Updated on 09/16/2011 8:23AM

De Francis: Embattled optimist

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Four years ago, Joe De Francis, president of the Maryland Jockey Club, backed the wrong horse. He has been paying for it ever since.

In 1998, De Francis endorsed the pro-slots opponent of Parris Glendening, Maryland's anti-gambling, incumbent governor. Glendening won reelection, and he remembered his friends and punished his enemies. Since then, the possibility of slots at racetracks has faded, even as the racing business in Maryland deteriorated in part because of competition from West Virginia and Delaware, where slots are legal.

De Francis, 47, took over from his father in 1989 as president of the MJC, which operates Pimlico Race Course and Laurel Park. He has struggled on other fronts recently, feuding with horsemen over purses and dates and with other racetrack operators. This year, the state withheld its annual purse subsidy to Maryland's racetracks, and the racing commission has been openly critical of how the MJC has conducted business.

Now, it's Preakness week, and elections are only six months away. The MJC has reached an agreement with its horsemen, and De Francis is talking about slots again, even while reports circulate that he is negotiating to sell his tracks to Magna Entertainment or Churchill Downs. De Francis spoke about the tumultuous state of Maryland racing earlier this week at Pimlico with Daily Racing Form's Matt Hegarty.

Daily Racing Form: It's been widely reported that the MJC has been in negotiations with both Magna and Churchill Downs about a possible sale. What's the status of those negotiations?

De Francis: I can't comment on any discussions that I may or may not have had with any specific party. I know that sounds like Dick Nixon responding to Watergate, but there's nothing I can say about that.

What would it take for you to sell the tracks?

All I can do for that, and I know it's not very satisfying, is to respond the way my father used to respond, which is to say that I love what I'm doing, I'm totally committed to the company and to the Maryland racing industry, and yet at the same time, everything that I have in life is for sale other than my family and my good name. That's what my father used to say, and that's all the response I can give you.

How much value would slot machines add to the tracks?

Slots have really changed the fundamental nature of the competitive landscape in racing in America. I believe the effect is going to be more profound, rather than less profound, as time continues to pass. Tracks that were either out of business, or at the very best - to use a baseball analogy - single A or double A, have now become in a few short years major players as a result of the institution of slot machines. You know all the locations: Prairie Meadows, Mountaineer Park, etcetera.

As I look down the road in the future, there are really two ways to continue to succeed. Either you turn into a very short, boutique-type meet, like Keeneland does, and run a month in the spring and a month in the fall and simulcast during the rest of the year. Or, if you want to be a year-round racing jurisdiction, as Maryland has been, then you need to level the playing field and offer the competitive tools that these other tracks have. That's the only way to maintain year-round racing.

So if the MJC isn't successful in getting slots in the next couple of years, does the MJC stop racing year-round?

Absolutely. Year-round racing has been a foundational cornerstone of our program in Maryland and it has been great for the industry. It has allowed our horsemen to stop living like gypsies, to put down roots, to become part of the community. It's been a tremendous boon for the overall industry. But given the competition we have around us and given the purses that they are offering in Delaware and West Virginia, with purses going up and up, I don't see how we can continue to pursue that business model. I just don't. If God came down from the heavens and said, 'I'm telling you now that there will never be slots in Maryland,' then we have a contractual obligation for the next several years with the horsemen's association to run 220 days, but as soon as that contract runs out, we start making plans to dramatically restructure the schedule because we can't keep going the way we are going.

You've had a contentious relationship with horsemen, legislators, and the governor. Are slots feasible with you at the helm of the MJC?

The current governor is going to be the past governor come November. He's been the main political opponent to slots. Once he leaves, a number of legislative leaders, like Mike Miller, who is the president of the Maryland Senate and knows me very well and who has been supporting racing for many, many years going back to the 1980's - for close to 20 years now - has said, publicly, that this is an issue we are going to have to deal with in the next legislative session.

Why have horsemen and racetracks been unable to work together?

