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Jockey club, Penn National headed to arbitration over Rosecroft simulcasts

The Maryland Jockey Club and Penn National Gaming Inc. will turn to an independent arbitrator to craft a simulcast arrangement for Rosecroft Raceway after the two sides missed another deadline Saturday.

The deal, which would allow the long-struggling harness track to show and take bets on out-of-state thoroughbred races, is a prerequisite for the jockey club to receive up to $6 million in state operating aid in 2012 for Pimlico Race Course and Laurel Park.

“I am hopeful that the two industries will reach a mutually beneficial agreement through arbitration that will lay the foundation for a long-term solution that honors and protects Maryland’s storied racing tradition,” said Alexander M. Sanchez, secretary of the Maryland Department of Labor, Licensing and Regulation.

Jockey club President Tom Chuckas declined to comment through a spokesman, and a Penn National executive did not respond to requests seeking comment.

Alan Foreman, an attorney for the Maryland Thoroughbred Horsemen’s Association, said all parties to the negotiations have agreed to keep discussions confidential.

Arbitration could cap a tumultuous year for Penn National and the jockey club. Penn National, which owned a 49 percent stake of the club, called late last year for a steep reduction in racing days at Laurel and Pimlico to end the string of money-losing years there.

Maryland redirected $3.6 million in slot machine tax revenues earmarked for track improvements to the club’s operating expenses this year to maintain the racing schedule, and offered $6 million per year in 2012 and 2013, but not without caveats.

To qualify for the 2013 subsidy, the jockey club must develop a plan with horse breeders and owners that would allow the industry to survive on its own, without state aid or additional gaming, such as slot machines or table games. That plan is due Dec. 1.

Penn National bought Rosecroft in February, briefly putting the company on both sides of the simulcast negotiating table before it sold its jockey club stake in June.

The first deadline for the two sides to work out a deal on their own passed in July without an agreement in place. Sanchez mediated three months of negotiations, which again proved fruitless.

There is no deadline for the arbitrator — Sanchez will choose one if the club and Penn National can’t agree — to reach a resolution.

Lawmakers in the General Assembly hoped the simulcast agreement would help revive Rosecroft.

In 2009, the then-owner refused to pay a $5.9 million fee for the simulcast rights, and the Maryland Racing Commission cut off the signal just days before the Kentucky Derby.

Rosecroft closed last year after Cloverleaf Enterprises Inc. declared bankruptcy and could not sustain the Oxon Hill track.

Rosecroft is due to receive $1.2 million in state operating subsidies next year if it runs at least 40 days of live racing.

Standardbred and thoroughbred track owners are expected to outline their racing calendars for next year on Oct. 18 when they seek approval from the racing commission.