Rosecroft Raceway to close July 1

Rosecroft Raceway, the bankrupt racetrack in Prince George's County, will close July 1 after running out of money to operate — in yet another setback for the ailing horse racing industry in Maryland.

Rosecroft had been struggling for years as it saw a revolving door of owners, stopped running live racing and then lost the right to broadcast simulcast thoroughbred races. Earlier this year, the state legislature rejected a bill sought by the track to legalize poker and table games there.

Meanwhile, the horse racing industry is eagerly waiting for slot-machine profits to revive a sport declining in popularity and losing gamblers to neighboring states. The slots program has had a rocky start as a large casino proposal in Anne Arundel County got caught up in legal battles and the sole bidder for the Baltimore City parlor was tossed out. The first slots parlor in Cecil County is set to open in September.

With Rosecroft's license set to expire in two weeks, Kelley Rogers, president of Rosecroft owner Cloverleaf Enterprises Inc., said Wednesday that he could not vouch for the track's financial viability before the Maryland Racing Commission. The track has been operating essentially as an off-track betting site for the past two years.

Rogers delivered the news Tuesday in a memo to standardbred horsemen and others. In a phone interview, Rogers said most of the racetrack's 200 employees will finish work on Saturday with a skeletal crew remaining to shut down the operations. Rogers blamed the track's demise on an untenable financial arrangement with the state's larger thoroughbred industry.

"Our long struggle is finally over and we have come to an end," Rogers wrote in the memo, which has been posted on the website of the Cloverleaf Standardbred Owners' Association, the parent of Cloverleaf Enterprises. "Unfortunately, despite all of our best efforts we could not escape the unreasonable demands of the thoroughbred industry and they have succeeded in putting us out of business."

Rosecroft's closure leaves Ocean Downs, which plans to open a small slots operation later this year, as the state's only harness track. Pimlico Race Course, which hosts the Preakness Stakes, and Laurel Park are thoroughbred tracks.

"It's never good news when a racetrack closes when you're in the racetrack business," said John Franzone, a longtime member of the racing commission.

Rosecroft has been mired in a bitter fight with the thoroughbred industry — namely the Maryland Jockey Club, the Maryland Thoroughbred Horsemen's Association and the Maryland Horse Breeders Association — over an agreement that required the track to pay $5.9 million a year to receive simulcast signals for thoroughbred racing. At the time of Rosecroft's Chapter 11 bankruptcy protection filing last June, the racetrack owed $1.8 million.

Alan Foreman, attorney for the Maryland Thoroughbred Horsemen's Association, flatly rejected Rogers' characterization of the arrangement. Foreman said Rosecroft breached the agreement when it stopped making payments. As a result, the racing commission revoked Rosecroft's right to receive thoroughbred racing simulcast signals.

"We made no demands on the harness industry. Zero. ... Their situation is totally self-inflicted," Foreman said. "We would have been happy to work with them had they come to us in the beginning. Here we are. It's sad."

For the standardbred horsemen, breeders and others in the harness industry, the track's closure is a bitter ending for a once-popular venue for live racing. The track's bankruptcy protection will convert to a Chapter 7 liquidation, Rogers said.

Betsy Brown, a standardbred horsewoman, trainer and driver who has lived at Rosecroft and stabled her horses there for 20 years, was preparing Wednesday to move her 10 horses to the fairgrounds in Woodstock, Va.

"We were hoping for a miracle to the end. It just didn't happen," said Brown, who saw her income drop by half when Rosecroft suspended live racing in 2008. "It's really sad. Some of the people don't know where they're going and time is running out."

Rogers said all stable occupants will leave by June 28.

Horse racing and slots have been a political hot button for many years as lawmakers, racing interests and others sought to find ways to revive the industry.

Gov. Martin O'Malley, who used to visit Rosecroft with his father and brother, said there was never any chance slots would have been approved for the Fort Washington racetrack because Prince George's County's elected officials opposed it.

He added that state officials would "do everything we possibly can to help people displaced."

Former Gov. Robert L. Ehrlich Jr., who is seeking to unseat O'Malley in a rematch this November, characterized Rosecroft's closure as the end of an era in Maryland racing and called it a "sobering reminder of state government's failure to design a viable gaming program."

Rosecroft opened in 1949 and has had a history of financial troubles and owners who have come and gone.

The track saw some deals fall apart because prospects for legalized slots in Maryland never materialized until 2007. That year, Penn National Gaming, which owns the Cecil County parlor, dropped its bid to buy Rosecroft when the track was not designated as a site for slot machines. And the family of Peter G. Angelos pulled out of a deal in 2005 when chances for legalizing gambling at tracks dimmed.

Rosecroft wasn't designated a slots site in legislation that legalized such gambling and sent the issue to a November 2008 referendum, which voters approved. Under the program, slots proceeds would be dedicated to horse racing purses and track improvements, but that revenue hasn't yet materialized.

It seemed as though things would turn around for Rosecroft when real estate developer Mark Vogel, a former owner of the harness track, stepped up last year and agreed to buy the financially beleaguered property. But while stockholders of Rosecroft approved the track's sale to Vogel, a Delaware bankruptcy judge rejected the deal.

Vogel said Wednesday that he wanted to keep the track operating, but he said "the real issue is Rosecroft has no revenue source."

"We don't have live racing and thoroughbred turned off the simulcast signals," he said.

For the three months ending March 31, Cloverleaf lost $520,712, according to financial documents submitted to the racing commission. The company reported a net loss of $1.39 million in 2008, the most recent annual financial report submitted to the racing commission. The company also reported losses in 2007 and 2006, according to financial documents.

Earlier this year, the track pushed efforts to allow poker, blackjack and other table games, but the legislation did not gain enough traction in the General Assembly, despite the backing of Senate President Thomas V. Mike Miller.

"We moved heaven and earth to save the Preakness a couple of years ago, which I'm fully supportive of, yet when it comes to saving 200 jobs in the African-American community in Prince George's County, nobody seems to give a damn," Rogers said.

But Vogel is not giving up on the possibility of a state bailout or another last-minute rescue.

"We are hoping that we have political leaders in Maryland who don't want Rosecroft closed and 200 jobs to evaporate," he said. "And what we're looking for is a simulcast agreement."

hanah.cho@baltsun.com

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