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Slots Money Could Fund Racetrack Improvements

After at least a decade of gloomy news for Maryland’s horse-racing industry, there is light at the end of the tunnel. The incandescent glow of the state’s thousands of slot machines is providing that light.

For years, Maryland racing interests pleaded for slots as a source of revenue to help their beleaguered sport. Although there is no casino at a racetrack, as many had envisioned when discussion of gaming began, the 7 percent of gambling revenues dedicated to horse-racing purses and the additional 2 percent set aside in racetrack facility renewal accounts are having an impact.

For 2012, the Maryland Jockey Club — which operates the state’s two thoroughbred tracks, Pimlico Race Course and Laurel Park, as well as the Preakness Stakes — reported a 7.5 percent increase in average daily wagering. The total average daily handle jumped to $2.44 million, which includes simulcasting. Just as encouraging was that the live daily handle increased 6 percent, to $186,700.

“I attribute the boost to increased purses,” Maryland Jockey Club president Tom Chuckas said in a statement when the numbers were released in January, “as we are running for $250,000 per day [in purses], which is up $90,000; improved field sizes; and more aggressive marketing.”

Then, earlier this month, the MJC announced a proposal for $30.3 million in improvements split between Laurel and Pimlico. In the process, the Bowie training facility would be shut down and those year-round activities moved to Pimlico.

The proposal is preliminary and requires approval from the Maryland Racing Commission, and the improvements would be limited to badly needed track infrastructure, such as barns and stalls; grooms quarters; a staff canteen; sewage and storm lines; a gatehouse; a security fence; and more. The list is long, and perhaps from a track patron’s point of view, not terribly exciting. But from the horsemen’s point of view, the improvements are desperately overdue.

The infrastructure renovations may be just the beginning. During a recent conference call, Chuckas discussed longer-range plans that would directly affect the customer experience, including a new clubhouse at a rearranged Laurel and substantial patron-focused improvements to the clubhouse and grandstand buildings at Pimlico.

At Laurel, where the vast majority of the MJC’s 145 live-racing days were held in 2012, the changes that could occur in a few years are expected to approximate what the Stronach organization, which controls the Jockey Club, accomplished at its Gulfstream Park in Florida with retail complementing the racetrack and casino there.

And then there’s the historic, but ragged Pimlico Race Course.

“Something has to be done with Pimlico,” Chuckas said during the conference call, addressing the track-improvement proposal.

He wasn’t specific about what may be in the offing, saying there would need to be a detailed study. Chuckas said the MJC’s plans for Pimlico should be stated emphatically when they are announced, and he noted that the MJC wanted to follow through on any proposed plans. Luxury boxes, sky suites and a new dining room may all be on the wish list.

Chuckas conceded the obvious, that when Pimlico, the home of the Preakness, is compared with the Kentucky Derby’s home at Churchill Downs and other first-class sports facilities, Old Hilltop doesn’t measure up.

Casino money could change that.

So far, the state’s still-emerging casino industry has generated more than $42 million for race purses and nearly $14 million for racetrack renewal. Yet to come are live table games, which will add to revenues at the three gambling halls in operation; major casinos in Baltimore in 2014 and Prince George’s County a few years later; and, more imminently, a small casino at Rocky Gap. It’s estimated that casinos will generate $112 million during 16 years in the racetrack facility renewal accounts — and that could be a conservative guess.

In entertaining improvements at Laurel and Pimlico, the MJC can count on a substantial contribution from the casino-funded facility renewal accounts. Money from that account is matched in a grant dollar for dollar with whatever the track owner spends. So far, some of that money has been spent on track operations.

Of course, casinos were a hotly debated issue in Maryland before voters said yes in 2008, and they were again when live table games and the sixth casino in Prince George’s County were approved as part of a November 2012 referendum. Had antigambling sentiment prevailed and casinos not come to Maryland, there would not be any talk of fixing up Laurel and Pimlico. To the contrary, the discussion would be about the certain demise of horse racing in the state.

“[Without casino money], we would have a much more modest approach in purses, horses and capital expenditure,” Chuckas said.

Issue 182: February 2013

Contact Information

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Jessica Hackett
Director of Communications
Telephone: 410-841-5888