SC horse industry needs help. Is legalizing gambling the right bet?

ELLOREE — In the 1970s and '80s, Frank “Goree” Smith had to turn horses away from his stables in rural Orangeburg County. There just wasn’t room.

Attracted by South Carolina’s warm winters and Smith’s growing reputation as a trainer who could pick a winner, northern thoroughbred owners competed to send their horses to Elloree Training Center.

Smith had as many as 70 clients and cared for up to 350 horses during the winters back then. But since the 1990s, business has slumped and took a turn for the worse around 2017, Smith said. Today, he has about 150 horses and 20 to 30 clients.

“It’s bottomed out,” he said from behind his desk in his wood-paneled office ringed by trophies and plaques.

Over the last few decades, Southern states have invested in modern racetracks and winter stables to compete with the declining nature of South Carolina’s industry while states across the country have begun lavishing cash rewards on winning steeds bred or stabled within their borders.

“We have nothing to offer here other than people know the climate here is perfect,” Smith lamented. “It’s just, slowly, we didn’t do anything while others did.”

Across South Carolina the historic equine industry has fallen on hard times. Stables are empty, blacksmiths are closing up shop and races are dwindling.

Between 2001 and 2020, the number of mares bred annually in South Carolina fell from 232 to 26, while over the same period the dollar amount that S.C.-bred horses have won in races dropped from $607,400 to $65,000 a year, according to a 2022 legislative study committee.

Now, equine enthusiasts believe gambling could be their salvation. But legal wagering would require South Carolina lawmakers to buck their long-held reticence to state-sanctioned betting.

A bill with high-profile bipartisan backing is making its way through the Statehouse that would establish a commission to license online bookie apps for users to bet on horse track racing around the country. A cut of the revenue would go back to the state to dole out as grants to the ailing equine industry.

Promoters of the legislation envision at least some of the money could be used for incentives to coax horse owners back to South Carolina.

Advocates of the equine industry warn that without intervention, the state’s stables and racecourses may soon be empty. But in a state with a governor vehemently opposed to betting, staking the industry’s survival on gambling might prove a risky bet.

Interest in horse racing nationally has dropped off since the 1990s and climate change has warmed Northern winters, according to Toby Edwards, president of the Carolina Cup Racing Association, which puts on the state’s premier horse race every spring in Camden.

“You start adding all these different things together and suddenly places like South Carolina are no longer relevant,” Edwards said.

Springdale Training Center, of which Edwards is the director, currently has only 50 of its 160 stables filled, and in recent years cut the Colonial Cup races it used to run in the spring.

Other states’ incentives have played a considerable role in the local industry's decline.

“Unfortunately, we’re getting kicked to the curb by other states who have incentives,” Deborah McCutchen, who runs the McCutchen Training Center in Kingstree, told a state Senate subcommittee Feb. 7. “It’s killing us.”

In 2022, at least 25 states offered incentive outlays, according to Trainer Magazine, a trade publication. Virginia, for instance, gives owners of Virginia-bred horses a 25 percent bonus on winnings at Mid-Atlantic races. Most incentive programs are funded, at least partially, by gambling proceeds.

The bill making its way through the Legislature would create a state commission to license up to three applicants to accept South Carolinians' wagers on out-of-state horse races, and those licensees would pay 10 percent of their earnings into a fund to support the equine industry.

The bill would only allow pari-mutuel betting, in which winners split the pool, with advanced deposits, which means bettors would have to load money onto an account before wagering.

The commission could generate $1.8 million a year for the equine industry fund, according to an estimate from the state’s budget forecasters.

Proponents have identified plenty of uses for the money like funding work on the state’s horse trail system and university equine programs, but backers’ principal goal for the money is an incentive system.

“We’re just trying to infuse dollars into an industry that’s desperately been unattended to for a long time,” said Rep. Russell Ott, D-St. Matthews, the bill’s primary champion in the House. “The more horses we have here means our stables are full, and that means that economy around the horses is flourishing.”

Elloree will learn what the equine industry’s slow death could mean for rural communities the hard way this spring.

After organizational efforts fell apart, Smith had to cancel the 2023 edition of the Elloree Trials, horse races that have been held every year at the training center's track since 1963, save a COVID-19 pandemic hiatus.

Between 3,500 and 6,000 people usually pour into the one-stoplight town of 600 for the weekend of the trials, Smith said.

“It’s a huge impact on our economy,” said Kristie Anderson, a local realtor and the president of the Elloree Business Association. “Merchants won’t get their big boom weekend.”

It feels like part of the town’s identity has been lost, too, Anderson said. “It’s just a part of our community.”

Though a 2022 Winthrop University poll found a majority of South Carolinians surveyed support legalizing sports gambling, many conservatives remain staunchly opposed on moral grounds. Voters only narrowly approved the lottery two decades ago, and it remains the only legal form of gambling in the state other than charity raffles.

Signs of opposition emerged when two conservative Upstate senators, Michael Gambrell, R-Honea Path, and Richard Cash, R-Powdersville, cast the two "no" votes against sending the equine gambling bill to the full Senate at a Feb. 8 committee meeting.

The focus on the economic benefits of gambling ignore the human cost of gambling addiction, Cash said after the vote.

Others say it's the start of the slippery slope for other forms of betting to get a foot in the door.  

“Everything we want to push the envelope with begins narrowly and then becomes broad,” said Tony Beam, the public policy director for the South Carolina Baptist Convention. “Surely we can be a little more creative figuring out how to help people who are in the equine industry to be successful without starting a whole new set of problems that will arise from having gambling.”

Supporters counter the bill would capture proceeds from betting that are already going on illegally rather than expand gambling.

“South Carolina’s actually missing out on that money because people are doing it and that money’s going offshore,” Sen. Katrina Shealy, a Republican co-sponsor of the Senate version of the legislation, said at the Feb. 8 committee meeting.

Nonetheless, legislators would likely need to override a gubernatorial veto if the legislation survives, said Jim Rex, who led the Palmetto Forum for Gaming Studies, which researched efforts to expand gambling in 2019.

Rex, who is also a former Democratic state superintendent of education, believes the bill has a better shot at becoming law than most other recent efforts to expand gambling.

“Horse racing has sort of a genteel … demeanor about it as opposed to other types of gambling,” he said.

History runs deep at the Elloree Training Center. Back in the 1940s, then-Gov. Strom Thurmond’s crackdown on vice scared off the bookies and snuffed out racing at Elloree for a time, Smith recalled as he walked the property on a cold, drizzly day this month.

Now, 80 years later, Smith is hoping South Carolina brings wagering back to save the industry to which he’s dedicated his life.

“We’re still going to sink some more, but who knows what's beyond that,” Smith said.