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Maryland horse racing has found stability, but must take steps to thrive

Dale Capuano winced at the sight of the 10 or so people watching the horse race at Laurel Park as he walked from the paddock into the 3,000-seat grandstand. Most were familiar faces.

Out on the track, his filly, Calcutta Cat, reeled from a rough break — the horse next to her veered left sharply coming out of the gate — and finished sixth of eight horses. She was the only Maryland-bred horse in the race. Only 19 of the 80 horses entered in races that day had been foaled in Maryland.

Capuano, a 50-year-old trainer who has spent his entire life at Maryland tracks, leaned against a railing, staring down at tiny, out-of-date televisions in the box seats.

"We've been beat up for so long," he said, "the whole industry, top to bottom, and it's not going to come back right away. We've got to keep building."

A month earlier, relief swept through the barns at Laurel as word spread that Maryland's horse racing industry would continue operating through 2024 thanks to a deal between horse owners and trainers and the Maryland Jockey Club, owner of both the Laurel and Pimlico tracks. The agreement ensures 100 days of racing per year and an unprecedented subsidy of the tracks by the horsemen — between $70 million and $100 million over its 10-year life — but three significant challenges remain: updating the facilities, drawing fans and rebuilding the stock of Maryland-bred horses.

At least there's some stability now. For several Decembers, the hundreds of workers who make a living at Laurel waited and worried that racing would leave the state entirely because of the feud between the horsemen and the Jockey Club. Each year, a last-minute deal kept the racing going for another 12 months.

It took more than a year of intense negotiations mandated by the state for Maryland's thoroughbredtracks and horsemen to agree on a sustainable business plan. Industry leaders predict the deal will move horse racing in the state ahead of neighbors Pennsylvania and Delaware and re-establish the state as one of the best places in the country to breed, train and race thoroughbreds.

"That's all anybody could talk about," Capuano said of those days in December when news of the deal broke. "To know that we could move forward, that we could really think about a future? Imagine that feeling."

Developing a plan

Tom Chuckas works from a quiet office tucked deep in the corner of Laurel Park. The jockey club's president since 2008, he was lauded for pushing to make the 10-year deal happen. He'd long said that Maryland's tracks would not survive without securing casino licenses, and still is not sure how the opening of Baltimore's casino, planned for 2014, and a facility in Prince George's in 2017, might harm his business. But now he has hope.

"It allows us to take a hard look at the facilities and consider how we're going to move forward," he said of the deal. "There's a reason to look forward for the first time in a while."

The Jockey Club must submit its plans for improving the tracks and their facilities to the state by Feb. 1 in order to qualify for improvement funds derived from slots revenue. The state sets aside 1.75 percent of all slots money brought in, or about $8.5 million last year, to help pay for horse track improvements. Under the past two deals, that money had been diverted toward covering track operating expenses.

Chuckas already has publicly committed to building 300 new stalls each at Pimlico and Laurel, but otherwise has not specified what The Stronach Group, the Jockey Club's parent company, plans to do at the tracks. Officials from the Canadian company, which also owns tracks in Florida, California and Oregon, have been evaluating the facilities and reviewing plans.

"We're waiting anxiously, just like everybody else," said Alan Foreman, longtime lawyer for the Maryland Thoroughbred Horseman's Association. "That's going to show us a lot."

While no specific building or renovation plans were included in the 10-year deal, those who negotiated it acknowledge that the stability it brings will make it easier for the Stronach Group's billionaire chairman, Frank Stronach, to decide to reinvest in the tracks.

"I do think it gives him the wherewithal to do something significant," said Bruce Quade, chairman of the Maryland Racing Commission. "I don't blame him for holding off, but I do think now he's invigorated. And this was part of the 10-year deal: If you know you're going to be in good financial shape, you can look to make some changes and try to get ahead."

Stronach's reputation among horsemen is mixed. He has made grand pronouncements about spending to refurbish Maryland's aging tracks in the past, but most of what Stronach has done has been just enough to keep the tracks operating. Not long after buying the tracks in 2002, Stronach said he would spend at least $400 million to rebuild both Pimlico and Laurel as combination slots casinos and race tracks, but that idea went by the wayside when neither secured a slots license.

But the horsemen also understand that Stronach has been reticent to invest given the industry's tenuous state in Maryland. If they're showing faith in him now, it is because he is one of them: Stronach has owned hundreds of horses and operates a robust breeding operation.

"The thing about Stronach is, he's said a lot of things he hasn't followed through on, but he also has 100 horses," said Dickie Small, a Laurel-based trainer who has conditioned Stronach's horses in the past. "So he's addicted like the rest of us. He cares about racing."

Horsemen also say Stronach has spent money on one of the things that matter most: track surfaces.

"They're as good as anywhere and might be the best," said Mike Trombetta, a Maryland native who stables at Laurel, Fair Hill and South Florida. "He has spent money to make sure the horses are healthy and can train all the time."

Stronach has invested heavily in Florida's Gulfstream Park, just north of Miami, and recently announced plans to build grandstands that could host 65,000 people, two hotels and a free-standing casino there. Stronach hopes to race year-round at the facility to draw people to nearby retail developments he owns.

But somebody else owns the casinos in Maryland, and Stronach does not have related businesses near the tracks.

Downsizing and refreshing the tracks is one option. Laurel Park draws large crowds only two days a year, while Pimlico attracts crowds only the week of the Preakness.

Thousands of seats were torn out of Gulfstream Park in the last decade to make for a more intimate viewing experience from restaurants and updated boxes. The proposed new grandstands reflect Stronach's desire to attract the lucrative Breeders Cup.

While awaiting a decision on the long-term future of the tracks, Chuckas has brainstormed ideas for attracting more people. Upgrading the feel of the viewing areas is a priority but would take money. For example, replacing those old televisions would cost around $600,000.

So he has tried to think of creative ways to keep his core audience happy and build a new one. He envisions a future where concerts, wine festivals and bourbon tastings attract a younger crowd to the races for the first time. He has developed programs to educate new fans on reading the racing form and understanding how to bet. And he's shifted about 15 percent of his marketing budget toward social media campaigns.

"We've got to bring people in whenever we can, and we've got to make racing easier to understand and appreciate," he said. "There is no home run, no magic wand."

Encouraging more foals

Capuano once regularly trained 80 horses. That number has dwindled to about 30, as shrinking purses and a bad economy scared off many owners and breeders in Maryland.

But purses at Laurel during the 2012 fall meet averaged more than $240,000, not counting the meet's two biggest dayseach worth more than $1 million. In 2011, purses averaged only about $160,000.

"We're running for more than ever before," Trombetta said. "Now we just need to have the stock to match the demand."

In 1991, more than 1,700 foals were born in Maryland. That number fell all the way to 378 in 2011. That 78 percent drop far outpaced the national decline of 37 percent.

A racing commission task force put in place by Quade has suggested increasing the amount of bonus money available for winning Maryland-bred horses, and is devising a plan now to shift existing funds toward that goal.

"That was the intent of having slots, to put more money into the horse racing industry in Maryland," Quade said. "That doesn't mean the money goes to the people racing in Maryland; it needs to be spread out to everyone who supports the industry. It needs to create jobs and help people make a living in the state."


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