UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
- ---------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
Commission File Number 33-67738
SAM HOUSTON RACE PARK, LTD.
(Exact name of Registrant as Specified in its Charter)
TEXAS 76-0313877
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
ONE SAM HOUSTON PLACE 77064
7575 NORTH SAM HOUSTON PARKWAY (Zip Code)
WEST
HOUSTON, TEXAS
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (281) 807-8700
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 (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
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INDEX
PAGE
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1999 and December 31, 1998 3
Consolidated Statements of Operations for the three and six months
ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the six months ended
June 30, 1999 and 1998 5
Condensed Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature S-1
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
June 30, December
1999 31, 1998
--------
--------
(Unaudit
ed)
ASSETS
Current assets:
Cash and cash equivalents $ 6,612 $ 3,764
Restricted cash 3,779 3,608
Accounts receivable, net of allowance for doubtful
accounts of $54 and $51, respectively 953 2,126
Prepaid expenses and other current assets, net of
accumulated amortization of $20 and $14, respectively 645 492
-------- --------
Total current assets 11,989 9,990
-------- --------
Property and equipment, net of accumulated depreciation
of $3,524 and $2,989, respectively 25,372 25,499
-------- --------
$37,361 $35,489
======== ========
LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Accounts payable $ 1,694 $ 2,232
Property taxes payable 525 1,040
Other liabilities 1,923 1,938
Amounts due to horsemen 2,959 2,295
-------- --------
Total current liabilities 7,101 7,505
-------- --------
Long-term liabilities:
Notes payable 45,567 41,081
Deferred management fees 3,340 2,826
-------- --------
Total liabilities 56,008 51,412
-------- --------
Commitments and contingencies (Notes 1 and 6)
Partners' deficit (18,647) (15,923)
-------- --------
$37,361 $35,489
======== ========
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
Three Months Six Months Ended
Ended June 30, June 30,
----------------- -----------------
1999 1998 1999 1998
-------- -------- -------- --------
(Unaudited)
Revenues:
Pari-mutuel commissions, net $ 3,407 $ 2,702 $ 9,296 $ 7,322
Food and beverage sales 631 553 1,831 1,572
Admissions, parking and other 778 740 1,782 1,662
-------- -------- -------- --------
4,816 3,995 12,909 10,556
-------- -------- -------- --------
Costs and expenses:
Cost of pari-mutuel operations 378 341 928 792
Cost of food and beverage
operations 331 302 902 786
Other operating 687 697 1,399 1,454
Salaries and wages 1,694 1,483 3,996 3,670
Management and other professional
fees 523 475 989 897
Marketing and advertising 353 240 802 729
Utilities 247 267 560 593
Property taxes 280 299 563 605
Depreciation and amortization 272 242 541 481
General and administrative 204 221 440 464
-------- -------- -------- --------
4,969 4,567 11,120 10,471
-------- -------- -------- --------
Income (loss) from operations (153) (572) 1,789 85
Other income (expense):
Interest income 76 56 126 82
Interest expense (2,439) (1,973) (4,639) (3,751)
-------- -------- -------- --------
(2,363) (1,917) (4,513) (3,669)
-------- -------- -------- --------
Net loss $(2,516) $(2,489) $(2,724) $(3,584)
======== ======== ======== ========
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
Six Months Ended
June 30,
-----------------
1999 1998
-------- --------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,724) $(3,584)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 541 481
Amortization of discounts on long-term
debt 1,548 1,001
(Increase) decrease in restricted cash (171) 1,604
Decrease in accounts receivable 1,173 695
Increase in prepaid expenses and other (159) (282)
Decrease in accounts payable (538) (678)
Increase in deferred management fees 514 472
Increase in accrued interest 2,946 2,651
Decrease in property taxes payable (515) (543)
Increase (decrease) in amounts due to
horsemen 664 (1,014)
Decrease in other liabilities (15) (42)
-------- --------
Net cash provided by operating
activities 3,264 761
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (408) (239)
-------- --------
Net cash used for investing
activities (408) (239)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (8) (12)
-------- --------
Net cash used for financing
activities (8) (12)
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 2,848 510
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,764 2,728
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,612 $ 3,238
======== ========
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
1. BASIS OF PRESENTATION AND ORGANIZATION AND FUTURE CASH REQUIREMENTS
BASIS OF PRESENTATION AND ORGANIZATION
The accompanying consolidated financial statements include the
accounts of Sam Houston Race Park, Ltd. (the "PARTNERSHIP"), a Texas
limited partnership, and its wholly owned subsidiaries, New SHRP Capital
Corp. ("NEW CAPITAL") and SHRP Valley LLC ("SHRP VALLEY"). The Partnership
operates a pari-mutuel horse racing facility in Houston, Texas (the "RACE
PARK"). The managing general partner of the Partnership is SHRP General
Partner, Inc. (the "MANAGING GENERAL PARTNER"), a wholly owned subsidiary
of MAXXAM Inc. ("MAXXAM"). The Partnership is also comprised of an
additional general partner, SHRP Equity, Inc. (the "ADDITIONAL GENERAL
PARTNER") and limited partner interests. As of June 30, 1999, wholly owned
subsidiaries of MAXXAM held, directly or indirectly, an aggregate 98.3%
interest in the Partnership, consisting of a 33.5% general partner interest
(including a 32.5% interest by virtue of its ownership of 97.5% of the
common stock of the Additional General Partner) and a 64.8% limited partner
interest.
