Approval of slots casino referendum will forever change Maryland horse racing

After losing its legal bid to wrest a slot machine franchise away from Arundel Mills Mall, Laurel Park appears headed to being a simulcast-only facility with no live racing.
After losing its legal bid to wrest a slot machine franchise away from Arundel Mills Mall, Laurel Park appears headed to being a simulcast-only facility with no live racing. (Dominic Braccoll For The Washington Post)
By Andrew Beyer
Thursday, November 4, 2010; 12:44 AM

The outcome of Tuesday's referendum on slot machines in Anne Arundel County will permanently change the face of Maryland horse racing. Laurel Park is likely to terminate live racing, perhaps as soon as Dec. 18, and operate only as a simulcast facility. The Bowie Training Center will be closed. Year-round racing will cease, and Pimlico will operate only a short springtime meeting centered around the Preakness.

Such developments once would have been unimaginable. Thoroughbred racing and breeding used to be a principal industry in Maryland and the sport had broad popular appeal. Laurel, the home of the Washington D.C. International, was recognized worldwide. Today the shrinking of the industry will, of course, have a devastating impact on people who make their living in it, but the public will react with a collective shrug.

Except for a few special events, Maryland racing has been nearly dead as a spectator sport. On typical days at Laurel, the grandstand is almost deserted and the few customers watch out-of-state simulcasts instead of the live races. The track was the victim of competition from tracks with slot machines as well as years of poor management, culminating with the disastrous decision that cost Laurel a lucrative slot machine franchise.

A statewide referendum in 2008 had approved slots, and legislation had been passed to ensure that the machines would bolster the horse industry. Laurel Park was universally expected to get one of the coveted slot franchises. But at the deadline for submitting license applications, the Magna Entertainment Corp. - parent company of the Maryland Jockey Club - declined to put up the $28.5 million payment that was supposed to accompany the bid. The state had no choice but to award slots to the other bidder, the Cordish Companies of Baltimore, which proposed building a large facility at the Arundel Mills mall.

The Maryland Jockey Club fought back. It bankrolled a citizens' group that wants to stop slots at Arundel Mills, got enough signatures to put a county-wide referendum on the ballot and spent millions of dollars in a bitter fight against the Cordish proposal. But voters backed the Arundel Mills facility by a decisive 56 percent-to-44 percent margin. "The demand for jobs and the need for revenue in the state were [the voters'] priority," said a dejected Tom Chuckas, president of the Maryland Jockey Club. He said the company already prepared its worst-case contingency plan, which it will present to the state racing commission in November. It calls for a closure of Laurel, whose last scheduled racing date is Dec. 18, and a Pimlico season lasting approximately 40 days.

As drastic as these changes are, the Maryland thoroughbred industry is not necessarily doomed. An optimist might see something positive developing.

Under the state's slot-machine legislation, 7 percent of all revenue from slots - wherever they are located - is earmarked for racetrack purses and breeder awards. Though the horse industry fought fiercely against the Arundel Mills slots, its proposed 4,750 machines will generate millions of dollars for Maryland racing.

But here's the rub: This money goes to purses - not to the track owners. And somebody has to operate a track to run these races. Laurel Park is a money-losing business, and Chuckas said he could not envision a way that any owner could make it profitable without slots. As a result, the Maryland Jockey Club will use Laurel as a simulcast facility and develop the rest of the property. Pimlico is profitable because of the Preakness, and operating a short season at the Baltimore track makes sense economically. A high-quality racing season at Pimlico will be much more appealing than the current fare in Maryland.

Year-round racing is a model that doesn't work anymore. With the U.S. thoroughbred population shrinking, there are too few horses and too many races, resulting in small fields that bettors dislike. Most racetrack operators know they should pare down their racing schedules, but their horsemen almost always resist such cutbacks.

However, one track did radically alter its operations this year - and the results were a revelation. After two years of negotiations with its horsemen, Monmouth Park shortened its summer meeting and abandoned its traditional five-day-a-week racing schedule, operating only on Friday, Saturday and Sunday, in order to offer significantly higher purses. Betting totals skyrocketed. Attendance was up. Enthusiasm was up. "We learned that less is more," said General Manager Bob Kulina. "If you put a good product out there, people will bet it. What I'd like to see is for all of the tracks in the mid-Atlantic to talk about doing something like this."

The Monmouth experiment ought to be a model for Pimlico. A short springtime meeting at Pimlico could offer substantial purses and breeder awards, bolstered by revenue from all of Maryland's slot machines as well as the simulcasting operation at Laurel. People in the industry surely won't be satisfied by a 40-day racing season with good purse money, but after Tuesday's referendum results there are no better alternatives.

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