As the Maryland Jockey Club moves forward under new leadership, the owner of Pimlico Race Course and Laurel Park said an emphasis will be placed on improving the day-to-day racing product by lowering takeout rates and working to improve field size through regional cooperation.
The Stronach Group chief operating officer Tim Ritvo said the company that owns MJC is interested in increasing interest in its daily racing product. He made his comments during a Nov. 26 press conference following the official announcement that Sal Sinatra, currently director of racing at Parx Racing, will leave that company to head racing operations at MJC.
Ritvo noted the MJC was pleased with outgoing head of Maryland racing operations Tom Chuckas' efforts to improve the performance of Preakness Stakes (gr. I) day, the biggest race program in the state.
He said two points of emphasis in accomplishing the goal of improving the performance of the racing product would be lowering takeout rates to spark interest in wagering on Maryland cards, and cooperation with other Mid-Atlantic tracks to form a schedule that will help increase field size.
In terms of pari-mutuel handle, Ritvo pointed to the Nov. 15 Laurel Park card as an example of a day The Stronach Group believes should have attracted more handle than the about $3.2 million Ritvo said was wagered. Ritvo suggested the day offered large, quality fields and intriguing wagering opportunities, but seemingly was not reaching bettors.
In the competition to increase wagering interest among customers at simulcast and advance deposit wagering outlets, Ritvo said Maryland has to look at lowering takeout rates, which is essentially lowering the price of wagering. Takeout is the amount of each wager retained to pay the track, purses, and taxes.
Compared with other tracks, Maryland has a high takeout on its exacta wagers, 21%, and one of the country's highest trifecta takeout rates at 25.75%. Those high rates are part of the reason Laurel and Pimlico both rank outside of the top 40 tracks rated by the Horseplayers Association of North America.
"We'll look at takeout structures, we'll look at every formula to get the bettor to start looking at our product again, knowing that the economic engine of this sport is the player," Ritvo said.
Ritvo said MJC officials will meet with horsemen on any plan because takeout changes affect the overall business structure, but he wants to find pricing that garners attention for the Maryland racing product. He said a two-point reduction of the takeout rate on exotic wagers could pay off if it gets people betting the Maryland races and handle goes up 10% to 12%.
"I think our product is a good one. The idea is to find a way to get the purchasers of our product, the economic engine, the players, to look at us again," Ritvo said. "But we would run the financial model and make sure it's in the financial interest of all involved, including the players."
In strengthening the product, Ritvo said MJC plans to reach out to tracks in neighboring states to fashion a schedule that would reduce competition and allow each of the region's tracks to offer larger fields. Field sizes will continue to be a challenge for tracks because of reduced foal crops in recent years, and the Mid-Atlantic region often has a crowded racing schedule.
Larger field sizes are attractive to bettors because of the increased wagering options and potential for large payouts.
"Maybe within the Mid-Atlantic area there is some appetite for some of these facilities to come together and offer an expanded race schedule, but a cooperative one," Ritvo said. "We'll be reaching out to places like Delaware, Virginia, maybe Philadelphia, to say to them, 'What does a cooperative schedule look like? How do we increase field size and stop banging heads against each other? As the foal crop shrinks, what's the right schedule?' "
The MJC put the press conference together after it sent out a press release announcing what it called a resignation of MJC president and chief operating officer Chuckas. That so-called resignation came four days after The Blood-Horse reported that Sinatra would be hired to head racing operations at MJC.
On Nov. 26 Ritvo confirmed that Sinatra would head racing operations for the MJC.
The status of Chuckas, who declined comment when reached Nov. 26 by The Blood-Horse, had been uncertain since it was reported Sinatra would be accepting the position of vice president and general manager of MJC.
In terms of Chuckas' performance since 2008, Ritvo emphasized the job he did improving the the Preakness, and acknowledged his political skills. Ritvo said the MJC is talking with Chuckas about a possible job on the political side.
Ritvo noted Sinatra also had success increasing interest in big race days at Parx Racing, noting the performance of the Pennsylvania Derby (gr. II) day. But it's the day-to-day performance in Maryland that The Stronach Group clearly believes is underperforming.
"We're looking to grow that and move market share to Maryland," Ritvo said.
"Maryland is a great horse culture with great horse racing history, and we want to signify to the bettors that we're putting a very good product with good field sizes out there and we want you to come back and look at it."
Maryland Racing Commission chairman Bruce Quade liked hearing the commitment to Maryland racing.
"One thing I've been told is they want to enter into a circuit or a quasi-circuit, and I think that's crucial to the success of the region. There are not enough horses, and we can't afford to continue to compete for the resources," Quade said. "I'm extremely encouraged by the statement that the Stronach corporation is turning all its attention and resources toward Maryland."
Ritvo also noted that when The Stronach Group talks with other tracks in the region, it would be interested in taking over racing operations in a deal similar to its move in Florida, where it owns Gulfstream Park and this year leased racing operations of Churchill Downs Inc.-owned Calder Casino & Race Course, now called Gulfstream Park West. That agreement ended direct competition between the two tracks.
Ritvo said the Florida arrangement has helped Stronach's Florida operations save money by using the same staff at each track. He said they'll make similar offers in the Mid-Atlantic region.
"We're a company that wants to be able to say to them, 'We have these services in place. How can we better leverage them to move ahead as an industry?' " Ritvo said.
The MJC said talks have begun on the topic and will continue.
"We've had some meetings," Ritvo said. "We're out there saying to racinos, 'Are you willing to work with us on a cooperative race schedule where we can consolidate racing staff and racing teams?' Some of the success in Florida was a win-win. We were able to consolidate the racing teams, the racing dates; it's better for everybody—track, horsemen, state. There's definitely an appetite for this."
Ritvo said casino-owned tracks typically put their emphasis on gaming, but The Stronach Group will continue to put racing first. He said the company would be interested in talking with any track owner interested in an arrangement similar to the one CDI made with The Stronach Group in Florida.
The MJC also hopes to move forward on facility improvements, including added stalls at Laurel Park that could allow the closure of Bowie as a training center or closing Pimlico Race Course for off-season training. He also said the company would eventually like to improve the facility at Pimlico to make the Preakness more profitable.
"We have to figure out a longterm plan of what the Preakness is going to look like and how a redevelopment of that (facility) some day will increase our revenues," Ritvo said. "We've seen the model at Churchill Downs. They're very successful with the (Kentucky Derby Presented by Yum! Brands). We think we should get very close to something like that in the years to come."
John Scheinman contributed to this story