ANNAPOLIS — The Maryland Jockey Club pressed lawmakers on Tuesday to subsidize its operations through at least 2014 after releasing financial data that shows both of the state’s thoroughbred tracks lost money in 2008 and 2009.
“The entire operation is a concern,” club President and COO Tom Chuckas said before his testimony in the House Ways and Means Committee.
Pimlico Race Course and Laurel Park lost a total of $14.1 million in 2009 and about $12 million in 2008, according to unaudited financial statements released by the club. State assistance, supporters said, would help stabilize the industry as it searches for a long-term, sustainable model, and the ownership of the thoroughbred tracks is sorted out.
MI Developments Inc. owns 51 percent of the club while Penn National Gaming Inc. owns the rest. MID Chairman Frank Stronach has announced a bid to take that company’s share of the tracks private, and has a “verbal agreement” to buy out Penn National’s share as well, Chuckas said.
He said both deals could close this summer.
The financial reports show the tracks are worse off than the club had previously described.
Late last year, Chuckas said Laurel Park lost between $4 million and $7 million annually. But the reports show Laurel lost $11 million in 2008 and $11.5 million in 2009.
And Pimlico, which used to pull in enough from the Preakness Stakes every year to make a profit, lost more than $900,000 in 2008 and $2.6 million in 2009. The track made $1.8 million in 2007.
“If you go back over half a dozen years, maybe a little even further, Pimlico was the flagship,” Chuckas said. “Pimlico made money.”
Gov. Martin O’Malley agreed in December to redirect $3.6 million in slots revenues to the club’s operations in 2011, and the Maryland Thoroughbred Horsemen’s Association will kick in $1.7 million.
An O’Malley bill, HB 1039 and SB 848, would extend the state’s involvement through 2014 to keep Laurel and Pimlico running at least 146 live racing days, though it does not specify how large the subsidy would be.
O’Malley’s chief legislative officer, Joseph C. Bryce, said horse racing is a “major economic driver in the state” and a way to preserve open farmland.
“These are operations that people rely on for their livelihoods,” he said. “Whether you’re stalling horses or racing horses, you want to know that there is some kind of future for you doing that.”
Maryland had a horse population of 79,100 valued at $715 million in 2010, according to the U.S. Department of Agriculture, and the industry involved some 28,000 people and $5 million in non-equine assets.
Some lawmakers said they wanted more details about the jockey club’s long-term plans before doling out subsidies. O’Malley’s proposal would be paid for with revenue from slot machines that would have otherwise bolstered racing purses, and is supported by the racing industry associations.
“If you don’t have any long-term, written plan to give to us … I have a little problem with that,” said Del. Frank S. Turner, D-Howard. “If I go to the bank and ask them for money, they want financial statements. They want to know how I’m going to pay it back.”
Sen. Edward J. Kasemeyer, the Howard County Democrat who chairs the Budget and Taxation Committee, said the subsidy issue is difficult to consider while lawmakers must also evaluate proposed cuts to health care and education.
“In the environment we’re in it, it has to be something that has a future, in my opinion,” Kasemeyer said.
Chuckas said the tracks’ troubles stem from competition outside the state and an attempt to curb drinking at Pimlico’s infield during the Preakness, which suppressed turnout in 2009.
“Obviously competing with Delaware, Pennsylvania and West Virginia is an issue,” he said, referring to states where horse tracks have slot machines and table games. “They have tools we don’t have.”
According to the financial reports, the club spent $6.12 million in 2008 and 2009 in lobbying for slots. The jockey club applied for a license to build a casino at Laurel, but was denied, and spent most of 2009 and 2010 in pitched legal and political battles to overturn the decision. The club spent $2.4 million in legal fees in 2009, according to the report, and another $7.5 million on an Anne Arundel County referendum drive in 2010, according to state campaign finance records.