The Maryland Racing Commission voted unanimously Monday to reject the sale of 49 percent of the Maryland Jockey Club, which owns Laurel Park and Pimlico, to Penn National Gaming Inc. The commission also rejected a plan that would have dramatically reduced the number of 2011 racing dates in the state to just 47.
"We're still at an impasse," explained Mike Pons, former president of Maryland Horse Breeders Association and one of a number of horsemen who spoke at the three-hour meeting. "This is basically setting the table for more serious negotiations."
Frank Stronach, the chairman of MI Developments, which owns the Maryland Jockey Club, is in Europe until next week. Stronach has said he hopes to have as many as 140 racing dates next year, a figure close to what has been traditional in recent years.
The legal implications are unclear regarding the commission's rejection of the partial sale of the Maryland Jockey Club to Penn National, as it was announced in May that Penn National had entered into a joint venture with MID to own and operate Laurel and Pimlico.
The proposal to reduce dates was brought to the commission by Penn National, a casino and racing conglomerate. Among its many holdings, Penn National owns Hollywood Casino Perryville, a free-standing facility that recently became Maryland's first operational casino.
Maryland law will begin directing as much as $60 million in annual subsidies from state casinos to Thoroughbred purses and breeders' awards. Under the statute, the Maryland Jockey Club is required to distribute the money. If racing dates had been significantly cut, Maryland's tracks could have been doling out more than $1 million a day in purses over the 47 dates of live racing, along with more than $8 million in breeders' awards, or at least $200,000 a day. Those levels would far exceed the daily purse distributions and breeders' fund awards at any track in the country.
The Maryland statute sets aside as much as $100 million in casino revenue to the state's racing industries, with $80 million going to the Thoroughbred industry and $20 million to the Standardbred industry. Of the $80 million, approximately 25 percent goes to racetracks for capital expenditures, but the tracks can use the money only if they agree to match it. Of the rest, 89 percent goes to purses, and 11 percent to breeders' awards.
The money has already started flowing in. The Perryville casino generated $942,937 in October for purses and breeders' awards at state racetracks through 1,500 slot machines. Much more money is on the way. A casino near Laurel Park that MI Developments unsuccessfully fought to stop in order to steer the casino's license to itself plans to open a temporary facility in 2011, and the full 4,750-machine casino should be up and running by the spring of 2012.
-- additional reporting by Matt Hegarty