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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
MARK ONE
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended October 31, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period to
from ------------------------------------------------------------------------------------
Commission file number 0-1365
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SCIOTO DOWNS, INC.
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(Exact name of Registrant as specified in its charter)
Ohio 31-4440550
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
6000 South High Street, Columbus, Ohio 43207
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (614) 491-2515
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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FORM 10-K, CONTINUED
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT
Common Stock
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past ninety (90) days.
YES X NO
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The aggregate market value of the Registrant's voting stock held by
nonaffiliated stockholders as of December 22, 1997 was $2,801,073 or $12.25 per
share.
Registrant has only one class of shares outstanding, namely, common
shares. The number of common shares outstanding as of December 29, 1997 was
595,767.
Portions of the following documents are incorporated by reference:
1. Portions of the Annual Report to Stockholders for the year ended
October 31, 1997 are incorporated by reference in Part II.
2. Portions of Scioto Downs, Inc.'s definitive Proxy Statement furnished
to stockholders in connection with the Annual Meeting of Stockholders
to be held February 25, 1998 are incorporated by reference in Part
III.
The Exhibit index is on page 11.
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PART I
ITEM 1. BUSINESS
The Registrant's sole business is the ownership and operation of a
harness horse racing facility located at 6000 South High Street, Columbus, Ohio.
Racing operations at the South High Street facility started in 1959 and there
has been no material change in the method of conducting this business. In
addition to the racetrack itself, there are parking, grandstand, clubhouse and
eating facilities for Registrant's customers and barn and stable facilities for
the horses. Revenue is derived primarily from commissions on parimutuel wagering
(net of parimutuel taxes), admission fees to enter the facilities and
concessions, programs and parking. In 1997, commissions on parimutuel wagering
net of parimutuel taxes represented 65% of revenues, in 1996 61%, and in 1995
61%. In 1997, admissions represented 2% of revenues, in 1996 3%, and in 1995 4%.
In 1997, revenues from concessions, parking and programs amounted to 11% of
revenues, in 1996 12%, and in 1995 12%. During each off-season period in 1997,
1996 and 1995, the Registrant employed 17 persons. During the last three years,
average daily attendance has declined from 3,606 in 1995 to 3,295 in 1996 and to
2,219 in 1997. However, during 1997, because of the full-card simulcasting
program, Registrant did not track attendance for people entering the facility
prior to 6:00 p.m. The number of races conducted during a live racing program
varies from 9 races during the week to 11 or 12 races on weekends. The nearest
racetrack competition is Beulah Park, a thoroughbred horse racetrack
approximately 6 miles away. Beulah Park typically conducts live racing from the
middle of September until the first weekend of May, during which time Registrant
is not open. Registrant conducts its business pursuant to a permit issued
annually by the Ohio Racing Commission. All of the racing conducted by
Registrant is conducted in accordance with applicable Ohio statutes and the
rules and regulations of the Ohio Racing Commission. The Ohio Racing Commission
regulates and controls the forms of
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wagering that are permitted at the racetrack, the procedures to be followed as
to wagering, the wagering information to be provided to the public, the number
of races permitted during a racing program and the days and time of day racing
will be permitted. The Commission also approves full-card simulcasting
schedules. All persons who work at the racetrack must be licensed by the Ohio
Racing Commission. All owners, trainers, drivers and other persons involved in
the racing program must be licensed by the Ohio Racing Commission. For the
period covered by this report, Registrant was issued a permit by the Ohio Racing
Commission to conduct harness live racing at its facilities for a period of 61
days together with full-card simulcasting on those days and an additional 11
days (Sundays). Except on special occasions such as Memorial Day, July 4 and
Labor Day, Registrant conducts its racing at night 6 days a week. The 61 day
period in 1997 commenced May 3rd and continued through July 13th. Registrant
then leased its facilities to Mid-America Racing Association, Inc. for 54 days
of live racing, which period ended September 13, 1997. Mid-America Racing
conducted full-card simulcasting on live racing days and on an additional 8 days
(Sundays). This lease generated 5% of total revenue in 1997. This lease is on
file with the Commission. During 1997, major racing programs conducted at
Registrant's facilities included the Little Brown Jug Preview, the Scarlet
O'Hara, the Pink Bonnet, the Ohio Sires Stakes events and Ohio Fair stakes
events. Other forms of competition faced by Registrant during its summer racing
schedule include, in addition to the normal summer events, professional baseball
(minor league in Columbus and major league in Cincinnati and Cleveland), outdoor
music concerts and other similar entertainment events. Riverboat gambling has
been approved in Indiana and land-based casinos have been approved in Michigan.
These are recent developments and at the present time there is not sufficient
information to determine if these new gambling opportunities will have any
noticeable effect upon the wagering conducted at Registrant's facility.
Legalized gambling in the form of the Ohio lottery has been in existence for
many years and has had an adverse effect upon wagering at Registrant's facility.
