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citizens action group called “Stop Slots at Arundel Mills,” however, is now fighting the zoning permit, which could be repealed by a countywide vote in November.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. 

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