When Gov. Harry Hughes signs Senate Bill 569, which reduces the state's share of revenue from thoroughbred racing, it will mark the start of a bright new era for the sport in Maryland. It had better. After years of steady decline in the tracks' business, this measure is their last hope for salvation.
The state now takes 4.09 percent of all the money wagered at Maryland tracks. For years, industry leaders have complained that this share is exorbitant; Maryland collects millions in taxes while most track owners and horsemen are losing money. These arguments were finally heeded in Annapolis, and on July 1 the state's share from parimutuel wagering will be slashed to 0.5 per cent. As much as $12 million a year will be funneled back into the industry.
"What this means," said Pimlico General Manager Chick Lang, "is that we've finally been given the tools to do all the things we've been crying about. But because we've finally got tax relief doesn't mean we can sit back and put our feet on the desk. If we don't spend this money wisely on an improved product, we'll be back in the same spot three or four years from now. Only then we couldn't go back to Annapolis because they've got nothing more to give."
Racing fans who are accustomed to years of lousy treatment at the Maryland tracks may wonder, cynically, if any change is possible -- tax bill or no tax bill. But in defense of the track managements, under the old, onerous tax measures they never had the money or the financial incentive to improve their facilities significantly. The experience of the Maryland harness tracks, which received similar tax relief in 1983, shows just how much this infusion of capital can accomplish.
When Frank DeFrancis bought Freestate Raceway, he made improvements, promoted his product aggressively, increased his business dramatically -- and kept losing money. He said he learned his final lesson about the economics of racing when he staged a race between Gloria Steinem and actress Loretta Swit. The attraction boosted his crowd and increased the evening's handle by $100,000.
"The state got more money, the horsemen got more money, but by the time I had finished with promotion and marketing, I wound up losing $29,000," DeFrancis said. "As long as they take all that money out of your gross income, there's no way a bottom-line profit can be achieved. I am a gambler but I've got to have some kind of odds to work with."
The harness industry went to the legislature and pleaded for tax relief. DeFrancis argued that it was the only way the Maryland tracks could compete with Brandywine in Delaware and Liberty Bell in Pennsylvania, both of which were thriving. Two years after the legislature granted that tax relief, business is booming at Freestate and Rosecroft. Freestate, in fact, is one of the great success stories in American racing, and its average nightly handle grew to exceed the total at Brandywine and Liberty Bell combined.
With this experience in harness racing, DeFrancis is understandably optimistic about his prospects at Laurel Race Course. After buying the track this winter, he already has started making improvements, and he said his long-range goal is to "create a track with creature comforts and ambiance that are second to none." He will continue to promote the track aggressively, he wants to improve the stable area and he wants to use some of the new funds to create a system that will insure accurate reporting of workouts.
Pimlico's most obvious need is for physical improvements. Lang said he would like to construct a new tunnel linking the grandstand to the infield, and to erect some permanent facilities in the infield, so that fans could use it on days other than Preakness Day. He also wants to refurbish the far end of the grandstand -- the part that looks as if it belongs in the New York subway system.
Both track executives are pleased that the new racing bill will generate more money for purses. In recent years, a number of top stables have left Maryland for greener pastures, but the greater money available here should help stop the defections.
If the managements of Laurel and Pimlico act wisely, a lot of negative trends in the sport in Maryland are about to be reversed. "If the governor and the General Assembly hadn't acted," DeFrancis said, "I think you could have written off the Maryland thoroughbred industry. But now I'm as optimistic about Maryland racing as I can be."