For all the criticism you can throw at racetrack owner Frank Stronach — and there is plenty — at least give him credit for a consistent position on slots. Over the long term he doesn't think Pimlico Race Course and Laurel Park need slot machines to survive. He has said so over the years. He said it again in an interview a few days ago.
"I believe horse racing properly done could be great entertainment and could support itself" without slots at the tracks, he said over the phone.
This time, however, is different. For the first time since he took control of the tracks in 2002, Stronach will be free of partners who disagree with that proposition. There was always somebody with a junior stake in the tracks who was obsessed with slots. Other co-investors hated the whole idea of horse tracks and wanted him to concentrate on the profitable auto parts business that made him rich, not the unprofitable hobby that made him and them a lot poorer.
But by the end of the month, Stronach, 78, will be in sole charge. He'll have nobody telling him he can't throw all his energy and considerable resources into saving the industry he loves. He'll have one excuse fewer for failing to revive Maryland thoroughbred racing. He'll be in Baltimore in July, he said, to talk with horse breeders about a turnaround plan.
"I own the thing — or the [Stronach] family owns it," he said. "So we've got no outside investors. We've got no debt. So I could invest. I would be willing to invest. But we've got to come up with a reasonable solution."
The tracks' red ink is the problem. They've been losing money for years, victims of a self-perpetuating process in which declining betting leads to a lack of investment and thinning racing fields, which cause a decline in betting. Tracks in West Virginia and Delaware with on-site slots, and now table games such as blackjack, have drawn away gamblers as well as horses, thanks to purses fattened by slots.
Maryland tracks will get their own purses fattened by subsidies from off-site slots operations run by other companies, such as Penn National's Hollywood Casino in Perryville. Under legislation passed this year, they'll also receive millions in slots proceeds for badly needed refurbishment.
But Stronach's junior partners at Pimlico and Laurel, at first led by the De Francis family and then Penn National, always had their eye on track-based slots operation, which would have generated profits for them as well as for the races. How Stronach and the De Francises failed to submit a qualified bid for a Laurel Park slots license that was all but offered to them on a platter is a tale that still hasn't been fully told. In any event, no Maryland track has slots or will unless the legislature changes the rules.
Whether purse upgrades and makeover money alone can reverse tracks' fortunes remains to be seen. But Stronach suggests other changes are necessary, and he's making it known that even without partners, even after cashing in large blocks of his stock in Magna International, the automotive supplier, his pockets aren't bottomless.
"I can't solve it alone," he said. "We must sit down with the [horse] owners and come up with a solution. No one can expect that you run a business where you lose of lot of money."
He's talking about eventually reducing the number of racing days while increasing the number of horses per race.
"You've got small fields," he said. "The track is no good unless you've got horses."
This is ironic considering that last year Stronach clashed with Penn National over the racing schedule. Supported by Penn National, the Jockey Club, owner of Pimlico and Laurel, had proposed ending live racing at Laurel and cutting back to 40 days a year at Pimlico. Stronach pushed back, saying he supported a schedule similar to 2010, which included 146 racing days at both tracks. Eventually the 146-day calendar was retained until 2013, supported by the tracks in exchange for the extra state money for capital improvements.
To compete with casinos and state lotteries, Stronach is also talking about multimillion-dollar payoffs for track bettors.
"When you look at the average lottery player, he buys a ticket for a buck and he doesn't want to win $10," Stronach said. "He wants to have a lifetime changed, and we need to think in those terms, too. ... The public gets so many choices on gambling now. I'm saying we need big, jackpot purses."
Where that money would come from is a mystery. So is precisely whom Stronach will talk to when he visits Baltimore.
"I don't think I'm his favorite person on Earth," said Alan Foreman, the lawyer for the Maryland Thoroughbred Horsemen's Association. "I don't think I'm the one he's going to be meeting with."
In an open letter to breeders, regulators and media in February, Stronach said Foreman seemed "to wish to foster the type of confrontational environment that may reward attorneys but doesn't, in my view, advance matters."
But as always, Stronach's expressed intentions are good for horse racing. He's talking about "a win-win situation" with the breeders. He wants to "sit down one more time to come up with solutions."
The fact that this time he doesn't have to negotiate with his own partners even while he's talking to the horsemen should make things less complicated. But it doesn't guarantee success by a long shot.