NEWS

MJC to race 146 dates in 2011

Posted: Wednesday, December 22, 2010 12:15 PM

by John Scheinman

In an 11th-hour rescue of the Maryland Thoroughbred industry, Gov. Martin O’Malley orchestrated a deal Wednesday morning to save the state’s racing program and the Preakness Stakes (G1) for 2011.

One day after the Maryland Racing Commission unanimously rejected a highly conditioned proposal by MI Developments Inc. and Penn National Gaming Inc. for racing at Laurel Park and Pimlico Race Course next year, O’Malley and his Chief Legislative Officer, Joseph Bryce, convened a meeting in Annapolis to salvage the sport and thousands of jobs that were threatened by a potential December 31 shutdown.

The core of the agreement calls for the state, through the Maryland Economic Development Corp. (MEDCO) to advance between $3.5-million and $4-million dollars to the track owners for operations in the upcoming year in exchange for guaranteeing a full schedule of 146 days of live racing. The deal also includes a $1.7-million contribution from the Maryland Thoroughbred Horsemen’s Association to the tracks and its promise to permit the export of the Maryland simulcast signal throughout the year.

The deal was approved by a 5-0 vote at a hastily arranged meeting of the Maryland Racing Commission late in the afternoon at Laurel.

One day after a grueling four-hour meeting of the commission that featured a broad range of commission members, breeders, and horsemen harshly denouncing the track owners, the groups reconvened in cordial accord over the new agreement.

Maryland Jockey Club President Tom Chuckas, absent the officers of MI Developments and Penn National who appeared the prior day, invited Alan Foreman, the general counsel to the Maryland Thoroughbred Horseman’s Association, and Tom Bowman, president of the Maryland Horse Breeders Association, to join him at the table before the commission to present the new proposal.

“At the end of the day, through all this misinformation and disputes, we all care about racing,” Chuckas said earlier at a news conference in the Laurel winner’s circle. “We came together this morning and realized the fate of an entire industry was in jeopardy.”

Had a deal not been reached, Ontario-based MI Developments and Pennsylvania-based Penn National Gaming could have shuttered Laurel and the Bowie Training Center on December 31 when the 2010 operating license expired and possibly evicted  300-plus backstretch workers and 1,541 horses living on the grounds. The jobs of thousands of industry workers, as well, were at stake.

“It’s absolutely a one-year fix,” Shaun Adamec, the governor’s press secretary, said of the agreement. “I was in the room when this [deal] was struck and it was understood these partners would come together throughout the year and work out a long-term solution. The governor doesn’t want to be doing this every Christmas.”

With a deal in place, Laurel will now open for its winter meet, as scheduled, on January 1 and run a 49-day live meet through March 31. It will be followed by the Pimlico spring meet—featuring the Preakness—which will have 29 live days of racing. After a summer break, Laurel will then conduct 68 days of live racing from August 1 through the end of the year.

Racing Secretary Georganne Hale said a condition book had been prepared but not yet mailed out “because the printer shut down for Christmas vacation. So, I’m sending it out on e-mail, and it’s on the website.”

Adamec called the subsidization of daily operations by MEDCO a “repurposing” of slots revenue currently being directed toward the Racetrack Facility Renewal Account. State law designates that fund, which accrued $421,973 from September through November, for capital improvements at racetracks.

Adamec said the repayment to MEDCO, which was created by the state to assist economic development, would be made through the fund with legislative approval via the Budget Reconciliation and Financing Act.

“These types of revenue actions are pretty common,” Adamec said. “They have happened every year. We wouldn’t do this without legislative leaders. In our view, it’s not a risk at all. It’s basically like a supplemental to the budget.”

In exchange for the funding, the MI Developments-Penn National Gaming partnership dropped its demands for the right to raise the takeout on wagers, control state simulcasting, and increase their share of the purse structure as well as its immediate plans to lobby the state legislature to close Bowie Training Center.

“When the governor’s office stepped up last night and called us in the wake of the decision and said they thought they had a compromise, we were all ears,” said Eric Schippers, vice president of public affairs for Penn National. “The element important to us was solvency.”

MI Developments and Penn National Gaming contend that Maryland tracks lose a combined $7-million a year.

To read a complete account of Tuesday's meeting, click here.

John Scheinman is a correspondent based in Washington, D.C.