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Iowa Racetrack Caught in Power Struggle

"With so many laws and regulations seemingly at odds, and with so many different interests competing for a piece of the action, the answers remain elusive more than a decade after Prairie Meadows accepted its first wager.

"…Polk County owns Prairie Meadows, but it does not run Prairie Meadows. That's because the state of Iowa allows only nonprofit entities to hold a gambling license. So Polk County leases the track to the Racing Association of Central Iowa, a registered nonprofit corporation with a state gambling license.

"The racing association originally formed to promote the interests of horse owners and develop breeding and racing to bolster the state's agricultural economy. That mission was sanctioned by the Iowa Legislature in 1994, when lawmakers authorized racetracks to install slot machines to subsidize the struggling horse industry.

"As a nonprofit, the racing association is required under state and federal law to devote a share of its revenues to community causes.

"Then there are the voters. Every eight years, Prairie Meadows must win voters' support for the continuation of gambling.

"The racing association has often found itself in the middle of a tug-of-war between Polk County and the horse owners, with often conflicting directions from regulators at the Iowa Racing and Gaming Commission.

"…Steve Chapman, a former member of the racing association who now is a state racing and gaming commissioner, said the ongoing struggle among the track's beneficiaries has been perpetuated by a lack of purpose.

"…Prairie Meadows, at first a racetrack-only operation, went bankrupt in 1991. But the facility became hugely profitable once slot machines arrived on the scene. In less than two years, the track paid off $89 million in debt that had been assumed by the county. The county took its share of the profits as well: almost $60 million.

"…The Racing and Gaming Commission became so critical of Polk County's heavy-handed presence in track affairs in 1997 that it threatened to pull the Altoona facility's license. If the Legislature cited the horse industry as its reason for allowing slots, the commission reasoned, then Polk County had to sacrifice more to the horsemen.

"The county's share of track profits dropped by $20 million that year, while horse owners enjoyed a $2 million-a-year increase in purses. The state's threats also prompted Polk County to relinquish direct control of the track's day-to-day operations.

"…`There's no doubt about it, they grew the purses way too big,' said state Sen. Matt McCoy, D-Des Moines. `And in my opinion, they've done so at the cost of a lot of economic development, as well as charitable opportunities. I'd like to see an additional $3 million to $4 million distributed in the community.'

"Rasmussen, who races horses at Prairie Meadows and is consistently among the track's top money-winners, acknowledged that horse purses had grown too high, but he would not apologize for the board's past decisions to support the horse industry…"

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