Without slot machine revenue, Maryland horse breeders are losing out

Horse breeder Bill Boniface of Bonita Farm in Darlington, Md., sees his business on the decline as surrounding states offer slots at racetracks. Boniface has diversified his business, making hay, growing Christmas trees and establishing a vineyard, all in hopes of staying in the horse business.
By Ian Shapira
Washington Post Staff Writer
Saturday, May 15, 2010

CHESAPEAKE CITY, MD. -- Here at Northview Stallion Station's padded breeding shed, the farm's top sire, Not For Love, once serviced about 100 mares a year. Nowadays, there's only enough business for the aging stud to handle about 60 a year.

Desperate to revive their fading fortunes, the farm's owners last year opened a second breeding center in rival Pennsylvania, a state where a churning river of slot machine revenue buoys the local horse economy.

"If we can get slots up and running in Maryland, we'll be able to attract new, young stallions," said Northview co-owner and veterinarian Tom Bowman, watching as a broodmare clad in booties mated with his 20-year-old stallion. "But right now . . . we are struggling to stay alive because people think: 'Where's the action? It's not in Maryland. It's in Pennsylvania.' "

Today's running of the Preakness Stakes in Baltimore serves as an annual reminder of Maryland's historically lofty perch in the equine hierarchy. But behind the nationally televised Triple Crown race, Maryland's horse industry is collapsing. Local breeders, frustrated by the unmet promise that slot machines would rescue their industry, are taking their business to slots-rich states such as Pennsylvania, West Virginia and Delaware.

In the past decade, Maryland governors of both major parties touted slot machines as the answer to the state's dwindling horse fortunes. After years of political combat, voters in 2008 approved a plan to build slots parlors at five locations, with the expectation of raising $100 million a year for fatter racing purses and $660 million a year for education.

But the slots casinos have not arrived. The two biggest facilities -- one slated for Baltimore's Inner Harbor, the other at the Arundel Mills mall -- are mired in financial, political or legal problems. A third slots casino proposed for the Rocky Gap Lodge & Golf Resort in Western Maryland has drawn no developer. A fourth parlor was to begin operating Memorial Day weekend at Ocean Downs Racetrack on the Eastern Shore, but problems with asbestos have delayed the opening until at least late fall. A 1,500-machine casino in rural Cecil County is also expected to open by year's end.

Many Maryland breeders confess to having been unrealistically optimistic when then-Gov. Robert L. Ehrlich Jr. (R) first pushed slots starting in his 2002 campaign.

Bowman thought casinos would be up in about three years. "I was really excited, but a close friend told me, 'It'll take six years,' " said Bowman, who is also president of the Maryland Horse Breeders Association. "I laughed and said, 'You gotta be kidding me.' Right now, we just feel handcuffed."

As the road to slots grew foggy, popular interest in Maryland horse racing shriveled, according to the most recent state data. Between 2006 and 2008, attendance at the state's five major race tracks dropped from 1.8 million to 1.5 million, and the number of race days declined from 338 to 255. Track and off-site wagering plummeted from about $633 million to $380 million.

By contrast, Pennsylvania's decision to approve slots has been a powerful shot in the rump: Betting on the state's live racing jumped from about $577 million in 2006 to $727 million in 2008. Between 1998 and 2008, the number of foals born in Pennsylvania soared by more than 50 percent, to 1,388, while Maryland births dropped by about 38 percent, to 693, according to The Jockey Club, the breed registry for North American thoroughbreds.

"For Sale" signs, depleted staffs and vacant stalls have become as emblematic of Maryland horse country as three-rail wooden fences and street names such as Dressage Court. Some farms now push hay as a sales crop, and Harford County's Bonita Farm -- which once offered 1983 Preakness winner Deputed Testamony as a stallion -- is growing Christmas firs and wine grapes. "Our idea is to bottle the wine and have our own label," said J. William "Bill" Boniface, Bonita's general manager.

Some farm owners can no longer wait for slots. Hal Clagett III, a Prince George's County lawyer and horse owner, has been trying to offload his father's 138-acre breeding farm in Anne Arundel County since the elder Clagett died in February. The farm has 20 horses and is deeply in debt. "If nobody had slots machines, then we'd be equal to everyone else," said Clagett, whose father was an icon in Maryland's horse industry.

Some Marylanders can't resist chasing fatter purses in slot machine states, practically defecting to enemy territory: They ship their mares to Pennsylvania, breed them there, and foal and race the offspring there to compete for the enlarged purses and bonuses doled out to owners of Pennsylvania-bred horses.

These bonuses -- drawn from a state's "breeders fund" -- are awarded to owners of a winning horse and to owners of that horse's sire and mare. The bonuses, which entice horse owners to race more often in a state, become part of a cycle of success. The stepped-up competition leads to better attendance, which means more wagering, which supports bigger purses. And bigger purses mean more horses. Maryland lags here, too: Its breeders fund has about $4 million, compared with Pennsylvania's $20 million.

"We'd prefer racing in Maryland, but the pots are less, and it costs you so much to keep those horses and feed them," said Wayne Morris, a Maryland horse farm owner who in the past year sent five of his mares to Northview's breeding center in Pennsylvania. "We want to stay in the business, but you can't stay in the business if you're drowning in red ink. Most of the farms are having sizable losses, but breeding in Pennsylvania will give us additional income."

Although Bowman has some qualms about state-sponsored gambling, he supports slots in the hope that they might allow at least one of his children to succeed him as Northview's veterinarian after he retires.

"My son wants to come back to Maryland and assume what I'm doing," said Bowman, 68. "I'm a pretty devout Christian, and I actually talked to a Bible scholar and he said nowhere in the Bible does it say games of chance are immoral. But what's difficult is when the games prey on the disadvantaged. There's some truth to that."

At the Maryland State Fairgrounds in Timonium, where thoroughbreds spent this week training for an auction, horse agents agreed that Maryland-bred horses typically fetch much lower prices than similar animals in neighboring states.

"It's easier for me to sell 'PA-breds,' " said James Crupi, an agent based in Florida. "I've got a few mares, and I wouldn't consider foaling there in Maryland. I'd bring them to Pennsylvania, New York -- or Canada."

Bill Reightler, a Maryland agent, nodded. "We're on the same page. We still have a clientele of breeders here, but they're sending their horses to Pennsylvania."

At Northview, Bowman said he had managed to maintain sizable profits until a couple of years ago. Now he can barely afford new stallions. That's why he and his partner, former clothing magnate Richard Golden, started Northview's stallion station about 40 minutes across the state line in Pennsylvania.

It's here where all the signs point to Northview's resurgence. Two new, $450,000 broodmare barns house 77 mares and 45 foals; a third barn is on the way. Dozens of mares, their newborns nuzzled beneath them, lounge in the evenly cut paddocks and the shade of pin oaks. The huge sign out front can't help but brag: "Northview PA: Where Bright Futures Begin."

© 2010 The Washington Post Company