NEWS BLOG (WSAU) Businesses that are dependent on government, beware.

There are many corners of our government that are dysfunctional… good luck getting them to perform the most basic functions. Like shifting sands, the rules can change at any moment. What you’ve been expecting to happen may not happen at all.

And if your issue is something that’s low-profile, or doesn’t have the potential to score political points, prepare to be on the back burner.

Here are just three examples from the world of horse racing. It’s a back-burner industry because so much gambling is done at casinos and through lotteries than at the horse track. But it’s still a highly regulated business, and nothing happens without government say-so.

• Consider the case of Jerry D. Campbell. He’s a horse owner in Michigan. Michigan’s last thoroughbred track closed a few years ago, so he spent his own money and built his own racetrack. Pinnacle Race Course opened two years ago near Detroit. Their first year they raced during the summer and early fall with spectators watching under a giant tent until the grandstand was built. Last year, with construction complete, they raced four days a week from June to October. This year, with Michigan facing a budget crisis, the state budget eliminated the gaming inspectors, racing stewards, and regulators that oversee horse racing (even though they are funded through taxes on the money that’s bet). Pinnacle Race Course was told to cut their 2009 season in half, and that they could race only six days for all of next year. They are planning to go to court. Imagine spending millions to build something, only to find out your operating schedule is cut back to a week.

• The New York Racing Association has been waiting eight years, and counting, for the State of New York to award a license to operate slot machines at Aqueduct Race Course. The license for the only legalized slot machines in New York City is incredibly valuable. Politically connected investors have been falling over themselves to woo state politicians. Governor George Pataki (R) couldn’t get democrats in the state legislature to award the license to investors who were seen as his political supporters. When Elliot Spitzer (D) was governor, he awarded the license to investors who were unable to pay the up-front fee. Now, with David Patterson (D) as a lame-duck governor, lawmakers want to delay the selection further so the not-yet-elected governor has something valuable to lavish on his supporters. Meanwhile, Aqueduct’s main grandstand is a half-completed construction zone, waiting for a slots parlor that may never be built. The racing association’s budgets assumed that slots money would be flowing years ago. New York State is losing out on millions of tax dollars each month.

• Long-shuttered Hialeah Race Course came back to life last fall with hopes of opening a casino and getting its thoroughbred license restored. State law allowed the track to operate a money-losing quarter-horse racing season to qualify for the casino and thoroughbred license a year later. But a ruling from that state’s attorney general says the law violates a long-standing agreement with Indian tribes. Hialeah has already run two months of racing at a loss, and now needs a ‘repair bill’ to pass the Florida legislature for its license to be valid.

You may not care about horse racing. Fewer and fewer people do. But there are lots of other business ventures that are dependent on government’s blessing… farming regulations… power plant permits… state environmental rules for factories…

Government paralysis is becoming more widespread. Woe to the business that needs the government to do something before they can operate.

Chris Conley
Operations Manager, Midwest Communications-Wausau
3.3.10