The Maryland Racing Commission sent the corporate giants that control thoroughbred racing in the state back to the drawing board again Tuesday night, heaping more doubt upon the future of the racing industry — and the Preakness Stakes.
It was the second time in less than a month that the Maryland Jockey Club was denied its request for an abbreviated racing calendar in 2011. The state horsemen’s associations supported the move.
Because the club is not licensed to race next year at Laurel Park and Pimlico Race Course, the Preakness, long the lone bright spot in for the Maryland racing, appeared Tuesday to be in jeopardy.
“We are deeply disappointed by the decision of the commission to end live racing next year, and the Preakness, and send our employees home on Dec. 31 at the stroke of midnight,” said D. Eric Schippers, a spokesman for Penn National Gaming Inc., which co-owns the jockey club with MI Developments Inc.
“Today’s events have put the Preakness in jeopardy. There’s no question about that,” said Alan Foreman, attorney for the Maryland Thoroughbred Horsemen’s Association.
On Nov. 29, the commission rejected the jockey club’s plan for 47 racing days next year and since then, the future of the tracks has been a high-profile issue in the state. Representatives from MID and Penn National have met with racing industry officials and members of Gov. Martin O’Malley’s staff to try to hammer out a deal. And both Penn National Chairman and CEO Peter M. Carlino and MID Chairman Frank Stronach came to Tuesday’s meeting to plead their cases.
The commission left the door open for the jockey club to submit another proposal for racing in 2011. But Tuesday’s meeting exposed deep divides between the owners of the club as well as the growing sentiment among members of the state’s horse industry that both MID and Penn National need to go.
That view was shared publicly by at least three racing commissioners Tuesday.
“I think all of us have suffered long enough with the mismanagement of the tracks under [MID] over the last 10 years,” said Commissioner David Hayden. “Long term, for the betterment of Maryland racing, we need new ownership.”
Chairman Louis J. Ulman, who did not say the tracks need new ownership, said the state needs a year-round racing calendar, regardless if “this current owner changes its mind, or there’s a new owner.”
Both MID and Penn National have been steadfast in their assertions the club is not for sale. Many in attendance on Tuesday, however, said the state should exercise its eminent domain rights over Laurel, Pimlico and the Preakness and find a new owner that will keep them running.
Gov. Martin O’Malley, who would have to pull the trigger on such a deal, said in a written statement that Tuesday’s result was “disappointing.”
“We are prepared to aggressively protect the State’s interests, as we did two years ago when presented with the threat of losing Maryland’s treasured Preakness Stakes,” he said, referring to the enactment of eminent domain legislation.
“I would encourage the track owners, industry representatives, and horsemen and breeders to return to the table and reach an agreement that protects the jobs that depend on our rich history of racing in Maryland,” he said. “We will continue to explore the legal options available to us.”
Further negotiations would have to bridge the gulfs that appeared to have opened up as a result of the discussions leading up to Tuesday’s meeting.
Commissioner John P. McDaniel told one Penn National executive that he “antagonized everyone in this state and you’re continuing your arrogant ways.”
And not only did the horsemen’s association blame the jockey club’s owners for the breakdown in negotiations, but Penn National and MID appeared to be at odds as well.
The club presented a plan that included 146 racing days in 2011 — the same number it raced in 2010 — but included an option for the club to end live racing on May 31 if it continued to operate in the red and legislative changes, like a reallocation of slots revenue, were not achieved.
MID’s Stronach said the plan would “give us a few months” to work out a viable way to run the tracks, by cutting costs, bringing in more visitors and reworking state aid to horse racing.
But Penn National’s Carlino said his company supported running only a short racing calendar in the absence of slots revenue to bolster the track’s operating budgets.
“We’re not going to jump off a bridge and commit some sort of minor financial suicide,” Carlino said. “We’re a public company. We can’t do that.”
The club’s plan also included a $1.7 million subsidy from the horsemen’s association.
Foreman, the attorney, said the association would have paid, if not for the guarantees of legislative victories and profitability the jockey club wanted.
“They’re holding everyone else hostage so they can get what they want, which is the Preakness,” he said.
Foreman said the association’s board voted Tuesday morning to withhold simulcasting rights next year if there is not an acceptable agreement in place. Under federal and state law, the association can cut off the signal of outside races coming into Maryland’s tracks, as well as the signal that carries Maryland races to other tracks.
Without simulcasting, Schippers said, the Preakness would be “a non-starter.”