In
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1996, the Ohio legislature approved legislation which permits full card
simulcasting at racetracks in Ohio. This legislation enables Ohio racetracks to
bring in to their facilities via television day and night full race programs
conducted at racetracks located outside the State of Ohio. As a result of this
legislation, during its regular racing meet from May to July, Registrant, in
addition to its regular live racing program in the evening shows at its facility
via television during the day and night races being conducted at other tracks in
Ohio and tracks outside of Ohio. Customers at Registrant's facility are able to
wager on all of these races. As a result of this legislation, Registrant and its
nearest racetrack competitor Beulah Park could be open year round conducting
both live racing and bringing racing in from out of state in competition with
each other. This situation would not be advantageous to either track and, as a
result, Registrant and Beulah Park entered into an agreement to not be open at
the same time and to share simulcasting revenues. Pursuant to this agreement,
during 1997 Beulah Park operated from the middle of September to the first of
May while Registrant was closed. During that period of time revenues derived
from simulcasting at Beulah Park at night when it is not conducting live racing
was, after deducting of certain expenses, shared with Scioto Downs ($228,503
during 1997). During the period that Registrant was open from May through the
middle of September while Beulah Park was closed, revenues derived by Registrant
from simulcasting during the afternoon hours when it is not conducting live
racing was, after deducting of certain expenses, shared with Beulah Park
($178,629). Overall, during 1997, as a result of full card simulcasting,
wagering on live racing declined and the additional wagering on simulcast races
offset the decline in wagering on live racing. No live racing or full card
simulcasting has been conducted at Registrant's facilities since September 13,
1997. The 1998 racing season will commence May 2, 1998. During the racing
season, the Registrant has employed approximately 350 people, most all of whom
are parimutuel clerks employed during the hours the track is open for
simulcasting and live racing which is approximately twelve noon to midnight. As
a part of the full card simulcast racing program, Registrant sends its
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live races via television to all other tracks in Ohio and as many facilities
outside the State of Ohio that it can contract with to receive the signal, which
could be as many as 25 facilities. Registrant will receive a percentage (in most
instances 3%) of the amount wagered on its races at these other facilities
outside the State of Ohio. Total export signal revenue was $212,594 in 1997.
ITEM 2. PROPERTIES
Registrant's place of business is located at 6000 South High Street,
Columbus, Ohio. Registrant owns in fee approximately 173 acres of land at this
location. Situated thereon are the physical facilities necessary for the
operation of a harness horse racing business, including the race track,
grandstand with a capacity of 10,000, and enclosed clubhouse buildings with a
capacity of 1,500 for customers, in which are located eating and pari-mutuel
wagering facilities (including simulcasting), barns, a paddock, and related
facilities for the horses, drivers, and trainers. In addition, a substantial
(approximately 6,000-space) parking area is provided for customers. These
facilities are used fully during the racing season, which covered 134 days
commencing in May and ending in mid-September.
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ITEM 3. LEGAL PROCEEDINGS
Registrant is not a party to any material pending legal proceedings
other than routine litigation incidental to its business, most of which is
covered by insurance.
Registrant has no knowledge of any material pending legal proceedings
to which any director, officer or affiliate of the Registrant, any owner of
record or beneficiary of more than five percent of the voting securities of the
Registrant, or any associate of any such director, officer or security holder is
a party adverse to the Registrant or has a material interest adverse to the
Registrant.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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PART II
The following items are incorporated herein by reference from the indicated
pages of the Annual Report to Stockholders for the fiscal year ended October 31,
1997:
ANNUAL REPORT TO
STOCKHOLDERS SEQUENTIAL PAGES
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
18
Item 6. SELECTED FINANCIAL DATA 16
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
13-16
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
4-12
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not applicable
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PART III
ITEMS 10, 11, 12 and 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT; AND CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Information called for by Items 10, 11, 12 and 13 is incorporated
herein by reference to the definitive Proxy Statement of the Registrant dated
January 26, 1998, relating to the Annual Meeting of Stockholders to be held on
February 25, 1998.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SCIOTO DOWNS, INC.
Index to Financial Statements and Financial Statement Schedules
REFERENCE PAGE
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FORM 10-K ANNUAL REPORT
ANNUAL REPORT TO STOCKHOLDERS
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(a) 1. Financial Statements
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Data incorporated by reference from the attached 1997 Annual Report
to Stockholders of Scioto Downs, Inc.:
Report of Independent Accountants on Financial Statements 13
Balance Sheets as of October 31, 1997 and 1996 4
Statements of Operations for the years ended October 31,
1997, 1996 and 1995 5
Statements of Stockholders' Equity for the years ended
October 31, 1997, 1996 and 1995 6
Statements of Cash Flows for the years ended October 31,
1997, 1996 and 1995 7
Notes to the Financial Statements 8-12
(a) 2. Financial Statement Schedules
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Financial statement schedules are omitted because they are not
required or are not applicable.
(a) 3. Exhibits
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See Index to Exhibits at Page 11.
(b) Reports on Form 8-K
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No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
(c) See Index to Exhibits at Page 11.
(d) Not applicable or not required
(e) Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SCIOTO DOWNS, INC. (Registrant)
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By /s/ Robert S. Steele
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President & Chief Operating Officer and a
Director
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Title
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant, and in the capacities and on the dates indicated.
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Date: January 30, 1998 By /s/ Robert S. Steele
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President & Chief Operating Officer and a
Director
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Title
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Date: January 30, 1998 By /s/ LaVerne A. Hill
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Vice President and a Director
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Title
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Date: January 30, 1998 By /s/ William C. Heer
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Treasurer and a Director
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Title
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Date: January 30, 1998 By /s/ John J. Chester
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Director
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Title
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Date: January 30, 1998 By /s/ John F. Fissell
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Director
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Title
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Date: January 30, 1998 By /s/ Robert E. Suchy
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Controller
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Title
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INDEX TO EXHIBITS ANNUAL REPORT ON FORM 10-K
for the year ended October 31, 1997
EXHIBIT NO. DESCRIPTION
3A Articles of Incorporation of the Registrant, as amended to date *
3B Code of Regulations of the Registrant, as amended to date *
10A Lease with Hilliard Raceway, Inc., now Mid-America Racing *
Association, Inc., and amendment thereto
10B Simulcasting agreement with Beulah Park *
13 Annual Report to Stockholders
27 Financial Data Schedule
* Previously filed with Securities and Exchange Commission
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