Maryland's oldest and largest off-track betting facility will shut down next month, its owners said Tuesday, because it can no longer sustain losses.
The closure of the Cracked Claw restaurant and sports palace in Frederick County on Oct. 9 is the latest blow to the state's ailing racing industry as it struggles to reinvent itself amid declining betting and popularity. The closure leaves three OTB facilities in Maryland.
"It's another hit," said Mike Hopkins, executive director of the Maryland Racing Commission, which regulates the sport.
What remains unclear, Hopkins said, is whether the gamblers who frequented Cracked Claw will continue to bet onhorses in Maryland — either at the state's racetracks, online or through the telephone — or spend their money elsewhere.
The Cracked Claw generated $19.6 million in wagering revenue last year, or 51 percent of all off-track bets placed in the state, according to the latest figures from the Maryland Racing Commission.
Questions remain about the impact of the potential revenue loss on the money-losing Maryland Jockey Club, which operates Laurel Park and Pimlico Race Course in Baltimore, and the state's horse owners. Each receive a slice of the money. The Jockey Club has lost money in each of the past three years.
"I haven't seen any numbers on what it could mean," said Richard Hoffberger, president of the Maryland Thoroughbred Horsemen's Association. Nor does he know of any options for replacing Cracked Craw with another OTB to serve Western Maryland.
The Cracked Claw will close after 35 years as a business and 18 offering off-track betting.
Husband and wife Johnny "Pappy" Poole and B.J. Poole bought the Urbana business in 1989 and renamed it Cracked Claw after a restaurant they had owned and operated in Germantown, which opened in 1976.
"It's pretty devastating for my family," Angel Nusbaum, Poole's daughter and a Cracked Claw manager, said in an interview Tuesday.
Nusbaum attributed her parents' decision to sell the restaurant's land to a developer to several factors, including the recession, the sluggish economic recovery, business debt and the continuing decline of the racing industry.
Wagering at the Cracked Claw has been plummeting for more than the past decade, mirroring an overall decline statewide and across the country. Bettors at Maryland's four OTB facilities wagered $38 million in 2010, according to the most recent figures from the Maryland Racing Commission. That's down from $41.2 million in 2009 and more than $80 million in 1995.
Total betting, including wagers at the harness and thoroughbred tracks, has also fallen precipitously, from $303 million in 2009 to $252 million last year.
In an attempt to bring some stability to the industry, Gov. Martin O'Malley signed legislation this year that would divert millions of dollars of slots revenue to the Jockey Club. In exchange, the group agreed to run a year-round racing schedule next year and 2013.
The owners of the Cracked Claw warned earlier this year that the business would not survive another year without help. They had sought for several years, without success, to persuade the Jockey Club to give them a bigger percentage of the bets made there.
The Jockey Club finally agreed in May, Nusbaum said.
Tom Chuckas, president of the Jockey Club, "did everything possible he could do to help us," she said. "The track's limited in their resources and we understood that."
Chuckas could not be reached for comment Tuesday.
While the deal helped boost revenue, it was too late. The Cracked Claw was too deep in debt, Nusbaum said, while expenses continued to eat into business.
"It was a perfect storm," she said.
So last week, Nusbaum and other managers began telling the 50 to 70 part- and full-time employees that the restaurant was closing.