The information contained herein is condensed from that which
would appear in the annual financial statements; accordingly, the
consolidated financial statements included herein should be reviewed in
conjunction with the consolidated financial statements and related notes
thereto contained in the Annual Report on Form 10-K filed by the
Partnership with the Securities and Exchange Commission for the fiscal year
ended December 31, 1998 (the "FORM 10-K"). Any capitalized terms used but
not defined herein have the same meaning given to them in the Form 10-K.
Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end. The results of operations for the
interim periods presented are not necessarily indicative of the results
which can be expected for the entire year. Certain reclassifications of
prior period information were made to conform to the current presentation.
All significant intercompany transactions have been eliminated in
consolidation. The accompanying financial information is unaudited;
however, the information includes all adjustments of a normal recurring
nature which are, in the opinion of management, necessary to present fairly
the consolidated financial position of the Partnership at June 30, 1999,
the consolidated results of its operations for the three and six months
ended June 30, 1999 and 1998, and its consolidated cash flows for the six
months ended June 30, 1999 and 1998.
FUTURE CASH REQUIREMENTS
Although the Partnership incurred a loss from operations of $153
during the three month period ended June 30, 1999, the Partnership has
generated income from operations of $1,789 and cash flow from operations of
$3,264 during the first six months of 1999. In addition, the Partnership
had cash and cash equivalents of $6,612 and a $1,700 line of credit at June
30, 1999 available to fund the operating activities of the Partnership.
Also, the Partnership is able to defer cash interest payments on the
Extendible Notes until September 1, 2001 or until certain conditions are
met, and to defer the payment of management fees until two consecutive
interest payments on the Extendible Notes have been paid in cash. The
deferral of these items has significantly improved the liquidity of the
Partnership.
The Partnership is continuing to put forth marketing efforts to
increase attendance and pari-mutuel handle at the Race Park in order to
generate additional income. Further, management is analyzing various
proposals to develop new forms of businesses at the Race Park and elsewhere
in an effort to raise new sources of income and to draw additional
attendance to the Race Park. See Note 6 for a description of one such
venture which is currently pending. Nonetheless, there can be no assurance
that any of these efforts will be successful.
The Extendible Notes, together with accrued interest, must be
retired in September 2001, unless the applicable extension provisions
apply. To the extent the Partnership is unable to repay or refinance the
Extendible Notes, alternative sources of funding will be necessary.
Although 97.5% of the Extendible Notes are owned by MAXXAM, there can be no
assurance that the Partnership will be able to repay or refinance the
Extendible Notes or that alternative sources of funding will be available
to the Partnership, if needed.
2. RESTRICTED CASH
The Partnership's restricted cash, as shown on the accompanying
consolidated balance sheet at June 30, 1999 and December 31, 1998, includes
deposits held for the benefit of horsemen for purses, stakes and awards and
amounts reserved for the payment of property taxes.
3. RACING OPERATIONS
The Race Park offers pari-mutuel wagering on live thoroughbred or
quarter horse racing during meets and on simulcast horse and greyhound
racing throughout the year. The Race Park earns revenues on live racing
and on simulcast racing as both a guest and host track. Under the Racing
Act, the Partnership's net commission revenue on live racing is a
designated portion of the pari-mutuel handle. The Race Park receives
broadcasts of live racing from other racetracks under various guest
simulcasting agreements and provides broadcasts of live racing conducted at
the Race Park to other wagering outlets under various host simulcasting
agreements. Under these agreements, the Partnership receives pari-mutuel
commissions of varying percentages of simulcast pari-mutuel handle.
