Legislation Pleases Slot Backers, but Wait for Referendum Is Concern
Tuesday, November 20, 2007
Although slot machine legislation that would benefit horse racing and breeding in Maryland was narrowly passed early yesterday morning, members of those industries don't believe the state legislature did them any favors by sending the final decision on legalization to voters in a referendum.
The prospect of waiting until the November 2008 general election to determine the fate of Gov. Martin O'Malley's plan to allow 15,000 slot machines at five locations throughout the state has filled track management, horsemen and breeders with a sense of foreboding.
"I don't know why [the legislature] couldn't have just said yes, and we could have started construction immediately," said Lori Testerman, a trainer based at Pimlico. "Everybody is extremely grateful it passed, but by the same token, we have to wait another year, and in that year our opponents will be building forces against the vote. We're still not out of the woods, and everybody worked so hard to open their eyes and say, 'Don't let this industry die.' "
The once dominant racing and breeding programs in the mid-Atlantic have become anemic as Delaware, West Virginia and Pennsylvania revived their racing fortunes with the infusion of revenue from legalized slot machines. For years, Maryland racing interests pleaded with legislators for help, and the vote for a referendum during the special session in Annapolis, to many, did not seem like enough.
"After 13 years, we're glad the slots legislation passed," said Richard Hoffberger, president of the Maryland Thoroughbred Horsemen's Association. "We certainly would have been happier had we been on a level playing field a lot sooner and didn't have to go to a referendum. But this is a huge step forward. Is it all the steps? No."
If the referendum passes next year, Maryland would receive its best and likely last chance to regain its place among the leading racing jurisdictions in the country. The legislation calls for up to $100 million of slots revenue to be allocated annually toward racing purses and breeder rewards, with 80 percent slated for thoroughbred interests and 20 percent to standardbred.
Magna Entertainment, which owns Laurel Park and Pimlico, would be required to submit plans to the state racing commission to spend $1.5 million a year to improve the quality and marketing of horse racing. In the first eight years slots operate, up to $40 million would be allocated to a racetrack facility renewal account for capital improvements.
In addition, Magna would have to keep the Bowie Training Center open or turn the property over to the state for its open space preservation program. Timonium, the state fair racetrack, would receive $1 million for five years to upgrade its facilities. Backstretch improvements for workers who live at the tracks are also written into the legislation.
Any benefits for the tracks from slots are contingent on the Preakness remaining in Maryland.
"It's the first time I can say I'm truly optimistic about the future of Maryland racing and the prospects of keeping the Preakness here," said Lou Raffetto, president of Laurel Park and Pimlico. "The polls show 60 percent [of Maryland residents] in favor of [slots], and when combined with a property tax cut and fighting for education and health, the numbers go up closer to 70 percent."
Raffetto said it was too early to discuss how racing will lobby public support for slots, but it likely will unify groups across the industry.
"I've never been involved with a referendum, but I'm sure it's going to be challenging to get our message across," said Cricket Goodall, executive director of the Maryland Horse Breeders' Association. "We have to make a plan that involves a public relations campaign to let people know there is more to horse racing than the racetracks. We have to let people know . . . the land is vulnerable without an agricultural industry that is viable. You've got to be able to make money."
The referendum calls for 220 days of live thoroughbred racing a year, 40 of them at Pimlico. Laurel Park is considered a prime site for slot machines, but Pimlico is not.
Ocean Downs, a harness track in Worcester County, is the only other track besides Laurel considered likely to get slots despite opposition from legislators and business interests from the Eastern Shore. Ocean Downs is owned by developer William Rickman Jr., who also operates Delaware Park. Rickman, who could not be reached for comment, also has a license to develop a new track in Allegany County.