Business & Wealth - Ranch & Coast

No Horsing Around Horse racing isn't just risky for those who bet on the horses. Investors in horse racing stocks can get trampled, too. In the last 12 months, shares in Churchill Downs (www.kentuckyderby.com) and Magna Entertainment (www.magnaent.com) - two of the largest owners of racetracks in the United States - have been under pressure, declining about 20 percent and 4 percent, respectively. But while these stocks have been down, they aren't necessarily out. While bettors are still flocking to Del Mar's track, which is not for profit and offers no public shares, investors have been racing out of Churchill, owing to its future prospects or lack thereof. Churchill plans to extend its business by broadcasting races outside the U.S., aiming its products at a younger crowd and adding slot machines at its tracks. But adding slot-machine gambling to traditional pari-mutuel wagering - thus forming "racinos" - continues to face major hurdles. "If you'd asked me five years ago about the future of racinos, I'd have said that they would soon account for 25 percent to 30 percent of Ebitda," Tom Meeker, president and chief executive of Churchill Downs, was quoted as saying to Dow Jones & Co. The potential, said Meeker, has now decreased as the regulatory roadblocks have increased. Churchill is home to the prestigious Kentucky Derby, and owns five tracks: Churchill Downs, Arlington Park, Calder Race Course, Ellis Park Race Course, and Fair Grounds Race Course - in Kentucky, Illinois, Florida, and Louisiana. Investors have been concerned about Churchill's growth, since expansion of gambling must get approval from voters and legislatures. In Kentucky, Churchill Downs has been trying for 12 years to get legislative approval for slot machines. Even so, Meeker told Dow Jones that in the next five years, Churchill Downs expects to grow by grabbing a share of the $85-billion worldwide gambling market in Asia, Europe, and Australia - not to mention the untapped China market. Because of the drop in Churchill's shares, some investors believe a buying opportunity could be emerging, especially with Meeker's plans for overseas growth. Investors have already bought into Magna Entertainment's (MEC) turnaround, sending its shares to about 6, up from 5. The company barely bypassed a potential liquidity crisis after winning approval to sell a racetrack in Pennsylvania. The $225-million sale of The Meadows racetrack, first announced in November, has finally gotten a conditional thumbs-up from the Pennsylvania State Harness Racing Commission. The sale is "expected to enable MEC to significantly reduce our outstanding debt and strengthen our balance sheet," chief financial officer Blake Tohana said in a statement. MEC has acquired, built, or won management contracts on more than a dozen pari-mutuel racetracks since it was spun off from auto parts manufacturer Magna International in 1999. MEC's racetracks and horse training facilities are located in nine U.S. states, as well as in Austria and Uruguay. The company also has phone, Internet, and interactive TV wagering operations, as well as off-track betting. All told, gambling is risky business. Fears of a crackdown on online gambling in the United States knocked over $1 billion off the value of U.K. gaming stocks after the FBI moved to shut down the U.S. operations of Bet On Sports. Executives in the $12 billion-a-year industry were also assessing their personal exposure after Bet On Sports said it had been unable to contact chief executive David Carruthers, who was being held by U.S. authorities in Texas. A U.S. indictment laid out criminal racketeering, conspiracy, and tax evasion charges against a number of individuals, including Bet On Sports founder Gary Kaplan and Carruthers, who had spearheaded a campaign to defeat a Republican-written bill to crack down on online gambling. The U.S. House of Representatives approved the legislation earlier this month. A similar bill is pending in the Senate. - Jennifer Valdez ----------------------------------------------------------------------------------------------------------------------------- LandAuction.com Real estate seems to be one area where the investments never wane. If you're in the market for new land (maybe for a second home, or just for flipping) you might find it at the LandAuction.com event at the San Diego Convention Center on August 20. Since 1990, LandAuction.com's real estate acquisition division has been purchasing land and remarketing the properties for sale to bidders. Buyers can find everything from vacant lots to rural acreage to everything in between. Head over to their Web site to see which parcels will be up for bid at the event - each property has a brief description and links where you can see maps, aerial photos, and any legal documents available for that property. "We offer the marketplace a variety of real estate options for every buyer's unique and specific requirement," says Lynn Ferguson, chief marketing officer, "be it a first time buyer or the experienced investor." Ferguson suggests, as with any purchase of this magnitude, to do thorough research before you buy. If you're satisfied with what's on the block, just throw your hand in the air and make it known to the auctioneer. (www.landauction.com) - Alicia Garcia
		San Diego Businesses Make The List The August issue of Fortune Small Business magazine features its sixth annual list of the 100 fastest growing small companies in America. Ranking is based on the percentage of a company's growth in earning, revenue, and stock performance over the past three years. Two San Diego companies made the list this year, Websense and Royale Energy. Located in Sorrento Valley, Websense (Nasdaq: WBSN) focuses its efforts towards online threats such as viruses, spyware, and phishing (stealing passwords and credit card numbers). "Websense has grown to become an influential force in the security technology industry," says Gene Hodges, CEO of Websense, Inc. "We're changing the way businesses keep their employees out of the bad neighborhoods on the Internet, where online criminals use new tactics to steal money and threaten businesses. Our secret sauce is our security research labs, where we scan more than 75 million Web sites daily for malicious threats and deliver - within minutes - protection to businesses." Royale Energy (ROYL), located in San Diego, is a natural gas producer with some 60 wells in Sacramento, Texas, and Utah. The first spot on the list belongs to LCA-Vision (LCAV) in Cincinnati, which provides Lasik surgery; business is so good they opened ten new outpatient centers last year. (www.fsb.com) - Ryan Thomas
		From Truck Beds To Tanker Treads Since 1988, Rhino Linings USA, Inc. located in Mira Mesa, has made a name for itself with its truck bed linings. Now, its special spray-on process can be found protecting the lives of the men and women of our U.S. Military. Because Rhino Linings' linings are designed to protect against high-impact, severe abrasion and chemical corrosion, the military has applied it to convoy trucks and tankers in Iraq. The special chemical compound reseals bullet holes, and helps protect lives against bomb blasts. The surprising effects of the material recently made national news. "The key thing is to prevent collateral damage and shrapnel, the number one mortality factor when a bomb goes off," says Christa Martin, Rhino Linings' marketing director. "It is our goal to engineer the toughest products on the market," says Pierre Gagnon, Rhino Linings USA's president. And they've clearly achieved that goal since the military now looks to Rhino Linings for protection of their vehicles, structures, and ultimately the lives of their personnel. "I can't think of a better compliment than the trust of the U.S. Military," says Gagnon. "You really feel like you are part of something special when you are saving lives." (888/744-6604, www.rhinolinings.com) - Nickolas Cook