MTHA makes its case for future of Maryland racing

Wednesday, October 18, 2023

The Maryland Thoroughbred Horsemen’s Association believes a sustainable future for Thoroughbred racing in the state requires a year-round training center to accommodate 1,400 horses and provide suitable housing for employees, a robust and collaborative racing schedule, access to new revenue sources—and probably a new operating model for the industry.

MTHA officials offered that view during a presentation at the Oct. 6 meeting of the Maryland Thoroughbred Racetrack Operating Authority, which must submit a report on the proposed redevelopment of racing facilities to the General Assembly by Dec. 1 of this year. The Maryland Horse Breeders Association, which agrees with the position of the MTHA, also made a presentation on the state of the breeding industry and offered suggestions on how it can be fortified.

Their vision is quite different from that of 1/ST Racing (The Stronach Group), which operates the Maryland Jockey Club. TSG officials Sept. 29 told the MTROA that under the current model in the industry, the operator needs more revenue; the racing schedule must be reduced, perhaps by half; and Maryland and other Mid-Atlantic states must develop a circuit given the ongoing reduction in the number of horses bred. The company’s focus is on Pimlico Race Course and the Preakness; the rebuilt facility as currently proposed could house only 350 horses.

In 2023, the MTHA and MHBA will pay the MJC about $11.4 million to support a year-round racing schedule. The subsidy, as it was called at the Oct. 6 meeting, is part of the extended 10-year agreement that began in 2012. Since that time the two organizations have given the MJC about $92 million, according to the MTHA.

MTHA general counsel Alan Foreman, who was appointed to the MTROA, said a new training center—wherever it would be located—is critical to the future of the Maryland racing and breeding industry. He said stabling is needed for at least 1,400 horses with an eye toward expansion if necessary.

“We need room for growth and need to have the ability to grow,” Foreman said. “We need to make sure we don’t get squeezed (and not have enough space).”

The redevelopment plan, which originally included a total remake of both Laurel Park and Pimlico, will hinge on decisions made by the MTROA and General Assembly. The current extension of the 10-year agreement expires Dec. 31, 2023, and the TSG said negotiations would resume after all parties made their presentations to the MTROA. Those presentations have been completed.

“It’s the constant not knowing what’s going to happen in the future,” MTHA President Tim Keefe told the authority. “We need stability and have to remain competitive. We realize we have to contract but to what number and still be year-round? Is it 130 to 140 racing days? It’s probably not much less than that.”

TSG officials suggested 70 to 80 racing dates, all at Pimlico, which would be largely a ship-in operation.

The 2020 Racing and Community Development Act called for about $375 million in bonds, with seed money provided by a contribution of $5 million a year from the Purse Dedication Account, which is funded by 6% of video lottery terminal revenue at the state’s six casinos. (The horsemen and breeders began paying that amount after the bill became law.) Subsequent studies by state agencies concluded the original amount is nowhere near enough to support the initial objectives of the redevelopment plan for racing.

As for alternative sources of revenue that would require statutory changes, the MTHA and MHBA at the Oct. 6 meeting mentioned Racetrax, a computer-animated Maryland Lottery game that features horse racing with payouts similar Keno. According to Maryland Lottery and Gaming statistics, Racetrax in fiscal 2022-23, which ended in July, attracted $320.5 million in sales and a profit of $68 million.

The MHBA also listed historical horse racing machines similar to those in Kentucky and Virginia, and Internet gaming, which has been proposed in the General Assembly but has not yet progressed. Even though the machines resemble VLTs, historical horse racing is based on the pari-mutuel model. The legislatures in Kentucky and Virginia made adjustment to existing statute to authorize HHR.

The MHBA would like an expanded restricted-race program similar to the one in Pennsylvania, and increased breeder and owner incentives that could be paid for horses’ performances in other states when there is no live racing in Maryland.

The MTROA under the law passed this spring is authorized to pursue new operating models for Maryland racing; a not-for-profit operating model is one of the suggestions.

“You just can’t move this sport to the elites—it will collapse,” Foreman said. “We need an operator that is committed to Maryland racing every day.”

The next meeting of the MTROA, scheduled for Oct. 20, will focus on equine health and welfare.

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