The breakup comes as the struggling racing industry works on a long-term plan to secure the future of a sport that has seen attendance and betting decline for at least a decade, especially as neighboring states opened casinos years before Maryland.
The sale also allows Penn National to shift its focus entirely to resuming live racing at Rosecroft Raceway and lobbying the state to allow slots at the Prince George's County harness track.
Penn National opened Hollywood Casino Perryville, Maryland's first slots parlor in more than three decades, in September.
The financial terms of the deal between Penn National and Stronach's Stron-MJC Limited Partnership were not disclosed. The transaction requires approval from the Maryland Racing Commission, which has indicated previously that the Jockey Club would be better off with only one owner.
The Jockey Club's majority owner, MI Developments, is in the process of transferring the company's racing assets to Stronach, the Canadian real estate company's chairman and chief executive. Stronach plans to take the racing operations, including the Jockey Club, private by the end of the month under a deal that also requires Stronach to give up control of MID.
"As we turn the page and begin a new chapter in Maryland racing, we are more committed than ever to do what it takes to return Maryland to its rightful place as one of the top racing and breeding states in the country," Greg Avioli, president and chief executive of the Stronach Group's gambling and racing division, said in a statement.
The dual ownership caused friction last year as the Jockey Club unsuccessfully sought to significantly curtail the live racing season after voters in Anne Arundel County affirmed the Cordish Cos.' plans to build a casino at Arundel Mills. The Jockey Club had hoped to divert the county's sole slots license to Laurel Park.
Some horse owners and breeders accused Penn National of trying to kill Maryland racing to prop up its Charles Town casino and racetrack in West Virginia.
An executive with the Maryland Thoroughbred Horsemen's Association called Penn National's exit a welcome "divorce," especially as the industry works to find solutions to ensure its survival.
"For me, it was impossible to develop a plan with what was a continued, chaotic ownership situation," said Alan Foreman, the group's lawyer.
"Penn came in for one purpose only: to get slots at Laurel. When that failed, everything blew up, and that led to the divorce," he continued. "Penn didn't come here for the love of racing. They didn't make any secret of that."
Penn National bought a 49 percent stake in the Jockey Club a year ago in hopes of securing a slots license at Laurel Park.
Penn National paid $26 million for its stake in the Jockey Club and for a 51 percent interest in any potential gambling rights at Laurel Park. Penn National and MID each also agreed to contribute $6 million to the working capital of the Jockey Club.
Steuart Pittman, president of the Maryland Horse Council, said he was hopeful that single ownership under Stronach would mean more stability and more opportunities for racing.
"From my perspective, he'll focus on how to sell the product of horses and horse racing, as opposed to worrying about how to get a casino," Pittman said.
Brenda Stronach, a Stronach Group representative, said the company is "determined to work with industry and government officials across the state to further develop Maryland's reputation as a premier location for racing."
Meanwhile, Penn National filed an application last month to resume live racing at Rosecroft by the end of the year. Penn National bought the bankrupt Rosecroft for $11 million in February.
Rosecroft is trying to renegotiate an agreement between the racetrack and Maryland's thoroughbred stakeholders to broadcast thoroughbred races at the track. In 2009, Rosecroft stopped paying millions in fees to the Jockey Club, the Maryland Thoroughbred Horsemen's Association and the Maryland Horse Breeders Association, saying the deal was no longer affordable for the money-losing operation.
A new state law that provides slots subsidies to the Jockey Club and Rosecroft requires the parties to agree to a new simulcast deal.
The fact that Penn National will no longer own the Jockey Club eliminates the conflict-of-interest concern in those negotiations, Foreman said.
State law requires the parties to go to arbitration if an agreement is not hammered out by Oct. 1.
In a statement, Penn National's chief executive officer, Peter M. Carlino, said the company remained committed to racing and gambling in Maryland despite its exit from the Jockey Club.
Carlino said the company would "focus [its] resources on further strengthening the racing and operations at Rosecroft."
"We believe that the Maryland Jockey Club, Pimlico and Laurel Park will be well served under the single ownership of the Stronach Group, and we wish them success with these historic racing venues," he said.