There's always been a historical Hatfield and McCoy relationship between the Thoroughbreds and Standardbreds, and that has become much more complex because of simulcasting. Historically, the law divided the day and made the daytime the exclusive province of the Thoroughbred and the nighttime the exclusive province of the Standardbred. Back in the 80's and early 90's, it was very cut and dried, very simple, and very clean.

When full-card simulcasting began, those clear lines have become very blurry. Full-card simulcasting has raised these issues that don't fit neatly into the old business model, and as a result, it has led to a lot of disagreements between the two industries.

How do you repair that? Even now, the harness industry is backing out of an agreement you reached last year.

It's like any other agreement. People are going to have to compromise. They have to realize that continued intransigence is not going to help anyone. Obviously, that's hard to do. Why has this Middle East problem blown up to such epic proportions? Because people have very strongly held opinions and people feel they are better off taking a hard line than trying to compromise. Hopefully, people in this industry will realize that compromising and getting progress is going to be better than sticking almost blindly to certain principles that lead to stalemate.

What issues will the MJC compromise on?

We've got to come up with a business model that will allow us to develop more OTB's. It's difficult because Maryland is a very small state with about 85 percent of the population concentrated in the Baltimore-Washington corridor, where all the Thoroughbred and Standardbred racetracks are located, literally within 20 miles of each other, so that leads to a lot of problems. I just think everyone will have to agree to give a little bit to get it done.

One of your problems has been a contentious relationship with the Maryland Racing Commission. Can you make peace with the commission without having peace between the breeds?

I think we've made great strides in that regard. The commission very soundly applauded the agreement we made with the horsemen over the 220 days and the stakes schedule. I think the thing we can do to continue the progress we have made is, number one, communication, so that we hear in a timely manner from the commission what issues they want addressed, and, number two, follow up, to make sure we get the issues addressed.

Are there plans to restore the takeout levels to where they were pre-2000, when takeout was raised by 1 1/2 points to pay for renovations? That money isn't going to renovations anymore.

We hoped to do that this year but we ran out of time in the legislative session. That will happen next year.

You're saying that the MJC will support that legislation next year?

Absolutely.

An idea floated recently by Stuart Janney has been to create a state-funded supertrack that would play host to the Preakness and other horse events. Is that a viable option, politically or financially?

I think it's really more of a blue-sky idea than anything else. It sounds great to say "let's start over and build a supermodern facility," but when you start analyzing it, the first hurdle, politically, is where does all the money come from? The taxpayers are not going to pay for any more sports facilities. They've already paid for a baseball stadium and a football stadium.

Even if you were to get past the funding issue, there are a number of other very, very tough, important logistical issues to overcome. Where do you put it? The city of Baltimore is very proud to be the home of Pimlico Race Course and the Preakness Stakes, so I don't see how you are going to get support from the city to close Pimlico and move the Preakness out of the city. While it sounds like a panacea in concept, the industry is better served on how we can improve and revitalize Pimlico and Laurel, rather than trying to make the idea of one grand super-facility work.

Do Pimlico and Laurel generate enough money to revitalize them?

A lot of it is tied up in the slots issue. If we had the benefit of the revenues that slots have generated anywhere they have been, then we could literally rebuild Pimlico and Laurel from the ground up, turn Pimlico into a real showplace for the Preakness, and turn Laurel into the kind of track that would be a major racing center where we would run the majority of the race days from the early fall to early spring.

If you would get slots, is Maryland still a year-round racing state?

Yes.

If Pimlico didn't have the Preakness, could the MJC survive?

One-word answer on that one: No.

One of the complaints from racing fans has been that offtrack betting has been legalized for years, yet there are only three OTB's. How is the MJC going to address that?

We need to work out the differences between the Thoroughbreds and Standardbreds. If we can do that, we would very much like to open some more facilities, especially in the Baltimore area. There's a lot of people out there.

If you had one goal for the remainder of the year, what would it be?

I really think it would be to unify the industry, to bring all the different segments together - breeders, horsemen, tracks - both within the Thoroughbred industry and then together with the Standardbred industry. If we can achieve that goal, then we can go forward and build more OTB's, then we can have a very effective lobbying campaign to get slots legislation, we can aggressively implement account-wagering; there's lots of things that we could do.