest "racino" licensing fee in the country. The first installment of $150 million is due by Nov. 1, regardless of when the racinos open. The balance is due by the following November.

Representatives from both tracks said they intend to make that first payment.

All of the money raised from licensing fees and wagering taxes will be used to provide property tax relief to Hoosier homeowners, including $300 million in rebate checks that will be mailed late this year.

The state did not anticipate collecting any wagering taxes during the fiscal year that begins July 1, so state coffers won't be affected if the tracks take a while to get out of the gate, said Rep. Trent Van Haaften, D-Mount Vernon, who authored the slots bill.

In addition to ponying up the license fee, the law requires each track to invest at least $100 million in its facility. A temporary facility can be used for 24 months until permanent parlors are built.

Ross Mangano, chairman of Indiana Downs, said the track is in the process of lining up financing, though he declined to say what avenues he is pursuing. He hopes to have financing in place in about three weeks.

After that, architects will begin designing the slots parlor. Mangano said he expects Indiana Downs to retrofit existing space and build an addition to accommodate the slots.

Rick Moore, general manager of Hoosier Park, said Centaur Inc., which owns the track, is also lining up financing.

Moore said it is too early to say what the slots parlor might look like or speculate when in 2008 it might open.

"I wish I could give you a timeline as far as what quarter or what month," he said. "We just aren't to that point yet.

"We're trying to run all the numbers, all the elements," he added. "Hopefully in the next couple of months we will have a firm decision."