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Md. Jockey Club facing resistance from senators

ANNAPOLIS — Beset by mounting financial problems, the Maryland Jockey Club is also facing resistance from state senators considering legislation that would extend state support for operations at Pimlico Race Course and Laurel Park.

The club submitted financial reports to the state last week that showed $20 million in losses at the thoroughbred tracks in 2010, a 43 percent increase over the year before. That works out to almost $137,000 for every day the tracks held live racing.

Legislation in the Senate would allow the state to redirect up to $6 million from slot machine revenues to the tracks in 2012 and 2013. Gov. Martin O’Malley has already committed $3.6 million to the club for 2011.

Senate President Thomas V. Mike Miller Jr. said Friday the depth of the tracks’ struggles does not foster more urgency to pass the subsidy bill, HB 1039.

“We all hope and pray there’s a future for racing … but management is responsible for its own demise,” Miller said. “The state cannot afford to bail out an industry that can’t help itself.”

Jockey club President Tom Chuckas predicted that a defeat of the subsidy bill would lead to a repeat of 2010, when the club threatened to slash its racing calendar from 146 days to 40 to attempt to break even this year.

“If there’s no formula for 2012, you’re looking at pretty much a re-enactment of November and December of last year,” he said.

Sen. James E. DeGrange Sr., D-Anne Arundel, said the Budget and Taxation Committee is eyeing potential changes to “tighten” the bill, which passed the House on March 26 on a 94-39 vote. DeGrange said amendments could include a repayment provision, should the tracks become profitable.

“We’re going to tighten it up to make sure there’s some accountability from the people who use these funds,” he said.

The financial statements submitted by the club last week — unaudited reports that cover January through April, and audited reports that cover the rest of the year — show both facilities were deep in the red last year.

Laurel Park lost $7.2 million during the first four months of 2010, and $6.9 million during the remainder. Pimlico lost $5.9 million in the first four months, but made a profit of $20,120 after that.

Pimlico, home of the Preakness, spent “less than $400,000” on this year’s Kegasus advertising campaign built around the hard-drinking spokes-centaur, Chuckas said. He added that “not a whole lot more than that” was spent on the 2010 “Get your Preak on” push.

“It’s imperative that the infield is filled with people who want to enjoy themselves,” Chuckas said.

The club lost $14 million at its tracks in 2009, and $12 million the year before that, according to unaudited financial reports released three weeks ago.

During a conference call with reporters Friday, Chuckas said he expects the club to break even, or close to it, in 2011. He said the $3.6 million in aid from the state, $1.7 million kicked in by the Maryland Thoroughbred Horsemen’s Association, another $1.7 million in cost-cutting and the absence of large, one-time expenditures would get the club to that point.

Among those costs were legal battles and a referendum campaign attempting to wrest the Anne Arundel County slots license away from developer David Cordish.

The club reported preparations for slot machine gaming cost nearly $3.5 million in 2010, on top of the $6.12 million it spent in 2008 and 2009. Legal fees totaled $2.9 million in 2010, a nearly 16 percent bump over the $2.5 it spent in 2009.

The subsidy bill would prevent the jockey club from spending money from the state on lobbying, slots preparations or “extraordinary” legal expenses. The club has dropped its administrative and legal challenges to Cordish’s casino, but is still the target of a lawsuit filed by the developer, seeking $600 million for its role in delaying construction of the casino next to the Arundel Mills shopping mall.

“The belief was that it was in our best interest to acquire gaming at Laurel,” Chuckas said. “For the long-term good of the industry, we thought that was the way to preserve it. Unfortunately, it did not work out that way.”

One comment

  1. Ok fine the MJC can’t use state money to get slots etc… So they use their own money and that makes their bottom line look worse. Then the state gives them more money. I’m sorry but the huge losses they are posting shows a company going belly up. Where is Frank Stronach in all of this??? He is a multi-billionare keeping his head low and hoping we’ll bail him out. He already bankrupted this enterprise once. What is the plan for that not to happen again?