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Penn National backs plan to close Laurel, cut racing in Maryland

Penn National Gaming Inc. affirmed its support on Tuesday of a Maryland Jockey Club plan to end live thoroughbred racing at Laurel Park and hold only a limited meet at Pimlico Race Course in 2011.

“From a business perspective, again, these are losing operations that will continue to be in decline without some alternative revenue stream or these types of steep cuts,” said D. Eric Schippers, a Penn National spokesman.

The company’s position made public rifts that have developed in the corporate family that runs thoroughbred racing in Maryland.

Last week, following an unsuccessful referendum campaign to derail development of a casino at the Arundel Mills shopping mall, Jockey Club President Tom Chuckas said the long-threatened cuts to operations would become reality next year.

Live racing would end at Laurel, which would be operated as a simulcast facility, the training facility in Bowie would close and the club would hold only a 40-day meet around the Preakness in 2011 at Pimlico, Chuckas said.

On Monday, Frank Stronach, chairman of Ontario-based MI Developments Inc., told The Baltimore Sun that he will push for a race calendar in 2011 similar to the 146 days of live racing in 2010.

MID and Penn National entered into a joint venture to run the Jockey Club in May. MID owns 51 percent of the racing operations and controls three seats on the five-member board, while Penn National controls 49 percent and the remaining two seats. But, major racing decisions require the approval of all five board members.

“We were surprised by Mr. Stronach’s comments and stand by Mr. Chuckas’ stated position on the issue, and look forward to discussing it with our partners,” Schippers said, adding that MID had signed off on the plan that was later outlined by Chuckas.

Chuckas has said Laurel Park loses $4 million to $7 million ever year.

Stronach and MID Vice Chairman and CEO Dennis Mills could not be reached for comment Monday evening and Tuesday.

Schippers said Penn National will meet with MID and Jockey Club officials as soon as all parties can set a date. The Maryland Racing Commission would have to approve the club’s racing plans for 2011, and commissioners expect to see a proposal before their Nov. 29 meeting. The racing days in 2011 must be approved by Dec. 1.

Stronach’s comments had given those in the industry and state officials hope that the future of racing is not as bleak as the plan laid out by the Jockey Club.

Racing commission Chairman Lou Ulman called it “terrific news” Monday night, and Shaun Adamec, spokesman for Gov. Martin O’Malley, said “anything that protects the jobs of those race tracks is a good thing.”

That hope was replaced with uncertainty Tuesday.

“We need to find out what their plan is,” Ulman said. “Is it what Mr. Stronach told the public [Monday]? Or is it what Penn National is telling people [Tuesday]?”

The disagreement over the state’s thoroughbred tracks is rooted in the defeat of the Anne Arundel County referendum on Nov. 2. The Jockey Club and its corporate parents had hoped to derail developer David Cordish’s plans for the mall-side casino, eventually win the county gaming license and build a slots parlor at Laurel Park.

Richard Hoffberger, president of the Maryland Thoroughbred Horsemen’s Association, said he and Stronach hope to keep the tracks running in 2011 while working out an arrangement to make them viable over the long-term.

Hoffberger said he ran into Stronach in Kentucky over the weekend and it was there that Stronach first voiced his displeasure with the Jockey Club’s plan.

“What Frank said is ‘Let’s take some time and figure out what changes we can make,’” Hoffberger said. “He said ‘Richard, if you’re willing to work with me, I’ll run the racetracks next year.’”

But Schippers said Penn National remains convinced the slots revenue dedicated to the racing industry — 7 percent of revenue goes to bolster purses and 2.5 percent will be available to match investments in facility improvements — is not enough for racing to maintain its year-round schedule split between the two tracks.

“We think the cuts are unfortunate but have to be made, and because of the outcome on Election Day are warranted,” Schippers said.

“Ultimately we want to continue to explore our options as to what’s next for these assets,” he said. “We’re a company with a rich history in racing and we want racing to be successful.”

Schippers said Penn National will meet with MID and Jockey Club officials as soon as all parties can set a date.

“Ultimately we want to continue to explore our options as to what’s next for these assets,” he said. “We’re a company with a rich history in racing and we want racing to be successful.”

2 comments

  1. Does anyone in MD, except for people making money off of racetracks, really care about horse racing? Let’s let it die a quick and quiet death and move on. If we were going to save something, why not Beth Steel or GM? No one cares about horse tracks anymore.

  2. Jim,your a moron who doesn’t have a clue about the industry which provides more tax income and jobs for the state than both beth steel and gm combined.