There are 14 bridles hanging on the wall of trainer Greg Wilson's equipment room at Laurel Race Course. But Wilson only has four animals in his care -- three horses and a goat.
Elsewhere at the track, a veterinarian has lost so much business he has had to begin making "farm calls." A shortage of thoroughbreds has forced Laurel to cut a race a day from its program. And in Frederick County, a horseman who used to break -- or train for riding -- nearly 20 horses a year, is now driving a school bus part-time to make ends meet.
Maryland's 250-year-old horse industry is slogging through a nation-wide, equine depression. Breeders and owners are going out of business or cutting operations at alarming rates. Fewer fans are betting less money on fewer horses at Laurel and Pimlico. And supporting services, from veterinarians to feed suppliers, are hurting.
A precise estimate of the industry's impact in Maryland is difficult to come by, but most estimates suggest that $1 billion changes hands because of it every year.
A few years ago, state reports estimated nearly 20,000 people were employed in the thoroughbred business directly or indirectly, although this included part-timers and anyone who owned or invested in a horse. Direct employment is probably much less.
But racing has been a part of Maryland's culture for centuries, and its troubles strike a harsh chord across the state. The Maryland Jockey Club is the oldest racing organization in the United States. The nation's first organized thoroughbred race was held at Annapolis in 1745, and Baltimore's Pimlico is its second-oldest track.
Maryland horse racing underwent an unprecedented renaissance over the past decade, and was even dubbed "The Maryland Miracle" within the industry. The good times peaked in 1990, with record betting and attendance at the state's tracks. The thoroughbred crop that was born in 1987 and raced as 3-year-olds in 1990 represented the largest number of horses ever bred in the state.
But times have changed.
"We find we have to watch who we extend credit to, and even monitor the accounts of our good-paying clients," said Bob Vallance, partner in Yergey, Stewart and Vallance, the veterinary practice that takes care of the largest number of horses at Maryland tracks.
The business "just dried up" at the tracks at the end of last year, forcing his firm to make farm calls, he said.
David Butts, a Frederick County horseman, once broke as many as 12 to 18 yearlings, or 1-year-olds, each fall. He broke only half that number this year, and supplements his income by substitute teaching,driving a school bus and doing horse dentistry.
Mr. Wilson, the trainer, has equipment for 40 horses. But without investors willing to buy and race horses, he, like other trainers, is left with little business. A few years ago Mr. Wilson, 41, was at the height of his career, with 20 stakes winners to his credit.
Hal C. B. Clagett, a legendary Maryland horse breeder and past president of the Maryland Horse Breeders Association, has cut way back. Last year, he sent 15 2-year-olds to his trainer at Bowie. This year it will be four.
Even King Leatherbury, the winningest trainer in the state, has felt the economic pinch. "So far, I haven't laid off anybody," Mr. Leatherbury said. "But I'm bringing in horses now that I wouldn't have brought in before, horses with a one-in-10 chance of getting to the races. I'm just trying to keep my stalls filled.
Slowdown at the track
When the late Frank De Francis and his partners, Bob and Tom Manfuso, purchased moribund Laurel and Pimlico in the mid-1980s, Mr. De Francis inspired the state legislature to give the tracks a hefty tax break, Sunday racing and intertrack wagering.
Mr. De Francis, and his high-profile associate, Lynda O'Dea, built glitzy "sports palaces" with handicapping computers and a casino-like atmosphere. Attendance and betting figures soared.
Between 1985 and 1990, annual attendance at Laurel and Pimlico increased 50 percent, four times the growth rate of 12 percent for all tracks in United States. The amount bet -- called the handle -- increased 65 percent at the two Maryland tracks, three times the national growth rate of 21 percent during the period.
No more. Last year, the handle was down 7 percent and attendance was off by more than 6 percent at the Maryland tracks. And because of heavy borrowing, the interest payments have eaten operating profits and left the tracks in the red.