A summary of the pari-mutuel operations for the three and six
months ended June 30, 1999 and 1998 is as follows:
Three Months Six months Ended
Ended June 30, June 30,
----------------- -----------------
1999 1998 1999 1998
-------- -------- -------- --------
Number of live race days 7 4 57 49
Live handle $ 1,531 $ 818 $ 11,093 $ 9,366
Guest simulcasting handle 32,847 27,487 61,221 50,846
Host simulcasting handle 17,210 7,485 126,253 85,076
-------- -------- -------- --------
$ 51,588 $ 35,790 $198,567 $145,288
======== ======== ======== ========
Net commissions from live
racing $ 201 $ 97 $ 1,457 $ 1,121
Net commissions from guest
simulcasting 2,867 2,457 5,390 4,534
Net commissions from host
simulcasting 339 148 2,449 1,667
-------- -------- -------- --------
$ 3,407 $ 2,702 $ 9,296 $ 7,322
======== ======== ======== ========
4. NOTES PAYABLE
Notes payable consist of the following:
June 30, December
1999 31,1998
-------- --------
11% Senior Secured Extendible Notes due
September 1, 2001 (net of unamortized
discount of $11,137 in 1999 and $12,684
in 1998) $43,851 $39,436
Accrued interest to be paid in-kind 1,512 1,433
-------- --------
45,363 40,869
Unsecured promissory notes 189 197
Payable to Limited Partners 23 23
-------- --------
Total 45,575 41,089
Less current portion included in other
liabilities (8) (8)
-------- --------
$45,567 $41,081
======== ========
The Partnership is amortizing the difference between the
aggregate principal amount of the Extendible Notes and their estimated fair
value as of the date of implementation of the reorganization of the
Partnership as additional interest expense using the effective interest
method.
The Extendible Notes are non-recourse to the partners; however,
they are secured by virtually all of the Partnership's property, including
rents, revenues, profits and income from the operation of the Race Park.
In addition, the Class 1 racing license for the Race Park is subject to a
negative pledge in favor of the trustee for the Extendible Notes.
5. RELATED PARTY TRANSACTIONS
Management and other professional fees include $260 and $239 for
the three months ended June 30, 1999 and 1998, respectively, and $514 and
$472 for the six months ended June 30, 1999 and 1998, respectively, in
management fees due to the Managing General Partner. Such amounts include
interest of $72 and $51 for the three months ended June 30, 1999 and 1998,
respectively, and $139 and $97 for the six months ended June 30, 1999 and
1998, respectively. Payment of management fees, including accrued
interest, is deferred until two consecutive interest payments on the
Extendible Notes have been paid in cash; accordingly, these fees have been
shown on the accompanying consolidated balance sheet as deferred management
fees under long-term liabilities.
The Partnership incurred service fees and related costs of $131
and $133 for the three months ended June 30, 1999 and 1998, respectively,
and $260 and $266 for the six months ended June 30, 1999 and 1998,
respectively, related to costs incurred for services provided by MAXXAM and
certain of its subsidiaries. Included in accounts payable at June 30, 1999
and December 31, 1998 were obligations to MAXXAM for such costs of $71 and
$45, respectively. The Partnership also incurred fees of $20 and $45
during the three months ended June 30, 1999 and 1998, respectively, and $42
and $59 during the six months ended June 30, 1999 and 1998, respectively,
for legal and other consulting services performed by other affiliates.
6. COMMITMENTS AND CONTINGENCIES
During March 1999, the Race Park formed SHRP Valley LLC, a
wholly-owned limited liability company, which then entered into a six-year
agreement with a company to lease a greyhound track located in Harlingen,
Texas. A management agreement was also entered into between the parties in
connection with the management of the associated pari-mutuel wagering
license. The Race Park also has an option to purchase 100% of the equity
interest in the company that owns the greyhound track and the wagering
license for the term of the lease, subject to certain conditions. Lease
payments under the terms of the agreement total $300 annually. Race Park
management plans to re-open the facility and conduct year-round horse and
dog simulcasting and a season of live greyhound racing at the track.
Currently, the parties are in a due diligence period, which has been
extended for the purpose of obtaining Texas Racing Commission approval for
the agreements.
The Partnership is involved in claims and litigation arising in
the ordinary course of business. While uncertainties are inherent in the
final outcome of such matters and it is presently impossible to determine
the actual costs that ultimately may be incurred, management believes that
the resolution of such uncertainties and the incurrence of such costs
should not have a material adverse effect upon the Partnership's
consolidated financial position, results of operations or liquidity.
