
DATE: Wednesday, March 5, 1997              TAG: 9703050483
SECTION: LOCAL                   PAGE: B5   EDITION: FINAL 

SOURCE: BY DAVID POOLE, STAFF WRITER 

DATELINE: PROVIDENCE FORGE                  LENGTH:   74 lines

COLONIAL DOWNS COUNTS ON SUNSHINE, STOCKS

After two years of lawsuits and delays, Colonial Downs is rising in a pine thicket in New Kent County.

The steel frame of the grandstand is in place. The oval of the horse track is taking shape in the red-clay mud. The parking lots are cleared, giving eastbound motorists on Interstate 64 a full view of Virginia's first pari-mutuel track in modern times.

A giant, three-tiered banner reads: ``Colonial Downs Horse Racing Coming this Summer.''

Construction crews in mud-splattered boots on Tuesday were working against a state-imposed deadline to open the 345-acre site by Sept. 1.

Marketing Director Hugh R. Mellon said that, with a little sunshine and some luck, Colonial Downs might open sooner.

``Maybe August,'' Mellon said.

Meanwhile, in financial markets far away from the muddy fields of New Kent County, Colonial Downs is pitching a public stock to investors.

The company hopes to raise $38.9 million by selling shares of stock in the horse track and affiliated gambling parlors in Chesapeake and Richmond.

James Weinberg, a Richmond lawyer representing Colonial Downs, said the Securities and Exchange Commission is expected to ``go effective'' with the stock offering next week.

While horse racing has become the old gray mare of the gambling industry, some analysts believe the pari-mutuel industry can rejuvenate itself by installing a form of slot machines known as Video Lottery Terminals.

Delaware and West Virginia have approved the terminals at horse tracks. Slots legislation is pending in Maryland and Pennsylvania.

The terminals have enabled Delaware Park to boost daily prizes for horse owners to $160,000, slightly more than the $150,000 Colonial Downs will pay each day during its inaugural season of 30 racing dates.

``It's amazing,'' Mellon said of the Delaware track. ``I think it's going to be higher when it's all over because they keep racking it up.''

In a disclosure to investors, Colonial Downs warns of the difficulty in competing with other mid-Atlantic horse tracks that supplement their revenues with the fast-paced slots gaming.

Colonial Downs officials say they have no plans to ask the General Assembly to approve casino-style gaming at the New Kent track or off-track betting parlors.

Last summer, however, Colonial Downs Chairman Jeffrey Jacobs told a group of Northern Virginia horsemen he would seek lottery terminal slots if it were necessary to compete with tracks in neighboring states.

The Virginia Lottery Board has the authority to approve the terminals, but lottery officials say they will not act without direction from the governor and General Assembly.

Gov. George F. Allen, who leaves office next year, opposes slots. The two men who want to succeed him - Democrat Donald S. Beyer Jr. and Republican James S. Gilmore III - have vowed to veto casino-style gaming at Colonial Downs.

But some horse analysts say horse tracks are well positioned to introduce slots, even in states with a history of opposition to casino-style gaming.

``The most important thing tracks offer is community roots and familiarity - no small prize for outside gaming companies,'' Nancy Todd, a Florida-based political consultant, wrote in a recent edition of Blood Horse magazine.

``When the time for writing legislation comes, a measure to allow gaming at pre-existing tracks is many times easier to tell the public than creating brand-new casino locations.'' ILLUSTRATION: BILL TIERNAN photos/The Virginian-Pilot

Todd Newsome and Chuck Gilliam, members of a survey crew, work near

the future grandstand at the Colonial Downs site in New Kent County.

Construction crews are working against a state-imposed deadline of

Sept. 1 to open the 345-acre facility.

The grandstand and clubhouse are beginning to take shape off I-64

between Williamsburg and Richmond. Away from the muddy construction

site, Colonial Downs is pitching public stock, hoping to raise $38.9

million.