Many of Maryland’s politicial leaders, from Gov. Martin O’Malley to members of the state legislature, will be in attendance at Pimlico on Saturday, and they undoubtedly will be taking credit for actions that “saved” the Preakness Stakes and thoroughbred racing in the state.
When track owners wanted to cut the 2011 racing schedule to the bone, triggering a bitter fight with horsemen, O’Malley brokered a deal that subsidizes the industry this year. The governor said it would “keep Maryland’s historic Preakness Stakes where it belongs.” The legislature last month extended the subsidy for two more years while telling the industry it had to devise a business plan to become self-sufficient.
Perhaps this is possible. Unfortunately, the Maryland tracks’ dysfunctional owners and its short-sighted horsemen have little chance of agreeing on anything.
Hurt by competition from nearby tracks with slot machines, the quality of racing in Maryland has plummeted, fans have disappeared and betting has declined. (Pimlico this spring introduced the 50-cent Pick Five wager that has been popular around the country. The size of Saturday’s betting pool: a pitiful $3,860.)
The Maryland Jockey Club, which operates Pimlico and Laurel Park, fought for years to get slot machines but failed to obtain them when owner Frank Stronach’s management made a disastrous mistake in the bidding process. Without slots, the tracks’ prospects seem almost hopelesss. Laurel has been losing millions of dollars a year and Pimlico is viable only because of the Preakness.
Stronach had sold a 49 percent interest in the tracks to Penn National Gaming Inc. — a company that is primarily interested in slot machines and does not share Stronach’s willingness to lose money on racetrack investments. “From the tracks’ perspective,” said Tom Chuckas, president of the Maryland Jockey Club,” the only way to get to profitability requires consolidation.” Thus did the MJC propose cutting the state’s racing schedule from 146 to 47 dates, consolidating most of the racing schedule around a short meeting at Pimlico. When horsemen opposed the plan vehemently, the tracks appeared on the verge of shutting down until O’Malley brokered a solution.
Under the terms of Maryland’s slot-machine legislation, a percentage of all slot revenue in the state is earmarked for the racing industry — some for purse money, some for capital improvements at the tracks. The O’Malley deal diverted the capital-improvement money — up to $6 million a year — to the operating expenses for the Maryland Jockey Club so that it could afford to continue conducting 146 days of racing during the year.
Because of the Preakness’s importance to the state, subsidizing the spring Pimlico meeting serves a public interest. But Maryland taxpayers might reasonably ask why the state should spend millions of dollars so that its racetracks can offer 146 days of racing to which most fans are indifferent. The beneficiaries are the state’s horsemen, who cry that cutting the racing schedule would cause economic havoc, but they have plenty of options to run for ample purses in West Virginia, Delaware, Virginia, Pennsylvania and New Jersey.
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