Maryland horse racing industry needs to use slot money wisely — or risks losing it
By Andrew Beyer,
Thoroughbred racing in Maryland has deteriorated so badly over so many years that most bettors pay little or no attention to it. Even players who live in the vicinity of Laurel Park or Pimlico are apt to prefer wagering on out-of-state tracks; the local product may not be on their radar screens.
Since Laurel began its fall season on Sept. 5, people who do watch its races have surely noticed a significant development: The product has improved substantially. The fields have generally been large and competitive, with an average of nine horses per race, a sharp increase over last year. They aren’t filled with rock-bottom types who are at Laurel because they can’t win at Charles Town. Good stables are shipping horses into Maryland for selected races.
The reason for the change is the long-awaited infusion of revenue from slot machines into purse money. Since the Maryland Live! Casino has gone into full-scale action, with its 4,750 slots at Arundel Mills, purses at Laurel have shot up from $185,000 per day last year to $245,000 at the current meeting. As more casinos operate in the state — one in Baltimore is scheduled to open in 2014 — the purses will be even more robust.
When people in the industry gather at Laurel on Saturday for the 27th Maryland Million, the event that showcases offspring of the state’s stallions, they will be talking hopefully about the future for the first time since the thoroughbred business virtually collapsed.
Country Life Farm in Bel Air used to be home to as many as eight stallions, including Maryland’s six-time leading sire, Allen’s Prospect. As the sport suffered, the farm’s stallion population dropped to zero. But now Mike and Josh Pons are seeing clients again interested in buying Maryland horses and racing them in the state. Last week the brothers signed the papers to acquire a new stallion for their farm. If the purses at Laurel and Pimlico remain healthy, Mike Pons said, “We can get well again.”
While it is heartening to hear such sentiments, any optimism should be cautious, considering the history of dysfunction in the Maryland racing industry. The sport is not necessarily headed to a prosperous new era, but it is definitely coming to a make-or-break juncture.
As everybody in the industry knows, the sport’s precipitous decline began when neighboring states legalized slots, channeling some revenue from them to horse racing, while Annapolis waited for years to approve the machines. The lucrative purses elsewhere, especially Pennsylvania, lured racehorses and breeding stock from Maryland, where the sport descended into minor league status.
The grandstands at Laurel and Pimlico have been virtually empty, and the Maryland Jockey Club has lost millions of dollars, $20 million in 2010 alone. The MJC can’t afford to maintain two racing facilities plus the training center at Bowie and to conduct long schedules of live racing in front of those empty seats. But when it has sought to pare down its operations and racing calendar, it encountered bitter opposition from horsemen, with whom its relations have been acrimonious for years.
Gov. Martin O’Malley brokered a deal in 2011 that kept the tracks afloat for the short term. The state diverted slot money earmarked for capital improvements and allowed the MJC to use those funds for day-to-day operations. The horsemen also subsidized the tracks in exchange for its agreement to conduct 146 days of racing during the year. This was just a temporary fix, and political leaders in Annapolis demanded that the MJC and the horsemen formulate a business plan to make the sport self-sustaining. The negotiations — involving management, horsemen and members of the state racing commission — have gone on for months, and still there is no plan.
Yet MJC President Tom Chuckas said last week: “I’m more optimistic than I have been for a long time.”
Everybody can see at Laurel this fall the enormous impact of slot revenue and its potential to reshape the Maryland horse industry. But everybody in the business also recognizes the threat that could spoil this dream. In several other states with slot subsidies, politicians are trying to claw back the money allotted to horse racing, asking why they should prop up a dying sport when those dollars could be directed to education or social services. Such sentiments have been heard, too, in Annapolis, where even legislators friendly to racing have been exasperated by the industry’s endless internal bickering. If the industry fails to come up with a credible plan for the future, politicians could yank back the subsidies.
Any plan has to address some intractable problems. Slot money is earmarked for purses, breeder awards and capital improvements, but none of it goes to the Maryland Jockey Club’s bottom line, so it is difficult to see how the MJC can profitably operate the tracks. Horsemen always want a maximum number of racing dates, but too much racing dilutes the product; the most successful tracks in America are ones that run short seasons. This issue has been a perpetual source of conflict between the two sides, but now they have to resolve it. There is potentially too much to lose if they fail.
For previous columns by Andrew Beyer, visit washingtonpost.com/