Pimlico and Laurel are expected to show losses for 1991 on top of more than $1 million in red ink during the previous two years. In November, 40 employees were laid off, leaving the tracks and associated training center at Bowie with 875 employees.
An average of eight fewer horses compete each day at a Maryland track than they did a year ago. The number of horses competing has fallen so far that only 1,700 of the 2,800 stalls are occupied at Pimlico, Laurel and Bowie -- leading some horsemen to worry that Pimlico's barns will be torn down and horses will have to be trucked in from Laurel.
Track owner Joe De Francis said he has "no definitive plans" to tear down barns at Pimlico. But, he said, "Obviously with 1,700 horses and 2,800 stalls, we can't permit that sort of situation."
The state, facing its own fiscal troubles, has cut 16 track jobs, including 10 satchel men who collect equine urine samples for drug tests. Fewer satchel men mean fewer horses are being tested for illegal drugs.
Harness racing has its own troubles. Last year, Rosecroft Raceway in Prince George's County and Delmarva Downs near Ocean City were sold after owner Mark Vogel declared bankruptcy.
Fans say the tracks had deteriorated badly, but the new owner, Los Angeles businessman Frederick Weisman, has vowed to make sweeping improvements.
Comprehensive national statistics are not yet available for 1991, but experts say tracks nationwide have been hurt by the recession.
"It wasn't a good year for racing. The recession has affected virtually everything in the leisure industry," said Eugene Christiansen, with Christiansen & Cummings, a sports consulting firm in New York and Boston.
Old ideas that recessions may actually help gambling industries were dispelled by this economic downturn, Christiansen said. As people have lost income, they have gambled less, he said.
"Even racetracks that have historically been very strong have felt the impact," he said.
Regular fans and horsemen are still betting the races. "But it's the casual fan that we're missing," said Jim Mango, general manager at Laurel and Pimlico.
The troubles have contributed to a bitter dispute among the owners of the track.
Part-owner Bob Manfuso, who retired from active management over a year ago, has publicly criticized his partner, Joe De Francis. Mr. De Francis took over management after his father, Frank, died in August 1989.
"I'm tired of everything being blamed on the recession," Mr. Manfuso said.
Mr. Manfuso and other critics blame inept management, lack of innovative marketing and cutbacks in customer services.
Mr. De Francis defends his management style, saying that marketing budgets have varied only slightly, from $5.7 million in 1989 and $5.9 million in 1990 to $5.5 million in 1991.
"As for the layoffs, any management team that doesn't cut costs and operate efficiently during a recession is just plain foolish," he said.
Farms hard hit
The picturesque breeding farms that supply the tracks and depend on their success are in the second year of a spiral of foreclosures, fire sales and liquidations.
Horse prices, which zig and zag like oil futures, have collapsed, taking down profits and livelihoods with them.
Sagamore Farm near Hunt Valley was once Maryland's signature thoroughbred establishment. The farm -- former home of the great Native Dancer -- shut down last summer.
Windfields Farm in Chesapeake City closed in 1988. Polinger Farm in Montgomery County is becoming a golf course. Sunset Hill, the Jerold C. Hoffberger farm in Howard County, was auctioned off last month.
Other large stud farms, such as Summer Wind in Frederick County and Thornmar in Kent County, have been advertised for sale. Owners of Merryland Farm in Baltimore County also have talked with potential buyers.
There are probably fewer than a dozen farms in the state that could be called major commercial breeding centers that stand stallions.
"The sad thing is that I don't see any new farms starting up," said Joseph P. Pons Jr., whose Country Life Farm in Bel Air has been family-owned since 1933.
Last year, Kentucky's Calumet Farms, an industry icon, declared bankruptcy.
Statistics compiled by the Jockey Club, the sport's governing body, show that nationally the number of thoroughbreds born has decreased every year since 1986, when a record 51,293 were registered.
