New greyhound law makes for uncertain future - KWWL - Eastern Iowa Breaking News, Weather, Closings

New greyhound law makes for uncertain future

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DUBUQUE (KWWL) - Iowa's new greyhound racing laws are drawing mixed reactions.

On Friday, Gov. Terry Branstad signed legislation that will change Iowa's dog racing laws.

Up until now, the casinos that operate the state's two remaining dog tracks have been required to supplement greyhound racing in order to keep their gaming licenses. Those are Horseshoe Casino and Bluffs Run Greyhound Park in Council Bluffs and Mystique Casino and Dog Track in Dubuque.

Under the new law, those casinos will be able to close their dog tracks and still retain their gaming license.

Mystique's president and CEO Jesús Avilés said this will lift a heavy financial burden off both casinos. He said it cost Mystique some $4 million last year to supplement greyhound racing, which ultimately takes away from the city of Dubuque and area non-profit organizations.

The City of Dubuque owns Mystique Casino. A not-for-profit organization called the Dubuque Racing Association contracts with the city to operate Mystique. At the end of every year, the DRA splits it profits between the City of Dubuque - for capital improvement projects - and area charities and nonprofit organizations in the form of grants.

"This burden (of supplementing greyhound racing) was so onerous that it would've meant a lot of things, especially here in Mystique," Avilés said. "It might've meant contraction, it might've meant potential lay-offs, so this came at the opportune time."

The new law, however, also creates uncertainty for people who count on greyhound racing for their livelihood.

Jeff Junk is a Jackson County greyhound breeder. While dog racing isn't his primary source of income, he said it's a large chunk of it.

Junk and other greyhound breeders statewide are now left wondering what the future holds for them.

"How do you decide whether or not-- like, this female in the second pen here, she came in season last week," Junk said Monday on his farm, gesturing to a nearby greyhound. "I decided not to breed her because I don't know what's going to happen. I mean, it's $1,000 just to breed that female. So do I spend that money and then not have it down the road, nowhere for her pups to run?"

The new law says greyhound racing can end in Dubuque at the end of the 2014 season, which concludes in the fall. After that, however, the Iowa Greyhound Association has the chance to lease Mystique's track for $1 per year in a five-year contract.

Jerry Crawford is a Des Moines-based attorney, who represents the Iowa Greyhound Association. He said the new law is a major compromise for the IGA but the group plans on taking advantage of that five-year lease opportunity.

"We would have preferred that racing continue in Iowa as is but were faced with a tough decision about how to go forward," Crawford said in an e-mail to KWWL. "Greyhound racing needs a lot of promotion to compete with casinos and slot machines and it wasn't getting any."

"I hope the IGA can make it. I hope they can do it," Junk said. "I hope we can keep racing, but if we're going to lose money on it, we just gotta give it up. Part of business."

"We're hoping they're successful," Avilés said, "because if the Iowa Greyhound Association is successful in changing their model and changing the way they do things from the way we did it, we would stand to gain from that by increased visitations. But the jury's still out. I think it's an uphill climb, but we wish them all the success that they deserve."

After the initial five-year, dollar-per-year lease, Avilés said, the IGA would have to negotiate with the city of Dubuque and Mystique Casino for another five-year lease - that time at fair market value.

The new law says racing can end in Council Bluffs at the end of 2015, with no provision for the IGA to lease that dog track.

The legislation also provides for a $72 million payout, over the next seven years, to people involved in the Iowa greyhound industry. It's meant to help people like Jeff Junk in the industry's time of transition, especially breeders and others who decide to get out of the business.

Avilés calls the payout a "soft landing."

$65 million of that will come from Council Bluffs' casino, a for-profit enterprise, and the remaining $7 million will come from the not-for-profit Mystique Casino.

The matter of the payout, however, is a complicated one.

"None of us know how the pay-out will work," Crawford said. "The Iowa Racing and Gaming Commission will make that decision and likely will hire an expert to advise them on how to proceed."

"'Where's it going to go from here?' is the question," Junk said. "Nobody really seems to know."

Bob Hardison is also at a loss for concrete answers. He's president of the Iowa Greyhound Association.

"We just have to kind of see how this is all going to unfold," he told KWWL Monday in a phone interview. "We have all the rest of this year and all of next year at Bluffs Run."

He said the IGA will apply to the Iowa Racing and Gaming Commission to operate a dog track in Dubuque, at the leased facility.

"Assuming our application goes through...we still plan to be operating in 2015 in Dubuque, just as we are at Council Bluffs," Hardison said. "We have some lead time to get some of that figured out."

He admitted, however, Iowa's greyhound racing industry will, indeed, shrink.

"There will be a lot of dogs moved to other tracks in other states," Hardison said. "It will cut down the racing opportunities for us in Iowa, so certainly people wil have to scale back their operations somewhat."

It's an effect of Iowa's change in law.

"Over the years of our existence, we've been working this property under 99D of the Iowa code," Avilés explained Monday in his office. "What that means is - our title - we are a racing enclosure. By being a racing enclosure, we are mandated to race a number of days in order to conduct games of chance."

The new law, however, allows Mystique and Council Bluffs' casino to apply to the Iowa Racing and Gaming Commission to be regulated under Iowa Code 99F, in which they would be considered gambling structures.

Avilés said it also waives a major fee for the casinos.

"If a casino would have wished to change a status from one to the other, that includes some regulatory and licensing fees that, under this provision, we don't have to pay," Avilés said. "It can be as much as $10 million...so this is a big, big thing for us. This kind of ensures that Mystique and the DRA will be here for a long, long haul."

He said the change is important because, "if, at some point, the Iowa Greyhound Association wants to race elsewhere or ceases to race, our license is not in a limbo. We now have a license very similar to the Diamond Jo and other casinos, that we're not beholden to the racing structure component."

He said Mystique still has to supplement greyhound racing this current year. He anticipates that will be a total supplement of $3.2 million, with an additional $1 million in simulcast and operational expenses.
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