Also, see Note 1 for a discussion of the future cash requirements
of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND THE RESULTS OF OPERATIONS
The following should be read in conjunction with the unaudited
consolidated financial statements contained elsewhere herein and in the
Form 10-K. Any capitalized terms used but not defined herein have the same
meaning given to them in the Form 10-K.
This section contains statements which constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may,"
"estimates," "will," "should," "plans" or "anticipates" or the negative
thereof or other variations thereof or comparable terminology, or by
discussions of strategy. Readers are cautioned that any such forward-
looking statements are not guarantees of future performance and involve
significant risks and uncertainties, and that actual results may vary
materially from those in the forward-looking statements as a result of
various factors. These factors include the effectiveness of management's
strategies and decisions, general economic and business conditions, new or
modified statutory or regulatory requirements, and changing prices and
market conditions. This section and the Partnership's Form 10-K identify
other factors that could cause such differences. No assurance can be given
that these are all of the factors that could cause actual results to vary
materially from the forward-looking statements.
RESULTS OF OPERATIONS
Results of operations between periods are generally not
comparable due to the timing, varying lengths and types of racing meets
held; accordingly, results of operations for interim periods are not
necessarily indicative of the results which can be expected for the entire
year. Historically, the Race Park has derived a significant amount of its
annual net pari-mutuel commissions from live racing and host simulcasting.
Therefore, net pari-mutuel commissions have typically been highest during
the first and fourth quarters of the year.
The following table presents selected attendance and wagering
information for the three and six months ended June 30, 1999 and 1998:
Three Months Six months Ended
Ended June 30, June 30,
----------------- -----------------
1999 1998 1999 1998
-------- -------- -------- --------
Number of live race days 7 4 57 49
Number of simulcast only days 84 87 124 132
Average daily attendance - live race
days 3,620 3,545 3,170 3,171
Average daily attendance - simulcast
only days 1,176 982 1,008 806
60
Average live per capita wager $ 60 $ 58 $ 61 $ 60
Average combined live and guest per
capita gross wager - live race
days 187 159 194 174
Average guest per capita gross wager -
simulcast only days 300 305 299 311
(Amounts in thousands)
Live handle $ 1,531 $ 818 $ 11,093 $ 9,366
Guest simulcasting handle - horses 26,770 25,981 49,794 48,893
Guest simulcasting handle - greyhounds
6,077 1,506 11,427 1,953
Host simulcasting handle 17,210 7,485 126,253 85,076
-------- -------- -------- --------
$ 51,588 $ 35,790 $198,567 $145,288
======== ======== ======== ========
Net pari-mutuel commissions:
Live racing $ 201 $ 97 $ 1,457 $ 1,121
Guest simulcasting - horses 2,158 2,221 4,047 4,194
Guest simulcasting - greyhounds 709 236 1,343 340
Host simulcasting 339 148 2,449 1,667
-------- -------- -------- --------
Total net pari-mutuel commissions $ 3,407 $ 2,702 $ 9,296 $ 7,322
======== ======== ======== ========
Revenues. The Partnership's principal source of revenue is from
pari-mutuel commissions generated from wagering on live races and simulcast
races as both a guest and host track. The Race Park conducted three and
eight more live racing performances during the three and six months ended
June 30, 1999, respectively, compared to the same periods of 1998, which
contributed to the increase in live and host pari-mutuel handle and
commissions. Live and host simulcasting handle and net pari-mutuel
commissions increased significantly during the three and six months ended
June 30, 1999 as compared to the same periods in 1998. Live handle
increased by 87% and 18% and live commissions increased by 107% and 30% for
the three and six months ended June 30, 1999, respectively, over the same
periods in 1998 due to the addition of the three and eight live racing days,
respectively. Host simulcasting handle increased by 130% and 48% and
host commissions increased by 129% and 47% for the three and six months
ended June 30, 1999, respectively, due to an increase in wagering at most
of the racetracks and off-track wagering facilities receiving the Race
Park's thoroughbred simulcast signal and due to the additional live racing
days. The 20% and 25% increase in average daily attendance on simulcast
only days and similar increased simulcast attendance on live days for the
three and six months ended June 30, 1999, respectively, resulted in a 20%
increase in total handle and net pari-mutuel commissions from guest
simulcasting compared to the same periods in 1998. Net commissions on
guest horse simulcasting decreased slightly due to a change in how amounts
are allocated to purses for winning horsemen in accordance with the Texas
Racing Act. In total, guest commissions increased primarily due to the
addition of cross-breed simulcasting as described in the following
paragraph.
