Gov. Harry Hughes' proposed multimillion dollar bailout of Maryland's troubled racing industry was called into question today when it was revealed that the state may already own the rights to the Bowie track's racing days, for which Hughes has offered to pay $6 million.
Lawyers from the office of Attorney General Stephen Sachs are now preparing a definitive opinion on who owns Bowie's racing season, but they have informed Hughes that they "feel" the 96-day season belongs to the state, Huges' chief of staff Ejner Johnson told a legislative panel today.
The revelation threw a major political obstacle in the path of Hughes' racing consolidation plan that would pay Bowie race course $6 million for its 96 racing days, and divide Bowie's business between the two remaining thoroughbred tracks, Laurel and Pimlico.
"How are we going to tell the black caucus that social programs are being cut back, and we're going to take $6 million and give it to Bowie for racing days that they don't even own?" asked Del. Gerard Devlin (D-Prince George's County), vice chairman of the powerful House Ways and Means Committee, which is hearing the bill.
Hughes has defended the $6 million price tag as a fair deal for the state, saying it averages out to roughly the same price that race tracks have paid each other for their racing seasons over the last several years.
However, officials have acknowledged that the $6 million figure was set by Bowie's owners in private negotiations, and was presented to the state as the track's nonnegotiable price for bowing out of Maryland racing. The argument that the state was getting a good deal for the 96 days was largely a rationalization for accepting Bowie's prearranged price, the officials said.
But if Sachs' office concludes that the racing days already belong to the state, this argument would be considerably weakened, Johnson said today.
"People might question whether this [$6 million] was an appropriate expenditure of dollars," Johnson told the legislators.
Johnson noted that even if the lawyers rule that Maryland owns all racing days used by the tracks, the state could not close down Bowie without compensating its owners for at least some portion of their business. The present bill, of passed, would pay Bowie the full value of its business, however.
Throughout the industry's history, the state legislature has awarded "racing days" to each track, and it has been presumed that the state therefore owns the days. The tracks' owners contend, however, that they won the days since they have bought and sold them from each other over the last two decades.
The controversy over the ownership of the days is only one of several surrounding the complex legislative package, which Hughes and legislative leaders are promoting as a reform measure to treat the financial and ethical ills of the beleaguered racing industry.
Today, the bill was attacked by lobbyists for the thoroughbred and harness tracks from the counties and cities where the tracks are located and by organizations of horsemen, all claiming that it does not address their needs.
"What you have seen here is everybody in the racing industry coming in and telling the state what it would take to buy them off," said Nathan Cohen, vice president of the Pimlico track.
"The testimony today raised a tremendous number of new issues that have to be resolved before the bill could pass," said Sen. Melvin Steinberg, chairman of the Senate finance committee. "We're back to square one."