Chaos, Mistrust in Maryland as Clock Ticks

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A horsemen’s representative acknowledged Dec. 21 there’s still a little more than a week to get a live racing schedule in place in Maryland for 2011, but he said chances are slim if the situation isn’t resolved before Christmas.

During a chaotic four-hour meeting Dec. 21, the Maryland Racing Commission unanimously denied a request by the Maryland Jockey Club for 2011 racing dates at Laurel Park and Pimlico Race Course. The MJC offered to run a full 146-day schedule but with concessions and conditions horsemen and the racing commission found unacceptable.

Unless a deal is struck, Laurel will not open for live racing in January and full-card simulcasts will cease after Dec. 31. As of now, the grade I Preakness Stakes, second leg of the Triple Crown, won’t be run in 2011.

“They’ve got a very dynamic situation on their hands,” Maryland Thoroughbred Horsemen’s Association general counsel Alan Foreman said of MJC owners MI Developments and Penn National Gaming Inc. “This needs to be solved in the next 48 hours or the state needs to start proceedings to take control (of the racetracks).

“The track ownership here is broken. Maryland racing has no future with this ownership team.”

Damage already has been done. Foreman said that in the last two weeks, about 12% of the racehorse population stabled at Laurel and the Bowie Training Center has left the state.

The Maryland THA, Foreman said, has warned horsemen to prepare for a vacate-the-premises order at the end of the year. He said he didn’t know what would happen to the horsemen and almost 2,000 racehorses based in Maryland.

“That’s the question everyone needs to ask right now,” Foreman said.

During the MRC meeting, the track partners blamed the horsemen, and horsemen took aim at MID and PNGI. Horsemen liked the MJC proposal to “blackmail”—race 146 days but give up simulcast rights, contribute about $2 million to track operations, and deal with the end of training at Bowie.

In his comments to racing commissioners, Maryland THA president Richard Hoffberger indicated the MJC proposal was insincere. Horsemen received a draft of the proposal the evening of Dec. 20.

“I can tell you that the items that everyone has zeroed in on had been discussed in the past, and we told them that some of these things were unacceptable,” Hoffberger said. “The unequivocal closing of Bowie without replacing stalls was unacceptable. We mentioned that on day one. And what was the track’s response? Would tents at Laurel be acceptable? That’s the kind of track ownership that we’re dealing with.

“The giving up of simulcast rights is something that will never happen in Maryland. I appreciate the support of the people behind me because they understand what that means to their livelihood. It’s important that we have a program that provides year-round racing. If you have a racehorse in Maryland, you have few options of where you can go, and those options come up in the springtime.”

“I was never a fan of eminent domain until recently. I agree that this has gotten past the point where we can move forward. I hope the General Assembly pulls the trigger on eminent domain and includes racing at the facilities for an extended period of time.”

Hoffberger said the Maryland State Fair at Timonium has offered to provide stabling for horses and run more dates if needed. Changes in state law would be necessary.

Should the state take over the tracks, Cordish Cos., which is building a large slot machine casino at the Arundel Mills Malls not far from Laurel, has expressed interest in running them. Purses and breed development get 7% and racetracks 2.5% of revenue from slots at five casinos, only one of which is operating.

MJC president Tom Chuckas said the proposal for 146 days of racing included a provision that if terms of the agreement—contribution to expenses by horsemen—aren’t satisfied, the MJC would have no obligation to race beyond May 31. Horsemen bristled at the proposal.

“The purpose here is quite simple,” Chuckas told the racing commission. “The Maryland Jockey Club is attempting in our best effort to work with the horsemen to make racing survive, grow, and prosper. We can’t be in a position to lose money.

“So what this does basically is to apply for a year-round schedule, to seek some relief from the legislature, to work with the horsemen on a number of issues—some of them have been resolved, some are still outstanding--but this would take us to May 31. If we could get the legislative relief and we could get some of the things we are seeking with the horsemen, we could look past May 31.”

The heads of the MJC parent companies attended the MRC meeting. They spoke of a broken model and said they need time to work toward a solution.

“We have not always agreed on how the best way to get to a solution for this problem,” PNGI president and chief executive officer Peter Carlino told racing commissioners. “The quick answer is that no, we do not support running a full program this year. We think we need to do what is rational to downsize to a point where we can break even.

“There is no future for racing without slots. Half of that equation is already taken care of. We just have to figure out, given time, how to make the racetrack somewhat more profitable. That is our sole objective.

“Any notion that we are here to protect West Virginia is absolutely ridiculous. If I do nothing else today I want to clear that up. Our motions are to build a great future here in Maryland. That is why we came here.”

PNGI owns Hollywood Casino at Charles Town Races in West Virginia, Hollywood Casino at Penn National Race Course in Pennsylvania, and the Hollywood Casino at Perryville in Maryland. MRC chairman Louis Ulman contended PNGI is “holding the (racing) industry as hostage” and “destroying the industry.”

MID chairman Frank Stronach said he’s committed to working toward a solution but doesn’t want to lose money.

“I want to plead with the horsemen, I want to plead with the racing commission,” Stronach said. “We alone cannot fix it owning a racetrack. We have to fix it together. The model is broken. Not only Maryland but throughout America.

“We’ve got to cool down for a few months and work together and try to come up with something so that we can get racing on a very sound foundation.”