Horse racing interests need bill filed, passed with 4 weeks left in General Assembly

As the thoroughbred horse racing industry struggles with waning interest and grave economic challenges, its Maryland stakeholders are seeking to chart a path forward amid strong headwinds. But to complete that mission, advocates and legislators will soon need to introduce and pass a bill — and quickly, before the General Assembly session ends next month.

Equipped with $400 million in state funds approved by the legislature in 2020 and a new proposal — one that would eventually consolidate racing at Baltimore’s Pimlico Race Course, close Anne Arundel County’s Laurel Park and build a training track elsewhere in the state — the newly formed Maryland Thoroughbred Racetrack Operating Authority hopes this is the year the industry has a feasible plan.

“We have a once-in-a-lifetime opportunity here,” Alan Foreman, general counsel for the state’s horsemen and a member of the racing authority, said in a January meeting. “This will not present itself again. And we can’t let the perfect get in the way of the good.”

This racing quagmire, though, was supposed to already be resolved.

The 2020 law envisioned improvements to both Pimlico and Laurel Park, but that blueprint slowly unraveled after a series of problems. Senate President Bill Ferguson, a Baltimore Democrat and one of the most powerful lawmakers in Annapolis, recently likened the current situation to “Lucy and the football” — emphasizing that oft-discussed renovations to Pimlico have thus far failed to come to fruition.

Stakeholders hope that, actually and at long last, they have the plan this time that changes Pimlico and the racing industry. And that this is the General Assembly session for it.

The racing authority, chaired by attorney Greg Cross, was created last year and tasked with submitting a proposal to the General Assembly. That January 2024 report suggested a state-created, nonprofit operator take over racing in the state from The Stronach Group, a Canadian company that has recently operated racing in Maryland at a deficit.

On Feb. 9, Cross told a House committee that he expected there to be a bill this session and he set a deadline to “finalize an agreement” with Stronach by March 1. With a laugh, he noted the challenge of coming to an agreement in a timely manner: “Wish me luck. I’m glad February’s a leap year.”

While no bill detailing racing changes has been introduced and only a month remains until the session concludes, one is still expected.

“It does look like it’s likely that we’re going to have to do something this year and tackle this issue in the last 30 days,” Ferguson said last week.

Ferguson and Cross have each said that any plan would have to stay within the constraints of the allotted funds, which the authority’s January proposal would do. Its plan to rebuild Pimlico and “rotate the axis” of the racetrack — a decision that has been criticized by some racing fans who value Pimlico’s history — while also constructing a training facility in either Bowie, Aberdeen or Woodbine would stay almost precisely within the bounds of the budget, Cross has said.

Under the proposal, Stronach would license for an undisclosed fee the rights to the Preakness Stakes, the second jewel in the Triple Crown, to a nonprofit operator that would run it each year. Stronach will operate this year’s Preakness at Pimlico. If the new plan goes into effect, it’s unknown which entity would operate it next year — the 150th edition of the historic race.

Stronach has said it loses roughly $10 million a year operating racing in Maryland. That could leave a new nonprofit with an essential, risky task: operate racing in the state without losing money.

Even with substantial subsidies, racing has declined in popularity nationally for decades. Since 1989, the number of horse races run in the country has been cut in half, University of Louisville equine economics professor Thomas Lambert said.

“A lot of places aren’t as profitable as they used to be,” he said.

In Maryland, the industry received $91 million during the 2022 fiscal year from public revenue generated at casinos.

The nationwide trends can paint a bleak picture for operating 140 to 160 racing days in Maryland, the current proposal, in the black. But there are reasons for optimism, too.

Maryland could, if all goes as planned (an important caveat) roll out a much improved Pimlico in 2027, which might generate more revenue, specifically from Preakness weekend. And a January report by Crossroads Consulting to the racing authority stated that it is “possible to have a financially viable operating model,” but that it would require “thoughtful and strategic changes.”

The New York Racing Association — the not-for-profit that runs racing in New York and will soon host its Triple Crown jewel, the Belmont Stakes, at an improved facility — has been identified as a model for Maryland to follow.

The state bailed NYRA out of bankruptcy in 2008 and New York’s comptroller found in 2016 and 2018 audits that the not-for-profit operated at a deficit.

But NYRA disputes that it annually runs a deficit. It has “generated modest profits from racing operations” for the last 10 years, with the exception of the pandemic year of 2020, spokesperson Patrick McKenna said in a statement.

“Contrary to the assertions made in the past by the Office of the State Comptroller, NYRA’s financial reporting is a fair representation of the organization’s strong financial position,” McKenna stated.

Although the state of Maryland would create and staff the nonprofit operator, Cross has said any potential deficits it would face would not require a bailout from the state. It is a “bet-on-ourselves model,” Cross said earlier this year, that eliminates “the middleman.”

“I want to be clear: We’re not going to propose that the state subsidize a dollar of operational loss,” he told the House committee in February. “What we’re going to do is create a not-for-profit that has to operate like a business. If they lose money, they’re going to have to adjust race dates and purses to make up for that loss.”

Baltimore Sun reporters Sam Janesch and Hannah Gaskill contributed to this article.