Three years ago, Maryland's thoroughbred racing industry was in trouble. Average daily attendance and betting handle were at their lowest levels in years, devaluing purses and causing horsemen to defect. Track owners were doing little to promote their product or improve aged facilities.

Then, in December 1984, Frank De Francis and partners Tom and Bob Manfuso purchased Laurel Race Course, and with progressive management began to rekindle the thoroughbred industry. Revitalization was furthered in July 1985 when the state reduced its takeout on parimutuel wagering, allowing the tracks to use their increased funds to bolster purses and refurbish facilities.

The industry's renaissance is well-documented. Attendance last year totaled nearly 2.4 million, up 19 percent from 1984, and the handle reached $336.7 million, up 18 percent over the same period. Today's purses represent an all-time high, but it appears the quality of racing has changed little.

Although the number of people going to the track has risen, the level of competition they see has not gone up substantially. But fields are fuller and purses higher, signs that the level of racing will rise correspondingly in time, horsemen say.

Using Laurel's November races as a barometer, the composition of races last month closely resembled those of 1984, when the industry was near gasping. In both instances, 2-year-olds accounted for 27 percent of the races, older allowance and stakes horses 17 percent. The cheapest claiming price did rise from $4,000 three years ago to the current $5,000; however, in November 1984, only 7 percent of the races were for the lowest possible claiming price, compared to 12 percent last month.

"I don't think the quality has changed since purses were increased," said racing secretary and handicapper Larry Abbundi, who has written most of the races in Maryland since 1966. "I think our horses have always been competitive. As for the number of $5,000 horses, you need them to fill races perpetuated by gimmicks. We have four {triple races} a day, and we have an abundance of horses in the $5,000 range that pretty much assure us of getting full fields for those races."

Abbundi has had little problem assembling large fields of late. Last month, Laurel averaged 9.1 horses per race, compared to 8.5 in November 1984 and 8.1 in November 1977. Many horsemen believe that increased purses and fuller fields will heighten competition.

"A lot of people still see some cheap horses, some cheap races, but you've got to have the volume," said King Leatherbury, Maryland's leading trainer. "Today's high purses will cause the quality to increase, but it takes time. You may still see $5,000 claimers down the road, but . . . people eventually will catch on that they have to have better horses to compete.

"I've weeded out my bad horses. As soon as a horse can't get a check in a couple of starts at the bottom here, I send them up to Penn National {near Harrisburg, Pa.}, and they stay there. You used to be able to hang on to some cheap horses and grind out the expenses, maybe make a few dollars. But, expenses being what they are now, you can't do that anymore."

De Francis and the Manfusos, not waiting for the residual benefits of the state reducing its takeout, are taking an aggressive approach toward upgrading racing stock. They are close to convincing two of the nation's predominant trainers, Jack Van Berg and Wayne Lukas, to race some of their horses here.

"The public has a right to demand the best horses," De Francis said. "But attracting better stables is a slow and tortuous process. Before any trainers decide to make a move, they want to see that the program they're headed for is genuine and going to continue be productive."

Van Berg is expected to send a string of horses to Laurel next month, and Lukas said he is considering transferring his midwest division to Maryland, perhaps when Pimlico reopens in March.

"I have no illusions about the racing in Maryland," Lukas said recently from California. "They run a wide range of races there, but the horses we'd be going against -- primarily allowance and low-grade stakes horses -- are legitimate in their class. We wouldn't expect to have an easy time whatsoever."

Abbundi said the addition of such horses would not restructure the racing program. "What it means," he said, "is that instead of having seven horses in an allowance race, we'll have eight."

By attracting a major stable to Maryland, track officials could better their product, although they run the risk of alienating some horsemen. "A guy like Lukas won't pose too much of a threat to the people who have mostly claimers," said longtime trainer Bernie Bond, "but he'll kill a guy like me with second-rate allowance horses. I'd welcome him here -- I think it'd be good for racing -- but, personally, I'd rather see him stay away."

In the last year, several trainers have found Maryland a tough circuit to crack. David Vance ventured here from Louisiana with an apprentice jockey, won only nine of 123 races, then retreated south. The rider, Kent Desormeaux, remained, and went on to dominate the jockeys' standings.

Jeff Kirk was fresh off a training title at Philadelphia Park when he arrived at Pimlico last spring. He ranked fourth for the meeting, but was unable to sustain his winning ways; he left the state after going six for 84 at Pimlico's summer meet.

"Maybe the types of races haven't changed much," Bond said, "but make no mistake -- the competition here is fierce. If you can win here, you can win anyplace in the world."

In October, Dennis Heard shipped his stable from New Jersey to Laurel and made an immediate impact. Operating a private stable for Glenn Lane, Heard has won 25 percent of his starts at Laurel this fall and ranks fifth in victories.

"We came to Maryland primarily because purses are high, management was receptive to us and we saw an opportunity to win some races," Heard said. "But you can't really compare racing here to racing in New Jersey. I would say the bottom levels are very equal, but the claiming scale here doesn't match New Jersey's. I mean, what's {a $14,500 claimer} equivalent to in New Jersey, $12,000 or $16,000?

"The momentum of racing in Maryland now is picking up to the point where it's attracting people. Management plays a big part in that, and management here seems very willing to extend itself. It's gone well beyond the mom-and-pop operation of a few years ago."