Big Potential, Questions for A Venue at Laurel Park

By John Wagner
Washington Post Staff Writer
Sunday, August 10, 2008

The Baltimore-Washington Parkway runs close by Laurel Park, the nearly century-old horse-racing track in Anne Arundel County, and then lopes northeast 12 miles before reaching the weathered wooden sign that welcomes travelers to Baltimore.

A site along this leafy corridor could become home to Maryland's largest slots venue if voters approve a November referendum proposal. The Anne Arundel location, which would receive nearly one-third of the 15,000 machines, is considered the biggest prize of the five potential sites -- and it is generating some of the biggest questions.

Although the track remains the leading option for slots in Anne Arundel, a string of financial losses reported by its Canadian owner, Magna Entertainment, has fueled speculation about whether a yet-to-be-appointed state commission might look favorably at alternatives.

Other potential locations along the parkway that have been floated include a shuttered polka parlor, land around the sprawling Arundel Mills shopping center and the hotel district of Baltimore-Washington International Marshall Airport.

"There's no guarantee for any of the sites to go to any individual," said House Speaker Michael E. Busch (D-Anne Arundel), who would appoint two of the seven members of the site-selection commission.

Even if voters statewide endorsed slots, there is also no guarantee that Anne Arundel leaders would permit their arrival. A provision approved by the legislature last year made clear that slots venues would be subject to local zoning decisions.

Whether Anne Arundel officials will make the change to allow 4,750 machines at any location remains an open question -- and it is an important one. Given the number of machines envisioned, hang-ups in Anne Arundel could severely undercut the more than $600 million in annual revenue that legislative analysts say slots could yield for education and other state programs.

The prospect of slots has split the seven-member Anne Arundel County Council, with several members now saying they want to see the referendum results first. County Executive John R. Leopold (R), who voted consistently against expanded gambling as a state delegate, has been noncommittal.

In an interview last week, Leopold said he will look closely at the referendum results, examining support in his county, particularly among residents near potential slots venues. Several residential areas are near the track, whose main entrance is off Route 198, amid a stretch of stores and restaurants.

"If the question is asked: 'Would you like slots within two miles of your house?' the outcome might well be different," Leopold said.

The plan being put to voters earmarks up to another $100 million a year from slots proceeds -- at track and non-track locations alike -- to enhance racing purses and help horse breeders, steps many in racing say are necessary to ensure its survival in Maryland. Leopold said such subsidies amount to "an ill-advised bailout of an obsolete industry to which few voters have any connection."

Under a plan hammered out last year by Gov. Martin O'Malley (D) and lawmakers, all five slots locations would, at least in theory, be subject to competitive bidding, with the state commission picking winners. Other sites would be located in Allegany, Cecil and Worcester counties and Baltimore. Some locations appear more likely to invite competition than others.

The plan, for example, requires the Worcester location to be within a mile of an intersection where the Ocean Downs Racetrack is located. The Anne Arundel site, by contrast, must be located within two miles of Route 295, the Baltimore-Washington Parkway.

Lobbyists for the Maryland Jockey Club, which operates Laurel Park, calculated that the eligible area encompasses more than 50 square miles. In the fall, they tried, with little success, to get lawmakers to narrow the zone.

Representatives of the Jockey Club, which is owned by Magna, declined to comment for this article.

Many in the racing industry argue that Laurel Park is an obvious site for slots.

Efforts elsewhere to blend horse racing and slot-machine gambling have had mixed results, in part because there is typically limited overlap between patrons of the two activities. But John B. Franzone, chairman of the Maryland Racing Commission, said the model can work at Laurel, particularly given plans to expand retail and other entertainment options at the site.

"For racing, I think it's imperative that the location in Anne Arundel be at a racetrack," Franzone said, adding that interest in the sport could be bolstered by the foot traffic that slots would bring.

On Friday, as live racing resumed after an eight-week hiatus and the 3:30 p.m. post time arrived, the large glass-enclosed grandstand at Laurel was nearly empty. But a few hundred patrons milled outside along the home stretch, with many perched on benches and drinking beer as wagering continued for the next few hours. Blue-collar workers blended with those in business attire, including a woman taking part in a conference call by cellphone.

Gordon Kerr, a longtime driver of horse vans, said it was the largest crowd he had seen at Laurel Park in some time for a regular racing day. Kerr said he is convinced that slots would transform the facility, as they have at tracks he has seen in nearby states.

"You'd have a better atmosphere, a better crowd, more money flowing," Kerr said.

Magna's financial uncertainties are one reason some in Maryland are hedging their bets about whether the company should get a slots license.

Last week, Magna, which manages or operates nearly a dozen tracks, including three with casinos, reported a net second-quarter loss of nearly $21.3 million, which it said in a news release was an improvement from a $23.4 million loss during the same period last year. Magna said it was disappointed in a $4.4 million drop-off in revenue in its Maryland operations, which include Laurel Park and Pimlico in Baltimore, home to the Preakness Stakes. The company has been looking for properties to sell to improve its short-term finances.

Also last week, the Maryland Jockey Club announced it was closing operations at Pimlico for the fall and trimming the number of live racing days at Laurel.

Franzone said it is possible that Magna could partner with a more established gaming company to bid for a slots license at Laurel Park, a move that might assuage fears about the Canadian company's finances.

Franzone is among those who said he has heard talk about possible alternatives in Anne Arundel. Although no potential bidders have stepped forward publicly, several pro-slots lobbyists and county officials pointed to Blob's Park, a shuttered polka parlor and beer garden, as an example of another possible site.

The cavernous facility, which closed late last year after 74 years in business, sits just off the intersection of the Baltimore-Washington Parkway and Route 175 in Jessup. It is not visible from the main roads and has a sizable parking lot.

Some activists and politicians in Anne Arundel are vowing to fight slots at any location, arguing that expanded gambling is not compatible with its emerging technology sector and growth that will be fueled by the military's base realignment process.

Anne Arundel officials have determined that their zoning laws will require an affirmative council vote to allow slots at Laurel Park or any other location. That has emboldened Anne Arundel Council member Jamie Benoit (D-Odenton), whose district includes Laurel Park, for what could be a second fight if the referendum proposal passes statewide.

"I kind of have higher hopes for Anne Arundel County than the place that the buses stop for slots," Benoit said.