When the governor and the legislature saved Maryland horse racing again this past spring, everybody knew it wouldn't be for the last time. But the deal was supposed to buy a few years, if not crowds at the tracks.
It didn't even do that. Frank Stronach, the aging Canadian tycoon who owns the Maryland Jockey Club, is threatening to slash the racing schedule unless he gets concessions.
For the crisis to be resolved, policymakers and horse breeders will need to understand what Stronach wants. Also, Frank Stronach needs to understand what Stronach wants. At the same time, Stronach will have to keep his word.
Betting on any one of those things is a long shot. Box them into a trifecta, and you get an idea of the odds facing Maryland's thoroughbred racing.
"The Jockey Club supports the governor's bill," club President Tom Chuckas told the Maryland House Ways and Means Committee on March 15. "It's a backup plan that gives us the time we need from the Maryland Jockey Club's perspective and the industry's perspective to determine what the future holds for Maryland racing in the face of new realities."
The first thing the future held was Stronach and the Jockey Club changing their tune.
The plan that the club supported gave its tracks — Laurel Park and Pimlico Race Course — millions in extra slot-machine proceeds in exchange for running a full racing schedule.
Under previous legislation, the tracks are already due millions in slots dough earmarked for winners' purses. The new deal diverts up to $6 million a year more in slots money that had been intended to pay for racetrack buildings and other capital upgrades. The legislature agreed to let the money be used for operating expenses — for three years — after the Jockey Club complained it couldn't afford to run 146 racing days.
Neither Chuckas nor Stronach seems to have placed his hand on a Daily Racing Form and sworn to run 146 days every year through 2013. But that is what everybody — Gov. Martin O'Malley, legislators and horse breeders — expected.
The bailout was supposed to help Stronach pay his employees and utility bills, and break even for a few years. If there was some problem with that idea, you never heard about it from him or anybody else at the Jockey Club while it was being considered.
But now he's proposing to run only 40 days of live racing at Pimlico next year and to dump the expense, risk and hassle of racing at Laurel on the Maryland Thoroughbred Horsemen's Association. (Under law, however, the Jockey Club doesn't get the extra $6 million next year unless it races the full 146 days.)
"I said, 'I'll lease you Laurel for $1 a year so you can race as much as you want to,'" Stronach said on the phone last week about his conversation with the horsemen. "But they don't want to do that. They said, 'We'd lose money.' So I said, 'So it's OK if I lose money?'"
His new, lease-Laurel plan not only monkey-wrenches the idea of a stable racing schedule, it jumps the gun on what was supposed to be a multiparty effort to craft a long-term plan. By unilaterally proposing to guarantee only 40 days of racing next year, Stronach has re-created the crisis that required the bailout.
"Everybody intended that we would not be going through Groundhog Day again this year," says Joseph Bryce, O'Malley's top legislative aide. The deal that the Jockey Club supported, he says, "was structured in such a way to provide some certainty while at the same time providing some time — but not too much time — for the industry to collectively focus on a long-term plan."
What's head-spinning isn't just that Stronach went off-script. He's done that before. This time he changed characters, supporting the kind of abbreviated racing calendar that he opposed a year ago. Follow closely, because there are more twists and switchbacks here than in a Mitt Romney position paper.
Last year, pushed by co-owner Penn National Gaming, the Jockey Club publicly threatened to end live racing at Laurel and run only 40 days at Pimlico. Who swoops in as the savior but Stronach? "The main thing is that we keep the tracks open and more or less run reasonably the same days that we ran the last two years," is what he told me at the time.
It was remarkable because he was contradicting everything his employees at the Jockey Club had been saying. This time, however, he's contradicting himself. What about the three-year rescue deal that your Jockey Club supported and the legislature passed this spring? I asked Stronach last week.
"That was only for one year," he said. "For year '11. We said we'd do it until the end of '11. And we're still losing money."
Penn National is out of the picture, having sold its minority Jockey Club interest back to Stronach. So you can't blame it for being the heavy. Instead, Stronach is playing both good and bad cop, apparently at random.
"Now you see the problem that we have" with the horse industry, says Del. Frank Turner, a Howard County Democrat on the Ways and Means Committee who voted for the bailout. "It's always shifting, and it's always moving."
Stronach was in town last week, talking to policymakers and trying to work out a deal. But there already was a deal.