Economic Impact Of Turfway Renovation Will Reverberate Across Cincinnati Metro Area

Upon its scheduled reopening in the summer of 2022 after a $145 million renovation, Turfway Park in Florence, Ky. will be renamed Turfway Park Racing & Gaming. The facility will continue to host horse racing but also will contain approximately 1,500 new gaming machines, have a new clubhouse and have both synthetic and dirt tracks. The renovations are part of the new owner’s (Churchill Downs. Inc. of Louisville, Ky.) attempts to revitalize the track and bring back business which had been on the decline for the past few years.

The $145 million spent on the Turfway renovation will be not the only impact of the new complex’s effects on the Cincinnati region. In urban and regional economics, the concept of regional economic multipliers demonstrates that $100 in direct spending in a local economy usually has an impact beyond what the recipient of the $100 collects, whether the recipient is a household, a business or some other entity. Not only does the recipient receive $100, but that recipient in turn spends the $100 on purchases of other items. A restaurant which receives $100 in spending will in turn spend that money on payroll and supplies and keep some for profits. The net impact on a region could be two to three times the amount of the initial $100 of expenditures.

Therefore, the $145 million to be received by local construction contractors and other vendors will add a greater net amount to the economy of the Cincinnati area, which extends across counties in northern Kentucky, southeastern Indiana and southwestern Ohio. Using economic multipliers from IMPLAN economic analysis software, Table 1 shows that the $145 million will result in a total increase in the Cincinnati economy of around $279 million, with total employment of an estimated 1,624 jobs created due to the construction of the new facility (879 jobs), increased activity among the suppliers of the construction companies (295 jobs) and overall increased spending by the employees of the construction and supplier companies (450 jobs). The overall result for labor income or payroll gains is estimated to be $106.6 million.

Table 1-Construction Impacts

Impact

Employment

Labor Income

Output/Sales

1 – Direct

879.03

$61,289,660.29

$145,000,000.00

2 – Indirect

294.53

$21,169,866.45

$60,917,602.60

3 – Induced

450.01

$24,188,900.96

$72,907,243.75

Total

1,623.56

$106,648,427.69

$278,824,846.35

 

 

 

 

 

 

 

 

Additionally, since the new Turfway Park Racing & Gaming basically will be a “racino,” having elements of both horse racing and a gaming parlor, the impact of Turfway will be greater than what it was when it was a racetrack alone. Table 2 shows that for every 10 people employed at the racetrack, about 3 other jobs will be created in the Cincinnati region, and for every 10 employed at the gaming facilities, another 6 jobs will be created in the region. Every $100 in payroll generated at the track will yield around $52 more in labor income in the local economy, and $100 in payroll at the gaming parlor will create another $93 in payroll in the area. Finally, for every $100 in final output or sales originating from the track, another $53 will be created in the Cincinnati metro area, and for every $100 in output coming from the gaming parlor, another $60 in sales or output will be generated in the metropolitan region.

Table 2-Racing and Gaming Impacts

Jobs Multiplier

Labor Income Multiplier

Output/Sales Multiplier

Racetrack Operations

1.315778945

1.515359563

1.533571295

Gaming Operations

1.607160363

1.926513781

1.602750629

The decision to invest in and to rebuild Turfway and enhance its operation will have impacts that reverberate across a tri-state region of at least 12 to 15 counties. “Rebooting” Turfway will make it more competitive with other local racing and gambling establishments and allow the track to continue to compete with these establishments to the benefit of the local economy for more years to come.

Thomas E. Lambert is an Applied Economist with the Equine Industry Program at the University of Louisville.

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