On a visit to the Washington area last September, Magna Entertainment Chairman Frank Stronach emphatically stated "slots are not the answer" to the ills of the racing game.

Yet, with a bill to legalize slot machines at Maryland racetracks apparently dead after a key legislative defeat Wednesday, Stronach's plans to rebuild Pimlico Race Course in Baltimore into an opulent showcase for the Preakness Stakes appear very much in doubt.

In fact, without the financial fuel slots would provide to revitalize Pimlico and Laurel Park, as well as boost Maryland racing's lagging purse structure, organizers say track management appears to face the grim prospects of eliminating stakes races, reducing the number of live races and cutting the purses of races that make up the daily schedule.

Adding to the tracks' woes, the state Budget Reconciliation Act of 2003 authorized nearly $1.1 million in escrowed money earmarked for purses to be taken instead for the state's general fund.

"The attitude seems to be it doesn't matter what happens to the racetrack," said Tim Capps, executive vice president of the Maryland Jockey Club, which operates the tracks for Magna. Racing is "a huge industry that's made its case for several years and had its case rejected."

Cash-rich Magna owns 14 racetracks and invested $226.2 million in racing last year, primarily on the purchase of the Maryland tracks and Lone Star Park in Texas, which landed the 2004 Breeders' Cup this week.

Stronach has envisioned folding Pimlico and Laurel into a grand racing empire. Betting handle would skyrocket in his plans to develop a complex, interactive home-betting environment that taps into an international market that wagers $85 billion a year on the sport.

Stronach last year also vowed to use money from his company's land holdings to pay for facelifts for Laurel and Pimlico.

A cautious Maryland Racing Commission, however, didn't approve the sale of the tracks to Magna until it received a guarantee that $30 million would be spent over four years on improvements in the living conditions on the backstretches.

At its monthly meeting Wednesday, the commission lambasted Magna executive vice president Edward Hannah for being unable to detail a plan for the first $5 million in backstretch improvements, due Aug. 31, unless slots were part of the scenario.

"Your own chairman said it didn't matter if slots were coming or not, unless he's recanted that statement," scolded commission member John Franzone. "We are not recanting the agreement," Hannah responded. "We will abide by the agreement. We will go beyond the agreement."

Hannah promised to present a comprehensive plan, after the legislative session ends, when the commission meets again May 7. "We've always hoped slots legislation would come in," he said.

Meantime, there is little impetus in Annapolis to float a bill that might subsidize Maryland racing, which has faced heavy competition from slots-powered tracks in Delaware and West Virginia. Results of a 2002 Maryland Equine Census conducted by the Maryland Department of Agriculture found 38,000 people employed in the state's $5.2 billion racing industry. The state, however, faces a $2 billion budget shortfall.

"Nobody has an interest in purse enhancements. Everyone wants to walk away from the horse racing industry," said Del. Clarence "Tiger" Davis, chairman of the racing subcommittee in the House Ways & Means Committee.

A stagnant or declining purse structure would devastate the sport in the state, said leading trainer Anthony Dutrow, who predicted a continuing exodus of horses and jockeys to neighboring racetracks.

"It's like the politicians can't see it," Dutrow said. "It's going to hurt this industry so much."