During March 1998, the Partnership began offering wagering on
greyhound racing broadcasts from Corpus Christi Greyhound and in June 1998,
the Partnership began offering wagering on races broadcast from certain
out-of-state greyhound tracks. Average daily wagering on simulcast
greyhound signals approximated $67,000 and $63,000 per day for the three
and six months ended June 30, 1999, respectively. It is uncertain how the
introduction of cross-breed wagering impacted guest simulcasting on horses
and to what extent, if any, its growth has been slowed by greyhound
wagering.
Food and beverage revenues increased by 14% and 16% during the
three and six months ended June 30, 1999, respectively, compared to the
same periods in 1998 due to the additional live race days and to the
increases in average daily attendance discussed above. Admissions, parking
and other revenue also increased for the three and six months ended June
30, 1999 compared to the same periods in 1998 due primarily to the increase
in the number of live race days.
Income (loss) from Operations. The loss from operations for the
three months ended June 30, 1999 was $153,000 versus a loss of $572,000 for
the same period in 1998 as revenues increased by 21% while costs and
expenses rose only 9%. Income from operations for the six months ended
June 30, 1999 was $1,789,000 compared to $85,000 for the same period in
1998, as revenues increased by 22% while costs and expenses increased by
only 6%. In addition to the factors affecting revenues between the periods
discussed above, cost of operations and salaries and wages declined as a
percent of revenue from 70% to 64% and from 64% to 56% for the three and
six months ended June 30, 1999, respectively, as compared to the same
periods in 1998. Overall, costs and expenses generally increased with the
increase in revenues and with the increase in live racing days.
Net Loss. Net loss reflects the income from operations as
described above, interest income and interest expense, including
amortization of the discount on the Extendible Notes. Interest expense
increased during the three and six months ended June 30, 1999 as compared
to the prior periods due to the continuing increase in the balance of
Extendible Notes as accrued interest is paid in-kind with additional
Extendible Notes.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Partnership had cash and cash equivalents
of $6,612,000 compared to $3,764,000 at December 31, 1998. The increase in
cash and cash equivalents is due to the accumulation of cash generated from
operating activities, offset by capital expenditures made during the
period. At June 30, 1999, the Partnership also had restricted cash of
$3,779,000 compared to $3,608,000 at December 31, 1998. The increase in
restricted cash was due to the accumulation of amounts due to horsemen for
purses, stakes and awards related to the summer quarterhorse meet and the
fall thoroughbred meet offset by the annual payment of property taxes. The
balance of Extendible Notes has increased during the six months ended June
30, 1999 due to the issuance of additional Extendible Notes as payment in-
kind for accrued interest and the amortization of the discount on the
Extendible Notes as described in Note 4 to the Consolidated Financial
Statements included in Item 1.
See Note 1 to the Consolidated Financial Statements for a
discussion of the future cash requirements of the Partnership.
YEAR 2000
The Partnership is currently in the process of assessing both its
information technology systems and its embedded technology in order to
determine that they are, or will be, Year 2000 compliant. Management has
already determined that its financial data processing hardware and software
are compliant and is presently working with certain key third parties and
support groups of its embedded technology to ensure that they are taking
appropriate measures to assure compliance. Management believes that the
total cost of remediation to the Partnership will not exceed $100,000. The
most significant area still being evaluated pertains to certain key third
parties, in particular, the firm that provides totalisator services to it
and others in the horse racing industry. These data processing services
are required in order for the Race Park to conduct pari-mutuel wagering in
the State of Texas. Management, as well as the thoroughbred racing
industry's association, has received assurances that such systems will be
compliant by the third quarter of 1999. However, management is evaluating
other third party providers of these and other services and equipment in
the event that any such vendors cannot provide evidence of Year 2000
compatibility in sufficient time to effect a change.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Partnership is involved in various claims, lawsuits and other
proceedings. While uncertainties are inherent in the final outcome of such
matters and it is presently impossible to determine the actual costs that
ultimately may be incurred, management believes that the resolution of such
uncertainties and the incurrence of such costs should not have a material
adverse effect on the Partnership's consolidated financial position,
results of operations or liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
27 Financial Data Schedule
B. REPORTS ON FORM 8-K:
None.
SIGNATURE
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,
who has signed this report on behalf of the Registrant and as the principal
financial and accounting officer of the Registrant.
SAM HOUSTON RACE PARK, LTD.
Date: July 30, 1999 By: /S/ MICHAEL J. VITEK
Michael J. Vitek
Vice President of Accounting