State officials and the horse-racing industry vowed on Tuesday to try to salvage live thoroughbred racing in Maryland next year, though it remains unclear if the various stakeholders can come together to forge a viable plan.
With just five weeks before the 2011 horse-racing season begins, there is no schedule in place.
The industry was put in limbo on Monday when the state racing commission rejected a proposal to cut the racing season at Laurel Park and Pimlico Race Course by two-thirds. The decision also clouded the future of the Preakness Stakes — without a state-sanctioned schedule, industry insiders questioned whether the second leg of racing's Triple Crown could be held. The race is traditionally run on the third Saturday in May.
The tracks' owners could submit a new proposed racing schedule for approval at the next commission meeting later this month. But while officials with minority owner Penn National Gaming, the casino operator, said Tuesday they hope to strike a "constructive solution" to continue live racing at the tracks, majority owner MI Developments, a Canadian real estate company, has been mum.
"This is very complicated," said John Franzone, a longtime racing commission member. "It's a jigsaw puzzle with two thousand pieces."
Various plans for thoroughbred racing season have been floated in recent weeks. And at times, the owners and operators seemed at odds.
At one point, MI Developments Chairman Frank Stronach said he would not cut the racing schedule — a reversal of plans announced by the tracks' operator, the Maryland Jockey Club, days earlier. MI Developments and Penn National own the Jockey Club and the tracks through a joint venture.
Further complicating matters, some commission members as well as horse owners and breeders now contend Penn National does not appear to have standing to own the two tracks and apply for racing dates in Maryland.
In unanimously rejecting the truncated racing schedule at Laurel and Pimlico, the eight-member commission also rejected the joint venture between Penn National and MI Developments. Final approval of their partnership was contingent on the commission's endorsing a viable business plan for the Jockey Club.
"We did not approve Penn National's ownership, so I'm not sure if they should be playing a role at this point," commission Chairman Louis Ulman said Tuesday.
"It's a pretty strange scenario where you have an entity who doesn't want to race, who owns half of the assets, and doesn't have a license," said Richard Hoffberger, the president of the Maryland Thoroughbred Horsemen's Association, referring to Penn National. "That's a pretty big mess."
Those behind the horse-racing industry — the owners, trainers and breeders — have been at odds with the Jockey Club's owners in the past, but their relationship seems to have deteriorated.
MI Developments and Penn National executives contend they cannot continue to lose money at Laurel Park, estimated to be $4 million to $7 million annually. They proposed a 47-day racing schedule next year — 17 days at Laurel and 30 days around the Preakness at Pimlico — as a "stopgap" measure so they could work with the industry to devise a long-term plan for its operations. That was the plan the commission rejected.
Horsemen and breeders said such a short schedule would effectively kill the horse-racing industry. At Monday's racing commission meeting, they accused MI Developments of mismanagement and dysfunction and Penn National of only being interested in potential slot-machine revenue.
The infighting has drawn the attention of state officials — who have repeatedly pledged to save the Preakness, a Maryland tradition, if it came to that. The Preakness has been run since the late 1800s. Its estimated economic impact in Maryland: more than $40 million.
Rick Abbruzzese, a spokesman for Gov. Martin O'Malley, reaffirmed Tuesday the governor's intention to work with "stakeholders until a resolution is found," though he declined to detail what options would be considered.
State Del. Shawn Z. Tarrant, who represents communities surrounding the Pimlico track, said the state should consider seizing the tracks if the Preakness is jeopardized. In 2009, the General Assembly passed a law granting the state that eminent-domain authority in the wake of the bankruptcy of the Jockey Club's then owner, Magna Entertainment Corp.
"Even though we're in a tough budget situation, the Preakness is a revenue generator and showcases Baltimore to the world," Tarrant said. "It might cost a little bit up front, but the money we would generate over a series of years, we would get a nice return on investment."
State Sen. Catherine Pugh, who also represents the communities around the Baltimore track, said the future of the Jockey Club and the Preakness will be on the agenda at the Baltimore City delegation's meeting next week.
"I don't think we're at the end of the rope yet," Pugh said, noting not only the economic importance of the Preakness but the national attention the annual event brings to the city and Maryland.
Tim Rice, managing partner at Louisiana investment firm Rice Voelker LLC, who follows the racing industry, said he can't imagine the Preakness would be lost amid the dispute.
"When it's all said and done, they're going to act in the way of common interest," he said.
Eric Schippers, Penn National's senior vice president for public affairs, said in an email that his company and MI Developments "hope to maintain an open and constructive dialogue with the Racing Commission in the coming days and weeks with a hope to find a constructive resolution for the benefit of all parties."
Some racing boosters would like to see the tracks' owners submit a new plan at the commission's Dec. 21 meeting that would allow the industry to operate on a year-round basis. This year, the racing season lasted a combined 146 days at Laurel and Pimlico.
"We hope that Stronach would honor his commitment to race 146 days in 2011 and Penn Gaming would agree, if they want to have us reconsider their 49 percent ownership," Ulman said.
Stronach supported the latest plan that was submitted to the racing commission, according to MID and Penn National officials.
Schippers maintained Tuesday that Penn National still owns 49 percent of the joint venture, created by a deal that closed in July. Penn National had entered into the venture in anticipation of slots' possibly going to Laurel Park instead of Arundel Mills mall. But voters in Anne Arundel County in November approved a ballot measure allowing a slot-machine casino at the nearby mall.
"We have no intention of exiting the [joint venture] and will be working with our partners to explore all options for the operations of racing in Maryland," Schippers said.
Executives with MI Developments could not be reached for comment Tuesday.
MI Developments could choose to pursue live racing alone but doing so could anger Penn National, unless they reach a compromise on a new plan, said John Franzone, a longtime commission member.
But any new plan would have to have the support of the horsemen to have a chance to succeed, said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen's Association, which has made it clear that the industry needs a schedule similar to this year's to ensure its survival.
"If we're going to maintain a racing community here, the 146-day schedule is about as lean as it gets," Foreman said.
In the meantime, Laurel's last day of racing is Dec. 18.
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