While Gov. Robert L. Ehrlich Jr.'s effort to install thousands of slot machines at Maryland racetracks has dominated political debate in Annapolis, a lower-profile piece of his proposed gaming legislation -- the abolition of the Maryland Racing Commission -- has raised concerns within the racing industry.
Ehrlich aides told lawmakers and lobbyists Tuesday there would be major revisions in how gambling profits are distributed after track owners, horsemen and breeders complained about their share. But Ehrlich (R) will continue to press for the elimination of the racing commission, which has been in existence since 1920.
The current bill calls for the commission, which oversees licensing and regulation for Maryland's thoroughbred and harness tracks, as well as off-track betting facilities, to be replaced by a nine-member panel that would oversee racing, state lottery and gaming. The current Maryland Lottery Commission also would be eliminated under the proposal.
The new panel would be made up of two representatives of the thoroughbred industry, two from harness racing, and five at-large appointees.
"The majority of the industry doesn't think it should be abolished," said Thomas Bowman, president of the Maryland Horse Breeders Association, who has been acting as a liaison to the racing industry at the governor's request. "The horse industry would be put in a position that all the people [on the new commission] with horse interests could be out-voted by those without it. That's a key thing to be reckoned with."
In recent years, the racing commission has presided over acrimonious relations between horsemen and the Maryland Jockey Club, which recently sold majority interest in Laurel Park and Pimlico to Canadian racing conglomerate Magna Entertainment. As a condition for issuing an operating license, the commission forced Magna to sign an irrevocable subscription agreement that ensures it will spend a minimum of $30 million on upgrades to stable and housing areas at the tracks.
Industry observers have expressed concern that if the commission is abolished, the improvements could be in jeopardy.
"They would set up a banana republic that has no understanding of the sport that would be controlled by the racetracks because of perks and politics," said one industry leader who spoke on the condition of anonymity.
Ehrlich aides did not return calls requesting comment.
The House Ways and Means Committee will take up the governor's bill Feb. 25 and the Senate Budget and Tax Committee will do the same a day later.
Maryland Jockey Club President Joe De Francis, who has been lobbying hard in Annapolis for the passage of a slots bill, also declined to comment. He often has found himself at odds with racing commission members, particularly John Franzone, an appointee of former Gov. Parris Glendening.
Tracks chief operating officer Lou Raffetto said he supports the governor's bill.
"We may have a situation where there will be people sitting without any agendas, hopefully making a decision based on the evidence before them," Raffetto said. "I can candidly say that hasn't always been the case in the two years I've been here."
The nine unpaid racing commission members serve staggered four-year terms and are appointed by the governor. Two positions, those of Ellen Moyer, the mayor of Annapolis, and Paige Davis, are up for renewal.
Moyer, a fierce promoter of racing's heritage in the state, has been critical of the governor's bill. She sent a letter last week to House Speaker Michael E. Busch (D-Anne Arundel) decrying its lack of protection for the Preakness Stakes and guarantees of live racing dates.
If the bill passes, she wrote, "Maryland's tracks, in fact, become casinos and Maryland the future simulcast capital of America."
While Moyer does not object to centralized supervision of lottery, Keno, off-track betting, phone-betting and scratch tickets, she said they "should not be confused as in the proposed bill with the regulatory authority over the horse racing industry."
"People don't understand how much we do in relation to racing," said racing commission chairman Louis Ulman, "and how much knowledge you need. When we had the approval process for the sale to Magna, we had a subcommittee of three people -- a CPA, a business consultant and a lawyer -- spending hours going over that."
Ulman wondered how the elimination of the commission would affect the proposed sale of Rosecroft Raceway to Centaur Racing, an issue it is about to consider.
"If the bill passes, there is no racing commission in July," Ulman said. "How does that new commission deal with issues we've been dealing with for months and years?"
Much of the racing industry also would be disturbed by the consolidation of the racing and lottery commissions because "one of horse racing's biggest competitors is lottery," said Richard Hoffburger, president of the Maryland Thoroughbred Horsemen's Association.
For several years, the state used surplus funds from the lottery to supplement race purses once the lottery's budget had been met. That ended in April 2001 when the legislature killed a $10 million annual subsidy for the sport.
"You're going to have the same board regulating lottery, Keno and horse racing, and they're all in competition for the entertainment dollar," said leading thoroughbred trainer Dale Capuano.
"Racing is not a simple subject; you almost need to have a degree in it," Franzone said. "To start over at this juncture is not prudent at all."