Day-to-Day In Maryland - By Eric Mitchell

(Originally published in the May 22, 2010 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)

The Maryland Jockey Club changed owners April 30 but the shift was from Magna’s right hand to its left. A reorganization through bankruptcy turned Pimlico Race Course and Laurel Park over to Magna International Developments, the parent company of Magna Entertainment Corp.

Can a company once mired in debt and known for its revolving door in the executive suite since it was created in 1999 provide substantive change in the troubled Maryland racing market? The answer is at best a hopeful maybe.

“The stability right now is that the bankruptcy scenario has been resolved, and they talk about profitability,” said Alan Foreman, chief executive officer of the national Thoroughbred Horsemen’s Association and counsel for the Maryland THA.

What currently stands in the way of Thoroughbred racing’s growth in Maryland is a dispute over ownership of a video lottery terminal operating license in Anne Arundel County. The Cordish Company was awarded a license for 4,750 machines in Anne Arundel County by the state and got zoning approval for a 200,000-square-foot facility near its Arundel Mills retail and entertainment development. The Maryland Jockey Club and a citizens action group called “Stop Slots at Arundel Mills,” however, is now fighting the zoning permit, which could be repealed by a countywide vote in November. Whether that referendum even occurs is also uncertain because the validity of the signatures needed to put the issue on the ballot is being challenged.

That’s not all. Keeping the water muddied is a May 7 announcement that the MJC could be run by a partnership between MI Developments and Penn National Gaming Inc., a Pennsylvania-based company operating 19 gaming facilities and racinos in 14 states. The fear surrounding this agreement, which still requires approval by the Maryland Racing Commission, is that priorities will shift toward gaming and away from racing.

“Everyone is leaping to conclusions with the Penn National deal,” Foreman said. “No one has seen the details of the deal. But there is concern that Penn didn’t make this deal to get into Maryland racing. They are looking where racing is a means to an end for gaming.”

Martin Lieberman, executive director for the MidAtlantic Cooperative, said he believes the partnership could be positive for Maryland. The MidAtlantic Cooperative negotiates simulcast agreements for 17 Thoroughbred and harness tracks and their betting outlets in nine states. PNGI is a charter member of the cooperative.

“I’m encouraged because Penn National is involved in racing,” he said. “I look at their history and what they are doing. They know the terrain and know the area.”

Joe Weinberg with Cordish said scuttling the Arundel Mills project in order to put VLTs at Laurel will delay the implementation of gaming for up to 10 years and cost the industry millions of dollars. The MJC, after all, had a shot at the VLT license for Laurel Park but didn’t follow state rules and submit a $27.5-million payment with its license application.

“The real question is—will the horse industry choose to forego $60 million per year ($600 million during the first 10 years) from its percentage of revenues from Arundel Mills and blindly support the same old regime at the tracks?” Weinberg said in an e-mail. “Or will the industry finally wake up to the reality that the interests of the track owners are diametrically opposed to that of the industry as a whole.”

When the partnership deal was announced, PNGI chief executive officer Peter Carlino stressed the improvement of racing: “We look forward to working with MI Developments…as well as collaborating with the local horsemen and community members and leaders in Baltimore and Laurel to support their efforts to continue delivering a high-quality racing experience at these two historic racing venues.”

The biggest risk for Maryland racing is that it wanders down the same bramble-choked road as New York, getting any hope of financial relief hopelessly snagged on thorny lawsuits and in-fighting. In the meantime, Marylanders can only do what they have learned to do best—wait, cope, and survive.

“In Maryland racing, people have always lived from day to day,” Foreman said. “It is a very resilient group. It is remarkable we have maintained an industry here considering the circumstances.”

Remarkable indeed, but Maryland racing is clearly running drastically low on hope and time. 

11 Comments

Leave a Comment:

Dave

Its time to close down maryland racing for a while and startover with someone else. All there doing by bringing in penn national gaming is adding another crook to the mix. Shut racing down get rid of the idiots that are there and lets start over already.

18 May 2010 5:13 PM
Robin from Maryland

Being a Maryland resident and life long racing buff, it upsets me to no end the state of racing here, in what used to be one of the greatest areas of breeding and racing.  Many of the old farms are gone - the cost too high to maintain business with the small fields and low purse money.  Ask any Old-timer and they will say the same.  Sure, our wonderful (Ha) governor has assured us that the Preakness is here to stay - What a joke!!!  I feel that most residents really don't care about the state of horse racing.  Will slots help - maybe, but unless the entire state gets behind horse racing here,I have no doubt that little by little what's left of our racing season will vanish.  I suggest that we put politics aside and strive to bring Maryland back to it's once glorious era of horse breeding and racing.  Until we do this, the Preakness is on it's last breath.

18 May 2010 9:50 PM
Steve Zorn

The chance for serious change was lost when the bankruptcy court went along with Stronach's sleight-of-hand and left the tracks in his control, rather than auctioning them, as Stronach had originally promised.More of the same, even with Penn National involved, is unlikely to reverse the trend.

