The owners of Maryland's two largest racetracks announced yesterday that the state's persistent reluctance to legalize slot machines will force them to dramatically reduce their operations, potentially hobbling an already ailing local horse industry.
Gov. Robert L. Ehrlich Jr. (R) called the decision the latest sign that a state considered to be the cradle of thoroughbred racing in America is watching its horse industry collapse. If neighboring states continue to expand other forms of gambling to support their racetracks while Maryland stands still, Ehrlich said, "we are going to be in very deep trouble."
The plan outlined by Magna Entertainment Corp., owner of Laurel Park and Pimlico racetracks, involves selling the company's 178-acre training facility in Bowie for a housing development and reducing by nearly half the number of live racing days in the state.
The Preakness, the second leg in racing's Triple Crown, would remain at Pimlico. But racing there would be cut from 60 days a year to 18, turning the historic downtown Baltimore site into little more than an oversized off-track betting parlor.
Company officials said the proposal is neither a bluff nor an attempt to force the legislature's hand on slots. To the contrary, they said, the plan is being submitted in recognition that the company cannot expect additional revenue from slots.
"This industry is declining. It's heading into oblivion," said Paul Cellucci, a former Massachusetts governor who is now the Canadian corporation's executive vice president. "We don't want that to happen."
The political fallout from the announcement was swift, with Ehrlich and Senate President Thomas V. Mike Miller Jr. (D-Calvert) seizing on the news to again call for legalizing slot machines -- an initiative they have championed together, without success, since Ehrlich took office in 2003.
"It's tragic and sad," Miller said. "The state's going to lose thousands of jobs, thousands of acres of farmland will be sold to developers -- all the result of petulance and obstinance."
Slot machines have long been considered a savior for the racing industry. With slots, racetracks in Delaware and West Virginia have increased their racing payouts or purses and, in turn, attracted a higher caliber of horse and a larger betting audience. Some local thoroughbred breeders, owners and trainers have closed their farms and moved closer to the more profitable tracks.
Ehrlich and Miller said they hoped the even more dire climate of a truncated Maryland racing schedule might force House Speaker Michael E. Busch (D-Anne Arundel) to reconsider his opposition to slots and possibly entertain passage of gambling legislation during a special legislative session this year.
But after meeting yesterday with Magna executives, Busch had a far different impression of the company's plans. By shrinking the racing calendar and increasing purses, the company actually might be able to stabilize the industry, he said.
"It seems to me what they've laid out is a way to put the best product forward, and try to create a national audience for their product," Busch said.
Busch said that the Magna officials never raised the issue of slot machines with him and that he sees no scenario in which the House would resume consideration of the issue before January, when members convene in Annapolis for their regular session.
Parts of the proposal must gain approval from the state's racing commission and the legislature, though both steps are considered likely. Company officials said that although they expect an outcry from many in the industry, the move actually represents a last-ditch attempt to save Maryland racing because it would allow them to increase purses to competitive levels.
The theory behind reducing racing days is based on a simple calculation. The company makes money at Pimlico only once a year -- on the day of the Preakness. By curtailing losses from the remaining schedule, more money could be paid out to bettors, in turn making the tracks more appealing.
"If our purses keep going down, we could wind up with smaller and smaller fields, and eventually, an end to racing in this state," Cellucci said. "We just can't keep losing money."
Cellucci said the company considered moving the Preakness to Laurel Park, where Magna has invested $38 million on improvements including a new turf track, but concluded that the race is so identified with Baltimore that a move would be counterproductive.
All the changes could have unintended consequences, said Gerard Evans, an Annapolis lobbyist who represents thoroughbred-horse breeders, trainers and track workers.
"Our people survive based upon the number of days their horses run," Evans said. "It's a disaster for us. Basically, it just speeds up a continuing death spiral."
For Prince George's County, the sale of the Bowie training center could mean a loss of one of the few large swaths of undeveloped land in the northern part of the county.
County Council member Douglas J.J. Peters (D-Bowie), whose district includes the old racetrack site, said the land is zoned to accommodate one house on each half-acre, but the council soon will consider whether to allow less development.
While Democratic and Republican leaders appeared focused on affixing blame for the industry's crisis, Ehrlich -- who is up for reelection next year -- acknowledged that any failure to save horse racing falls, at least in part, on his shoulders.
"If the racing industry collapses under my watch, I'm sure it will be a major issue in the campaign," he said. "Leaders take responsibility. That's what leaders do." He paused, then smiled. "Of course, it would help to get a little cooperation from the House of Delegates."
Staff writer Avis Thomas-Lester contributed to this report.