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Preakness future in doubt after racing vote

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November 30, 2010

Preakness future in doubt after racing vote

LAUREL, Md. (AP) -The future of the Preakness Stakes, the second leg of horse racing's Triple Crown, was in doubt Monday after the state racing commission rejected plans for a much shorter live racing schedule at Maryland's two tracks.

The commission, which turned down the plan by an 8-0 vote, told representatives of MI Developments and Penn National Gaming, partners in operating the Maryland Jockey Club, that its plan for 17 days of live thoroughbred racing at Laurel Park in January followed by 30 live days at Pimlico Race Course in April and May was unacceptable. The two venues are currently on track for 146 days of live racing this year.

The lack of an agreement for the future threatens racetrack employees, all off-track wagering in the state and the future of the Preakness, a Baltimore tradition that was set for May 21 at Pimlico.

Live racing is scheduled to conclude on Dec. 18 with simulcasting of out-of-state races continuing through the end of the year.

Commission member Mary Louise Preis expressed concern that a rejection of the Maryland Jockey Club proposal could threaten the Preakness Stakes, which generated $79.2 million in wagering handle this year and has an estimated economic impact of between $40 million and $60 million for Baltimore and the state.

Maryland Thoroughbred Horsemen's Association President Richard Hoffberger, however, said the Preakness alone does not help out everyday Maryland horsemen.

``That's not the purpose of what we're here for,'' Hoffberger said, ``so an out-of-town company, one day a year, can make a lot of money.''

Track owners said that once Anne Arundel County voters passed a referendum this month authorizing slot machines at a nearby shopping mall, operating live racing in Maryland at a continued financial loss was no longer an option. Prior to the partnership with Penn National, the tracks' owners had pushed for legalizing slot machines to boost revenue but then were disqualified from bidding by the state after failing to put up the $28.5 million application fee for a slots license.

``The model is broken; we can't continue losing money,'' said Mike Rogers, vice president of racing and gaming for MI Developments, before a hostile crowd of more than 250, mostly track workers and horsemen. ``We want to sit down with the stakeholders in here and come up with a viable plan.''

The commission members, however, rejected a two-page proposal that track management submitted for 2011 racing dates. They chastised Steve Snider, the senior vice president of corporate development for Penn National Gaming, saying the only reason his company partnered with MI Developments earlier this year was because of the possibility that slots might be approved for Laurel Park.

``This is a non-starter,'' John McDaniel, a member of the racing commission for 17 years, said of the proposed 2011 schedule. ``They are not legitimate, in my opinion.''

The commissioners said they understood the ramifications of their decision, but they did not believe such a significant shortening of the live racing schedule was in the best interest of Maryland racing.

``Rejecting this puts people out of work in the dead of winter,'' commission chairman Louis Ulman acknowledged of the vote, but then he pointed the finger at track owners. ``You all have not showed any good faith. It's obvious your plan was to get slots and without that plan you're willing to let racing die.''

Track representatives, including Maryland Jockey Club president Tom Chuckas, declined to comment after the meeting.

The track owners can file a petition for judicial review in Maryland's courts to block the commission's decision, said Senior Assistant Attorney General Bruce Spizler, who advises the commission.

Beyond that, the future was unclear. Alan Foreman, counsel to the Maryland Thoroughbred Horsemen's Association, suggested the state seize the tracks and sell them to a willing buyer.

``There has been a lot of talk about eminent domain,'' Foreman said. ``The more I hear what's coming out of the ownership, I'm not so sure we shouldn't go down that road.''

Early in the meeting, the commission reported that a new slots casino in Perryville, operated by Penn National, already had generated $672,000 for the state's thoroughbred purse account and $337,000 for a capital improvement construction account for the tracks. Under the state's slot-machine law, 7 percent of all revenue from slots goes toward purses and breeder awards.

Longtime breeder Mike Pons, whose family has operated Country Life Farm in Bel Air since 1933, asked why the tracks couldn't continue to run live racing, with the influx of purse money, at its current level until a new operating plan is reached.

``Our purse account will get a 25, 30 percent pay raise for the first time in a long time,'' Pons said. ``All we're missing is a stage, a place to play.''

Pons pointed out that the state's breeders and horsemen have the right to block simulcasting of out-of-state races if an operating agreement is not in place.

``We have the power to blow the whole thing up,'' Pons said.

The next racing commission meeting is scheduled for Dec. 21.


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