11/29/2001 1:00AM

Promises, promises (and nothing to show)


WASHINGTON - More than two years ago, Joe De Francis unveiled his "Racing Plan for the 21st Century." At a much-publicized news conference, the president of Laurel and Pimlico described an ambitious program of renovations for the Maryland tracks. He displayed drawings of the coming improvements, which included terraces overlooking a beautiful new paddock at Pimlico. De Francis also had a vision of how to pay for this project: His customers should do it.

This financing scheme was ultimately endorsed by the state legislature when it passed the Maryland Racing Act of 2000. The bill raised the takeout at the state's tracks by 1.5 percent, with the added revenue earmarked for racetrack renovations. That was the only part of the plan that became reality.

The 21st century is here, and Maryland racing fans will observe that there are no terraces and no beautiful paddock at Pimlico. There is no mall-like food court. There is no elegant landscaping outside the entrance to Laurel. The Maryland Racing Commission this week took official note of the non-renovation and proposed an official termination of this sham. It recommended that the money held in escrow for the renovation project be used instead for purse money at the state's tracks.

Maryland horseplayers have been justifiably cynical for decades about the way the state's racing industry is operated, but they rarely have witnessed such an exercise in foolishness and intellectual dishonesty. While the track owners deserve ample blame for the fiasco, so do the state's political leaders.

After De Francis had alienated Gov. Parris Glendening by opposing his re-election bid, Glendening exacted his revenge. Maryland had been paying an annual $10 million subsidy to purses at the state's tracks, but the governor now insisted that he wasn't going to help an industry that refused to help itself. He demanded that De Francis submit a plan for improving the tracks' facilities but volunteered no financial help for the huge project he was mandating.

The renovation plan submitted by the Maryland Jockey Club, which runs Pimlico and Laurel, was calculated to impress politicians more than to deal with the real needs of the tracks. (Laurel and Pimlico could do without landscaping, but they desperately needed adequate areas in which their customers could watch simulcasts, something the plan never mentioned.) And the financing plan could seem sensible only to people who don't understand betting. Raising takeout almost always produces a decrease in wagering - just as price increases in any other business dampen demand - and it made absolutely no sense in an industry that already was losing customers.

But the legislators accepted the idea, the tracks obtained a purse subsidy, and the "Racing Plan for the 21st Century" immediately began to gather dust.

De Francis insisted that "there were a lot of unfavorable developments" impacting the plan. Not long after Laurel and Pimlico raised their takeout, major tracks such as Saratoga and Keeneland lowered theirs, putting Maryland in a poor competitive position. "There was less revenue generated from the takeout increase than we thought," De Francis said. (Of course, any freshman economics student could have told him that this would happen.)

The revenue stream from the takeout increase was supposed to back bonds issued by the state, but there wasn't any evident demand for such bonds and besides, De Francis said, "We were very reluctant to lock in a takeout increase for the next 15 years."

Moreover, the political pressure on him had decreased. The state's subsidy for purses was terminated in July, anyway, so Annapolis no longer had this leverage over him.

Critics of the Maryland Jockey Club might conclude that the failure to improve Laurel and Pimlico is just business as usual.

"What you've got here is a history of unfulfilled promises," said blunt-talking racing commissioner John Franzone. He said that the success of Oriole Park at Camden Yards demonstrates how the right physical facilities can boost a sport, and the members of the Maryland Racing Commission are increasingly frustrated by conditions at Laurel and Pimlico. "Where is the plan to change Maryland racing?" he asked. He knows that the moribund "Racing Plan for the 21st Century" isn't going to be it.

By next July, Franzone said, there will be $5 million in the escrow fund earmarked for track improvements - part of it from the takeout increase, part from uncashed parimutuel tickets. If no bonds are going to be issued, something has to be done with the money, so, Franzone concluded, "Let's put it back into purses."

The commission has made this recommendation to the legislature, but it is a solution that rubs salt in the wounds of racing customers. Bettors were forced to pay a higher takeout rate so that horsemen could obtain their $10 million purse subsidy. The fans have done more than their part to help the horsemen, and if they are not going to benefit from improved racetrack facilities, they ought to get their money back in some fashion. Why not try to stimulate interest in Maryland racing by promoting special days when the takeout rate would be reduced to 10 percent? That would probably do more for the game than terraces overlooking a new paddock.

© 2001, The Washington Post