Maryland horse racing officials on Wednesday said the state’s racetracks needed a three-year government subsidy to give them more time for developing a long term plan, which will likely include consolidating into private ownership.
Penn National Gaming is considering selling back its 49 percent stake in Laurel Park and Pimlico Race Course, officials said. In turn, co-owner MI Developments would transfer total ownership of the two thoroughbred tracks to Frank Stronach, the founder of Ontario-based MID. Stronach was also chairman of Magna Entertainment Corp., the bankrupt former owner of Maryland’s tracks.
“From a corporate or business perspective it is much more beneficial to have one single ownership, one single voice … that makes it much easier to market,” said Tom Chuckas, president of the Maryland Jockey Club, which operates the tracks.
Chuckas was testifying before the Senate Budget and Taxation committee on a bill that proposes temporarily reallocating slots revenue for racetrack operations. The bill, proposed by the O’Malley administration, would divert the slots revenue designated for a racetrack renovation fund to track owners to buoy any operational deficit through 2014.
Thoroughbred tracks would receive up to 80 percent of the fund for operations and the state’s two harness racing tracks would receive up to 20 percent or $1.2 million. The fund is projected to total $10 million in 2012, according to Joseph Bryce, Gov. O’Malley’s chief legislative officer.
The Washington Examiner reported this week the thoroughbred tracks combined for a $26 million loss in 2008 and 2009.
Maryland’s thoroughbred tracks have been under corporate ownership since 2002, when the DeFrancis family sold the majority stake to Magna, which once was the largest racetrack owner in North America.
A spokesman for Penn National said the sell back to MID is not final; that the company is still weighing its options. A spokeswoman for Stronach did not respond to a request for comment. However Bryce said at the hearing that he expected Stronach to have sole ownership by June.
Stronach has been no stranger to Maryland racing for the last decade. However, his detractors point to the failure of Magna and his support for a shortened racing Maryland racing season in 2011.
Supporters of the legislation, including breeders and horsemen, said the primary purpose of the bill was to save the state’s horse farms and industry jobs while giving the tracks enough time to come up with a long term business plan in the wake of losing the opportunity to bring slots to Laurel.