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Ehrlich Warns Loss of Slots Might Cost Md. the Preakness

By Matthew Mosk
Washington Post Staff Writer
Friday, April 22, 2005; Page B01

Maryland could lose its 130-year grip on the Preakness Stakes because of the state legislature's persistent refusal to legalize slot machine gambling, Gov. Robert L. Ehrlich Jr. said yesterday.

"The failure to pass slots means, clearly, the future of the Preakness in Maryland is an open issue," Ehrlich (R) told reporters before headlining a dinner for the Maryland Horse Breeders Association. "The state does not own that race."

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In a month, Pimlico Race Course in Baltimore is scheduled to host the 130th running of the storied horse race, the second leg of racing's Triple Crown and the most profitable annual sporting event in Maryland.

Officials at Magna Entertainment Corp., the Canada-based owner of Pimlico, did not return calls late yesterday. But the track's minority owner, Joseph De Francis, said he was not surprised by Ehrlich's warning. "It is encouraging to know that he recognizes the value and importance of the Preakness to the state of Maryland," De Francis said.

Ehrlich said he plans to use next month's race to draw attention to his three-year battle with lawmakers to bring slot machines to Maryland.

The General Assembly adjourned April 11 without a deal to expand gambling, and Ehrlich has said his bid for slots in all likelihood will go dark until after the elections next year.

The governor told a group of students at Towson University yesterday that he believes that the fate of more than a single horse race is at stake in the slots debate.

Proceeds from legal machines in Delaware, West Virginia, and soon, Pennsylvania are fattening racing purses at tracks in those states. That has started an exodus of breeding operations and horse farms across the state borders, he said.

The trend eventually could imperil the state's long relationship with horse racing, he said. The sport's presence in Maryland dates to 1724, when the nation's first municipally sponsored race took place in Annapolis.

Before yesterday, Ehrlich had never spoken with such foreboding about the fate of the Preakness. The event drew a crowd last year of 112,668 -- enough people to offset losses from the rest of the racing season at Pimlico, where a typical day of races lures fewer than 5,000 fans.

Maryland lawmakers and other top officials have said they will go to great lengths to protect the state's hold on the race, which they say generates more one-day economic benefits than the Super Bowl.

Lawmakers already have put in place barriers to prevent Magna from moving the Preakness to one of the 10 other North American tracks it owns.

If the race is moved from Maryland, the state would be entitled to increase its share of parimutuel wagering revenues from 0.5 percent to 4.07 percent. And if Magna was to attempt to sell title to the Preakness, the state has the right to step in and match the price.

Magna also could be subject to sizeble administrative penalties from the racing commission, according to state regulations.

Magna has been struggling financially. The company, which owns 11 racetracks in North America and one in Austria, reported losses of $95 million last year, bringing its deficit to $215 million since 2002. The company's long-term debt is $241 million.

Magna officials have denied in published reports that the company is contemplating the sale of Pimlico and nearby Laurel Park.

But at least two suitors have approached Magna with an interest in buying the tracks in recent weeks, including Baltimore Orioles owner Peter G. Angelos, a racing industry source said yesterday.

Magna did not respond to calls for comment.

The company's executive vice president of racing in Maryland, James L. Gagliano, told the Baltimore Sun in an article published yesterday, "We're disappointed with the legislature, and it will be difficult to confront our competition without electronic gaming, but we're not for sale."

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