Updated on 04/03/2012 5:08PM

Pimlico, Laurel show smaller losses


With an influx of $5.3 million from the state's casinos and horsemen, Laurel Park and Pimlico Racecourse in Maryland cut their losses in 2011, according to financial statements filed with the Maryland Racing Commission on Monday. The combined 2011 loss - $5.3 million - is a significant improvement from 2010, when the two tracks lost a combined total of $20 million.

For 2011, Pimlico had a loss of $423,000, according to the documents, while Laurel Park lost $4.9 million. Pimlico and Laurel are owned by The Stronach Group, a private company owned by Frank Stronach that took possession of the tracks last year as part of a larger asset transfer from MI Developments, a publicly traded company controlled by Stronach.

Revenue for the tracks was bolstered by a total of $3.6 million in subsidies from the state's two operating casinos. In addition, the Maryland Thoroughbred Horsemen's Association contributed $1.7 million to help defray the tracks' operating costs as part of an agreement reached last year to maintain 146 live racing dates in the state.

Tom Chuckas, the president of the tracks, said that the improvement over the 2010 results could be attributed to a number of factors, including better financial results from the Preakness Stakes, the second leg of the Triple Crown, which is held every year at Pimlico.

In addition, the tracks in 2010 incurred costs related to a bankrupty of the track's former parent company, Magna Entertainment Corp., another publicly traded company controlled by Stronach that was dissolved that year. Under the dissolution, the tracks were deeded to MI Developments, which held most of Magna Entertainment's debt.

The subsidies from the state's casinos are expected to total $6 million in 2012 because of the scheduled opening of a mammoth casino in Anne Arundel County this summer. Under a deal worked out with legislators, the tracks receive 2.5 percent of the state's casino revenue, capped at $6 million, which can be used toward operating costs. Also next year, horsemen have pledged $4 million from their share of the casino subsidies, for a total of $10 million in assistance.

Chuckas said that the assistance will likely result in the two tracks posting a profit in 2012 for the first time in years, but he cautioned that the tracks are attempting to develop a business plan that would envision operating without the subsidies as of 2013. The current legislative agreement allowing the tracks to use the 2.5 percent subsidy for operating expenses, rather than capital improvements, expires at the end of 2012.

"We can't assume that contribution is going to be available forever," Chuckas said.