18 May 2010 10:07 PM
Christian

Maryland requires that an owner of a slots license not have an ownership interest in another slots license. Any ownership interest Penn National has in MID/MJC would be a significant hurdle in the path of Laurel gaining a slots license. Of course we do not know anything about the Penn National agreement. As with Magna, communication is a skill MID seems to lack. Unfortunately with or without slots, under MID, MJC is likely to have much of its land sold or developed and racing days reduced to a two month meet.

19 May 2010 10:15 AM
Bill Fossett

If it wasn't for Speaker of the House, Michael Bush, we would have had slots a long time ago here in Maryland.  These politicians, who think they know best, can be dangerous.  He has been at the public trough way too long and should be put out to pasture where he can do no more damage.

19 May 2010 4:05 PM
Bill Daly

As a longtime Maryland resident and horseplayer it also saddens me to see the sorry state racing finds itself in here.  I'm afraid that the track owners and politicians have dithered too long and time has passed the Free State by. I usually go to Delaware Park, Charles Town or Penn National at York OTB.  The facilities at all of those places are better for a simulcast bettor than at the Maryland tracks.  The slot machine debate has really already been settled as all of the surrounding states - except for Virginia - have had their racinos up and running for sometime now. Even if the state ever finally decides who will get the slots franchises it's really unclear how much of a help this will be to improve racing in Maryland. There is already too much racing in the mid-Atlantic area.  There are only so many horses available to race and the breeding industry has taken quite a hit with the financial meltdown. I would love to be more optimistic, but I just cannot a way out of the mess Maryland racing finds itself in, sorry to say.

19 May 2010 4:24 PM
former employee

The problem with Maryland racing is that management is easily offended and gets very defensive when presented facts. Say something cross about one of their cronies and you will be terminated - ESPECIALLY IF YOU ARE TELLING THE TRUTH!

20 May 2010 10:20 AM
Jeanne from Maryland

MI Developments should be given a chance to improve racing in Maryland.  After all, of all the tracks around MD that have slots, none of them have put much money into improving the track surfaces, whereas Magna Entertainment spent over $20 million completely rebuilding the dirt and turf courses at Laurel Park.  With Penn National joining in, Laurel Park could become the premier racing and slots facility in the Mid-Atlantic region.

I have no faith in MD politicians to help MD racing. MD doesn't deserve to become like NY where the slots mess has dragged on for nine years. I will do my best not  to let that happen in MD. I am voting against many incumbents in MD upcoming elections.

20 May 2010 12:45 PM
Cris

Maryland has been on the ropes before. No one person has done more to destroy racing in Maryland than Mike Bush. I cannot wait for the man to be drummed out of office. He is an awful person who has diverted the will of the people for his own interests. Any delay he caused has resulted in the crooks at the door we have today.

20 May 2010 10:12 PM
MD Breeder

I was a Maryland breeder and farm owner for 20 years.  Had to go to Florida, as the racing industry and how it treated its breeders and owners became untenable financially at a minimum and flat insulting.  Look at how many stallions are left im MD and mares bred.  It's a skeleton group of die hard hobbyists left to breed in MD.  Treat us breeders like crap, and we'll get down the road just like every other nickel slot granny with a pocketful of change looking for a cheap buffet (read Charles Town and Delaware).  So long Maryland and good riddance.  New Maryland has become the old West Virginia and vice versa complete with the jokes and wisecracks.  All Maryland needs now is a bunch of numbered I-95 exit signs, spewing smokestacks and love canals ala the New Jersey turnpike in order to complete its transformation from idyllic horse country to Midatlantic armpit.  Keep it up politicians.  

This is political science case study 101 of how to ruin a state and industry.  Maybe we could trade Maryland to Mexico, but it's unlikely.  Mexico is corrupt, but Maryland is criminal.  Maryland has lost me and my tens of thousands of horse breeding dollars invested yearly. I'm happy to give it to Florida.

22 May 2010 8:59 AM
Tom Baldwin

At this year's Preakness, I watched with great concern as Gov. O'Malley proclaimed that the State of Maryland had reached agreement with MID for the Preakness "...to remain in Maryland for the forseeable future...".  What we failed to hear was what the future holds for Maryland racing the other weeks we currently run.  Make no mistake, if MID and/or Penn National do not get slots at Laurel, they will fold rest of the racing schedule faster than a cheap tent and we'll see a two week meet at Pimlico which will culiminate with the Preakness.

Let history be our guide on Penn National.  In 2007, Penn National entered into a binding letter of agreement to purchase Rosecroft Raceway in Ft. Washington, MD.  Rosecroft ran 88 days of live racing a year. From an Aug 2007 Washington Post article - "This (Rosecroft) is a natural fit for us," said Eric Schippers, vice president of public affairs for Penn National. "Maryland is in our back yard." Schippers said the company planned to sign a definitive agreement within the next 30 days. He said the deal to buy Rosecroft was not contingent on Maryland legalizing slots.

It didn't take long for Penn National to walk away from the deal once there was no hope of slots being installed at Rosecroft.  Today, Rosecroft is closed and there is no racing there.  

23 May 2010 3:29 PM

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