Three months after the state’s first racetrack with video lottery terminals opened at Scioto Downs in Columbus, the Ohio harness racing industry is showing signs of resurgence.

Attendance at harness racing events is up, racing fans are betting more and the number of mares bred in Ohio is expected to rise.

“We’ve all been waiting for so many years for slots to save racing in Ohio,” said Vickie McNabb, director of the Lebanon Raceway track for the Ohio Harness Horsemen’s Association. “We know all of our struggles are going to turn and racing in Ohio will be good again.”

Ohio horse racing was once a $900 million agricultural-based industry that supported 25,000 jobs directly and involved more than 250,000 people in Ohio, according to estimates from the American Horse Council.

Jerry Knappenberger, general manager of the Ohio Harness Horsemen’s Association, said the number of industry jobs has fallen to 15,000 during the past 10 years.

Ohio’s racing industry began slipping after Pennsylvania and Indiana approved video lottery gaming at racetracks in 2006. Those states used video lottery revenue to increase racing purse money — payouts to the owners of winning horses — and to increase the number of horses bred in each state.

Now, there are early signs the industry is regaining momentum here, including an increase in the number of mares bred in Ohio, Knappenberger said.

Ohio ranked first in the country in 2003 with over 2,591 standardbred mares bred in the state. Ohio’s ranking fell to sixth by 2010, with 687 mares bred. The anticipation of racing prizes fattened with video lottery terminal (VLT) revenue drove that figure back up slightly to 693 last year, and Knappenberger expects it to grow again in 2012.

“The more Ohio horses we have, the more need for Ohio agricultural products,” he said.“The Ohio Harness Horsemen’s Association and its members, working with the racetracks, want to rebuild the Ohio standard-bred industry to the promise it once held.”

According to the Ohio Harness Horsemen’s Association, other states with expanded gaming have seen increases in: Horse training and breeding operations; investment in farming, barns and livestock; and, the need for additional veterinary services because of increases in foal production.

Jack Kieninger, president of the Indiana Standardbred Association, said the state’s breeding numbers have dropped off this year, as Ohio’s have ramped up. Overall, though, he views Ohio’s entry into the racino world as a positive.

“We’re flooded with Indiana-bred horses and a majority have out-of state owners, not just Ohio but Michigan, Illinois and Kentucky,” said Kieninger, adding it’s a challenge to find races for all of them. “Ohio getting a racino is going to take some pressure off of us.”

The Ohio Lottery Commission is reviewing five additional applications from racetrack owners to become VLT sales agents, including one from Penn National Gaming Inc. for the proposed Hollywood Slots at Dayton Raceway and another for Lebanon Raceway from the Miami Valley Gaming and Racing LLC., a joint venture of Delaware North Companies Gaming and Entertainment and Churchill Downs Inc.

The application review process takes up to six months.

Robert Schmitz, chairman of the Ohio State Racing Commission, cautions that with just one racino operating it’s too early to predict the full impact of VLTs on the industry.

Still, Schmitz said, “Absolutely, I’m encouraged. There are more people at the racetracks and people are betting more. Ohio sired racing stock will increase.”

Net revenue from video lottery gaming hit $11.8 million in July at Scioto, with 9 percent set in escrow to benefit breeding and racing in the state, including upping purses at the racino. Purses have risen twice there since it opened in June, growing from a range of $2,000 to $4,000 per race in 2011 and to $4,000 to $15,000 this year. Betting on live races also is up about 35 percent over last year, said Stacy Cahill, general manager at Scioto Downs.

“People who have never seen a race are going down to the track to see what’s going on,” she said.

Local horse owners say they’re excited about the bigger purses, but fear the industry is changing too rapidly. Scioto Downs already has raised the minimum value for horses racing there from $3,000 to $5,000. The cheaper horses can still race, but they face more expensive competition.

The quick change could knock some small-time owners out of the competition.

“If owners don’t improve the quality of horses they are training, they’re not going to be competitive in Ohio,” Cahill said.

Eighteen horsemen concerned about the change at Scioto met with Knappenberger at Lebanon Raceway last week.

Tom Gray, a Dayton race horse owner, said they are asking for time to improve their stock.

“These are mom-and-pop owners who kept the Ohio horse racing industry alive during the lean years,” Gray said.

With racinos proposed for Dayton and Lebanon Raceway, the horseman said they are concerned about racing preferences that will be negotiated with each track that determine which horses make it to the starting gate.

“We know with the bigger purses, we need to put out a better product,” McNabb said. “We need to upgrade our horses. We just need time. Based on what happened at Sciotio, we’re trying to protect our local horse owners so they have an opportunity to race for the better purses.”

Knappenberger said the association will work to establish preferences for Ohio horseman who have remained loyal during difficult times so they can continue racing for the expanding purses.