The size of the crop has decreased 22 percent, and in 1992 the total is expected to be about 40,000 foals -- a lower figure than 10 years ago.
Maryland follows the same trend. A record 2,076 Maryland-bred foals were registered in 1987, but declined about 20 percent to 1,639 foals in 1990. The state has fallen from eighth to ninth place in horse breeding.
And the number of horses claimed, or purchased at the track while competing, has fallen 38 percent in two years in Maryland, indicating a serious slump in horse sales and investment.
In 1989, 1,066 horses were claimed for more than $12 million. Last year, the figure was 662 horses for a total of $7.2 million.
Tax law changes hurt
Several events sent the horse industry into its current free fall, according to experts. For breeders, the 1986 overhaul of the federal tax code was catastrophic. It eliminated loopholes for horse owners at just about the time that the bull market for horses had run out of energy.
The result was a virtual price collapse not unlike a stock market crash.
"We were in an oversupply position in 1985. Like every other market, the pendulum had swung too far," said Dr. Malcolm Commer, an agricultural economist and equine specialist at the University of Maryland's Wye Research and Education Center.
The Tax Reform Act contained passive loss provisions that eliminated limited partnerships in the ownership of racehorses and also decreased capital gains deductions derived from the sale of horses. At one time before the changes, up to 70 percent of business losses could be deducted against individual income.
"What we are seeing is the negative impact of the [federal] Tax Reform Act of 1986, compounded by the current recession," said Richards Rolapp, president of the American Horse Council.
Some of President Bush's tax proposals, such as the capital gains taxcut, would help the industry but not restore what was lost in 1986.
"What we're going to see is four owners owning one horse instead of one owner owning four horses," said Francis Campitelli, a leading trainer.
The same phenomenon was going on across the country, Dr. Commer said.
"Ultimately that's going to make for a stronger horse industry. But it has caused a lot of injury for a lot of people," Dr. Commer said.
He predicts that the bottom has been reached and a modest rebound could come this year, although the industry may never return to the levels of its boom years.
The survivors will be the businesses that did not expand too quickly or take on too much debt, as Calumet did, he said. Maryland's breeders benefit from several incentive programs that set aside a portion of betting pools for horses bred in the state, which has helped eased the pain for them.
Relief may be a bit longer in coming to tracks, however, Dr. Commer said.
Horses generally start racing at age 2, so resupplying the tracks will take a few years, and prices are still too low to lure many investors back. And a shortage of horses cuts into betting and attendance revenues.
"It's an entertainment business and that's where the ultimate dollar comes from," Dr. Commer said. "When the racing industry is healthy, then the breeding industry is going to be healthy."
For now, breeders are still caught in a squeeze between high operating costs and low horse prices -- rendering many farms unprofitable."The economics are stacked against you," said Dr. Commer, who also owns a few horses.
Although a turnaround may not be imminent, there are hopeful signs for racing in the long run, said Mike Nolan, a racing expert with the University of Louisville.
The business has expanded through such things as off-track betting and intertrack wagering. Maryland's tracks conduct intertrack wagering, where fans at Pimlico can bet on races at Laurel and vice versa. A bill before the General Assembly is expected to legalize off-track betting this year.
At the same time, more states are considering building tracks, something that could eventually increase the demand for horses. During the 1980s, a dozen states legalized wagering on thoroughbred racing, bringing to 43 the number with horse gambling. Some of those states tried and failed to establish tracks.
Industry members and observers hope that further off-track betting, national intertrack wagering, the establishment of regional racing circuits and other advances might help put racing back on its feet.
And even in the current climate, some owners and breeders continue to take the risk.
Allen and Audrey Murray recently invested $200,000 for a new stallion barn and breeding shed at their Harford County farm.
"I guess you could call us the crazy ones," Audrey Murray said. "There is still money to be made. What it comes down to is still the premise that has always driven this business: getting lucky, and coming up with the right horse."