Maryland's major thoroughbred racetracks, which may collect $1 million in taxpayer assistance in coming months to market themselves to fans, spent more than twice that much last year on a political ad campaign to legalize slot machines and boost the industry's image.
According to financial documents filed with regulators Monday, the Maryland Jockey Club, corporate parent of Laurel Park and Pimlico Race Course, spent $2.4 million of its $6.7 million promotional and advertising budget in 1998 on politically oriented advertising.
The money was spent on focus groups, research and production of "institutional ads designed to heighten public awareness of Maryland horse racing," Martin Jacobs, treasurer of the jockey club, said in a written statement in response to questions from The Sun. About $500,000 of it was spent on pro-slots ads, an issue in last year's gubernatorial race.
Other than the statement, jockey club officials did not respond to repeated requests for comment on the matter. The money used for the campaign came from the private company's resources, and presumably could have been spent on consumer-oriented advertising.
Maryland Racing Commission Chairman John B. Franzone said that if the tracks had that much money to spend on advertising, they should have used more of it to directly attract new fans, especially young ones, to the sport.
"If we can spend money on that mumbo jumbo, let's take on slots and advertise horse racing. It's a better product," Franzone said.
He said he will be asking the tracks for an accounting of the political spending when the commission reviews the financial reports.
The image campaign came in a year when the tracks, which have long bemoaned a lack of money to promote themselves, won from the General Assembly the right to ask for $1 million in reimbursement for advertising.
The state money has not yet been given to the jockey club, but track officials say they will apply for it.
Disclosure of the price tag for last year's political blitz may diminish the already murky prospects for several bills to aid the racing industry now before the General Assembly -- including a bill to give the tracks another $1 million for ads next year.
"It certainly seems to confirm the governor's worst suspicions," said Ray Feldmann, spokesman for Gov. Parris N. Glendening. "Clearly, siphoning off money on a campaign for slot machines and politics is not what the governor and General Assembly had in mind when it passed funding for marketing assistance to the tracks last year.
Glendening 'very concerned'
"The governor is very concerned about how money has been spent and he wants to see the dollars spent in a way that will genuinely help the industry," Feldmann said.
Feldmann said the governor will definitely not support giving the tracks an additional $1 million this year. Glendening put no money for racing in the budget he submitted to lawmakers this year, but the industry is hoping he will include some assistance in a supplemental budget in the next few weeks.
It may be too late, however, to prevent last year's appropriation of $1 million from being given to the tracks. The jockey club didn't apply for reimbursement for the political ads, and no longer can. But it has until the end of this fiscal year, June 30, to submit a customer-marketing plan for the $1 million.
'I believe tracks still eligible'
The state Department of Labor, Licensing and Regulation, which regulates the racing industry and must approve the marketing subsidy, said it has no choice but to consider that request from the tracks.
"The law says we are to review their plan and reimburse their expenses if the plan meets the criteria of helping the industry. We would certainly look at their plan," said Department of Labor, Licensing and Regulation spokeswoman Karen Napolitano.
Asked by The Sun about the tracks' plans, Jacobs wrote, "I believe the tracks are still eligible for reimbursement for certain marketing expenses, and we presently expect to apply with respect to expenses that are properly reimbursable."
Finishing out of the money
Altogether, the jockey club spent $6.7 million of its own money on advertising and promotion last year, more than double the $3 million it spent the year before, according to financial reports.
As a result of that and other spending, the tracks' combined profits for the year plunged from $1.9 million to $136,547, despite a slight upturn in revenues.
Jacobs said the political ads were intended to "raise awareness and fan interest in racing."
But about 20 percent -- or about $500,000 -- of the $2.4 million went to the "Thank You Maryland" commercials familiar to TV viewers last fall, Jacobs said.
In those ads, actors played residents of Delaware "thanking" Maryland for making people cross the border to play slot machines.
Of the remaining 80 percent, some was used for a series that featured breeders and other industry participants discussing the business. These were designed to convey the importance of the industry to the state.
Although they did not mention Glendening or his opponents, the commercials were run in the heat of the gubernatorial campaign and carried a not-so-subtle message: Maryland should elect a governor who will legalize slot machines, to which Glendening is opposed.
The ads were produced by Bozell/Eskew, a powerhouse Washington firm specializing in political advocacy advertising.
The firm also made the ads used by the tobacco industry over the past two years to successfully fend off anti-cigarette legislation. Principal Carter Eskew is a former campaign consultant for Vice President Al Gore, among others.
De Francis donation
The jockey club's president, Joseph A. De Francis, also contributed hundreds of thousands of dollars to the Republican Party and Glendening opponents in the primary and general election -- part of which was used to purchase anti-Glendening ads.
Glendening, who won the election, is opposed to expanded gaming in the state and says he wants to find another way to help the industry. He recently called for legislation to eliminate the jockey club's statutory monopoly on major thoroughbred racing in the state.
Several bills in the General Assembly to help racing have been held up this legislative session, in part because Glendening says he will not sign anything without a measure to break up the track's monopoly.
For example, a bill that would supplement money for purses, something that has been done in each of the last two years, could be endangered because of Glendening's animosity toward De Francis.
That bill also contains the marketing aid that the governor said he will not support.
Support in jeopardy
Maryland Senate President Thomas V. Mike Miller said the ad campaign financed by the jockey club, and its open support for other candidates, has hurt the chances of any industry support passing this year.
"It was a big mistake. A big mistake," Miller said. De Francis "backed the wrong horse in both the primary and the general election, and he lost both tickets."
Even a bill to provide funds from uncashed pari-mutuel tickets to the Maryland Million breeding program, usually not controversial, could encounter trouble.
New track considered
Speaker Casper R. Taylor Jr. wants the bill amended to permit a new track in Western Maryland. If the authority is broadly written so that the new track gets racing dates now allocated to De Francis and the jockey club, the bill will not pass with its usual ease.
Taylor said yesterday he did not expect trouble for the Maryland Million bill and his new track amendment, but lobbyists for the racing industry said they would be watching carefully to protect the interests of the horsemen, the breeders and De Francis.
Sun staff writer C. Fraser Smith contributed to this article.
Pub Date: 3/19/99