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Maryland Racing Commission OKs Stronach’s deal to buy jockey club

Maryland’s horse industry will enter mediation this week to work on a simulcasting agreement after the Maryland Racing Commission approved two licenses to continue horse racing in the state.

The commission on Friday approved the Maryland Jockey Club’s sale to its new owner, Stron-MJC Limited Partnership.

“We unanimously approved it, granted there is a race course program … with 146 days of live racing in calendar year 2012,” said commission Chairman Louis J. Ulman.

Stron-MJC will now enter mediation with Rosecroft Raceway owner Penn National Gaming Inc. on the long-delayed agreement.

The Maryland Jockey Club, negotiating on behalf of the thoroughbred industry, and Penn National missed a June 30 deadline to decide on how to divide the profit from thoroughbred simulcasts at Rosecroft.

According to legislation passed this year by the General Assembly, the next phase is mediation led by Department of Labor, Licensing and Regulation Secretary Alexander M. Sanchez. An agreement must be reached by Oct. 1.

“All the parties have agreed to come to mediation,” Sanchez said. “That’s why we had to get through [Friday]. I think you’ve seen a lot of parties come together in this process. You have folks testifying on behalf of other folks who haven’t traditionally gotten along. “

Sanchez said he will talk to both sides individually this week before figuring out how to make all the parties come together.

Stron-MJC announced on June 16 that it had acquired Penn National’s 49 percent share of the Maryland Jockey Club.

And on June 30, Stron-MJC acquired the remaining 51 percent of the jockey club from MI Developments Inc. That deal transferred all of MID’s racing assets to its chairman and chief executive, Frank Stronach. In exchange, Stronach gave up control of Ontario-based MID. Stronach held 57 percent of the real estate company’s voting power.

The Maryland Jockey Club includes Pimlico Race Course, Laurel Park and the Bowie Training Center.

Pimlico Race Course, opened in 1870, is the annual host of the Preakness Stakes, the second leg in thoroughbred racing’s Triple Crown.

The racing commission also agreed Friday on the modification of a racing license agreement with Prince George’s Racing Ventures LLC, the Penn National subsidiary that purchased Rosecroft in February.

The commission voted July 6 to allow harness racing to return to Rosecroft with the condition that Penn National Gaming give a letter of credit to its subsidiary, saying it would absorb operating losses incurred from Aug. 1 of this year through Dec. 31, 2012.

Company executives predicted during the original license hearings that Rosecroft would have $2.3 million in operating losses through 2013 without additional capital contributions.

Penn National has agreed to issue letters of credit for $500,000 in 2011 and $900,000 in 2012 to guarantee potential losses at Rosecroft.

The racing commission also required Stron-MJC to guarantee potential losses at its tracks through the end of 2012. Both track operators must run a minimum number of live racing days through the end of 2012. Operators must file for approval by the commission in December for 2012’s racing dates, said J. Michael Hopkins, executive director of the Maryland Racing Commission.

The jockey club unveiled its fall stakes schedule for Laurel Park Friday after reaching an agreement with the Maryland Thoroughbred Horsemen’s Association and Maryland Horse Breeders Association and having the schedule approved by the commission.

The 68-day fall meeting will start Sept. 9 and end Dec. 17. The schedule will include 27 stakes race worth nearly $2.3 million.