by John Scheinman
 
Lou Raffetto Jr., president and chief operating officer of the Maryland Jockey Club, was fired yesterday by Magna Entertainment Corp. and replaced with veteran racetrack executive Chris Dragone.

The decision sent shockwaves through the Maryland racing industry, which recently scored a major victory when the state legislature voted November 19 to allow comprehensive slot machine legislation to go before voters next year in a referendum. Raffetto was widely considered instrumental in paving the way for that vote, taking the place of a polarizing industry figure, former Maryland Jockey Club head Joe De Francis, and last year helping to negotiate a 15-year revenue-sharing agreement with the harness industry after years of acrimony.

Maryland Racing Commission Chairman John Franzone went so far as to say the firing of Raffetto jeopardizes Magna's ability to secure a license for Laurel Park if the state referendum on slots passes next November.

"I think they're toast," Franzone said of Magna. "I think they have made so many management faux pas and are losing money at such a high rate, I don't think [there is] any way anyone on the [State Lottery] Commission can say we should give slots to Magna."

Franzone said that when he heard Raffetto was going to be fired, he called Frank Stronach, chairman of Maryland Jockey Club, which runs operates Pimlico Race Course and Laurel Park, and pleaded with him to change his mind.

"I called him and I said, 'Frank, this is without a doubt the dumbest decision you will ever make, and you guys have made a lot of dumb moves,' " Franzone said. "Everybody likes Lou. Lou is liked down in Annapolis. I'm not saying he can run a slots parlor, but we've got an excellent racing program and the horsemen love him.

"I said, 'Not only that, Frank, you guys have such a bad reputation with turnover, you will be sealing your fate with this slots license.' And he doesn't listen. I said, 'Frank, Magna is losing about $25-million a quarter, and Laurel and Pimlico break even. Why don't you send your henchmen after the guys losing money?’ "

Stronach could not be reached for comment. Raffetto reportedly was told he was being let go by Brant Latta, senior vice-president of operations for Magna, during a meeting at Laurel Park.

In a press release, Magna said Raffetto would leave immediately to pursue other opportunities. Repeated calls to Raffetto were not returned.

Dragone, 48, worked for eight months last year as a senior vice president and general manager for the Maryland Jockey Club before leaving to become executive director of the New York Thoroughbred Breeders. He has been named president and general manager.

"Lou worked very hard during his tenure with MJC to manage the day-to-day operations and improve the future of Thoroughbred racing in the state of Maryland," Stronach said in the release. "We wish him well in his future endeavors."

Raffetto, hired by De Francis to become general manager of Laurel Park and Pimlico in 2000, had a reputation for being a no-nonsense executive who also could compromise. In the past year, he saw Maryland Thoroughbred racing through a bitter period, where purses and stakes races were cut dramatically in an effort to eliminate a deficit in the race purse account. Once the leading racing state in the Mid-Atlantic region, Maryland racing has been battered by the introduction of slots machines at tracks in neighboring states such as Delaware, West Virginia, and, most recently, Pennsylvania.

Despite the cuts, Maryland horsemen have generally stuck by the local tracks, hoping for expanded gaming and resisting the temptation to move their operations to richer tracks. The decision to fire Raffetto came as a blow.

"I think it's the biggest mistake involving Maryland racing since I've been in the industry here," said Alan Foreman, general counsel to the Maryland Thoroughbred Horsemen's Association. "Lou Raffetto gave credibility to Magna that it lacked otherwise in this state. It is a tremendous blow not only to Magna but Maryland racing.

"I have no clue as to why this was timed the way it was, handled the way it was, and why it happened. I am astonished and disappointed by this whole thing."

Maryland Thoroughbred Horsemen’s Association President Richard Hoffberger ripped Magna for firing Raffetto, sarcastically comparing the company's plans for the Maryland tracks to the struggles at Gulfstream Park.

“It appears they're developing a plan that is as successful as what they have at Gulfstream, where they took a wonderful winter meet and developed it into one of the worst race books on the East Coast," Hoffberger said. "Their reputation is bad because they haven't been successful. Everything they're doing runs contrary to what the industry believes is the right thing to do."

Magna registered a loss of $87.35-million in 2006 and $105.29-million in ‘05.

Raffetto, who in the 1990s helped revive Suffolk Downs and reinstate the running of the Massachusetts Handicap, became vulnerable in Maryland in September when De Francis and his sister, Karin De Francis, sold their remaining shares in Laurel Park and Pimlico for a combined $18.3-million plus interest.

De Francis sounded demoralized at the firing of Raffetto.

"One of the very best things that I did in 18 years as CEO of the Maryland Jockey Club was hire Lou Raffetto," De Francis said. "Words cannot really express what an outstanding job he did. The facts speak for themselves: The 15-year peace agreement with Rosecroft after more than ten years of fighting; the success the company enjoyed, not withstanding vicious competition from West Virginia and Delaware and now Pennsylvania; and the passage of slots legislation after 13 years of effort.

"Never has the Maryland Jockey Club enjoyed such good relations with the Maryland horsemen's association, the Maryland breeders, and the Maryland Racing Commission as they did under Lou's leadership."

Dragone, who will assume his new role with the Maryland Jockey Club on Thursday, said he knows how hard his job will be considering Raffetto's popularity.

"I just have to do the job they hired me to do," he said. "I don't think I can try and compete with Lou Raffetto. I understand how popular Lou is. I would hope people would give me a chance. It's not exactly like I'm a babe in the woods coming to this job."

Dragone's father, Allan Dragone, was the former chairman of the New York Racing Association. Dragone ran Great Lakes Down in Michigan and then Portland Meadows in Oregon for Magna between 2002 and ‘06.

"We need to speak as one voice as an industry," Dragone said. "It's obviously going to be trying to meet with the racing commission and horsemen. We're all trying for the same thing right now. We've got a very big referendum coming up in the fall, and we've all got to try to work together on that. Lou and Joe De Francis and Karin De Francis set a standard. We will try to maintain that."

John Scheinman is a Maryland-based Thoroughbred Times correspondent