05/15/2003 11:00PM

Maryland tracks plot 2004 slots strategy


BALTIMORE - Executives of the Maryland Jockey Club and Magna Entertainment, the co-owners of Pimlico Race Course and Laurel Park, had hoped to escort reporters, city officials, and politicians around Pimlico during Preakness week to point out where the slot machines would be installed.

They had hoped to describe how Pimlico would be torn down and replaced with a state-of-the-art grandstand built with the hundreds of millions of dollars in revenues that the slots would generate.

None of that happened. Slots are not on the way to Pimlico and Laurel, having been defeated by leadership in the House of Representatives earlier this year in a campaign in which the Maryland racing industry was portrayed as greedy and opportunistic. At least for this year, revenues from slot machines will not solve the chronic problems threatening the Maryland racing industry, and racing officials are retrenching for what could be a difficult 12 months.

"We're going to have to hunker down like we did last year," said Lou Raffetto, the Maryland Jockey Club's chief operating officer. "We're going to try to run our business in the most efficient manner we can, to minimize the expense side and grow revenue wherever we can."

Alan Foreman, the general counsel to the Maryland Thoroughbred Horsemen's Association, said horsemen are being realistic about the sacrifices they may have to make this year to keep purses on a competitive level.

"We're going to have to work with the racetrack to address what is probably going to be a very difficult financial situation," Foreman said. Horsemen would not object to cutting races from the schedule or reducing some purses in stakes races, he said.

Raffetto said the track is hoping to maintain the current purse structure. But programs will likely be cut to eight races several days a week when racing returns to Laurel Park in the fall. Other changes may also have to be made to the stakes program if Maryland's race cards continue to suffer under competition from Delaware Park and Charles Town. Slots revenues there have fueled double-digit purse increases over the past five years, making the tracks competitive with those in Maryland.

At the same time, racing lobbyists and MJC officials are convinced that a slots bill will be reintroduced next year, after legislators conduct a study this summer into how Maryland could legalize and profit from the machines. That study presents a threat and an opportunity for racing. The study could conclude that slots belong at racetracks, but also that slots belong at other facilities as well, an idea firmly opposed by MJC officials.

"Something will be passed," said Tim Capps, the MJC's executive vice president. "Do we have a consensus right now on anything that includes the racing industry's input, the views of the House and Senate, the leadership, and the governor? No. I don't think so. Not yet, at least."

Capps said the challenge for the MJC throughout the year will be to quietly make racing's case to legislators and the public while avoiding some of the mistakes of the last, unsuccessful campaign. Capps said that racing and its supporters were too timid in challenging some legislators' opinions and assumptions, and that racing was treated unfairly in the press because of the MJC's reluctance to speak up.

"We need to tell our own story, and make sure the bad information out there is corrected," Capps said.

The industry's message must change as well, Capps said. During the last campaign for slots, most of the debate focused on how to divide the slots revenues among horsemen, racetracks, and the state's general fund, where slots money was going to be used to fund education. In the debates, racetracks were continually portrayed as being greedy, at the expense of schoolchildren.

"It does not suffice to walk in and say, 'We're a big industry, we have X number of jobs and taxpayers, we have Y amount of economic impact," Capps said. "That alone is not enough to do this. We have to understand we are dealing with an issue that has much broader public implications than that, and that's how it is going to be dealt with. That's where the debate is going to be at."