Maryland matches Churchill's Preakness offer, will retain control of race
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The state of Maryland has exercised a right to match an offer made by Churchill Downs Inc. for a bundle of intellectual property rights tied to the Preakness Stakes, according to an announcement by Gov. Wes Moore.
The move by Maryland will cost the state $85 million up front and scuttle a previously announced deal by Churchill to buy the rights from 1/ST Racing and Gaming, the previous owner of Pimlico Race Course, the site of the Preakness. Legislation passed by the state to take over Pimlico from 1/ST Racing in 2024 contained a provision allowing the state to match any offer for the rights.
“This decision secures a vital asset for our state, allows Maryland to shape its horse racing destiny, and by leveraging the
Preakness’s iconic status and partnering with industry experts to enhance the
fan experience, preserve Maryland’s position as a key power player in the
Triple Crown for generations to come,” said Moore, in a statement.
In a statement, Churchill Downs confirmed that Maryland had matched its offer.
“We understand why the state of Maryland would decide to acquire the Preakness IP rights as a state-owned asset,” said Churchill chief executive Bill Carstanjen.
Officials from 1/ST Racing did not immediately respond to requests for comment.
Under the legislation that allowed the state to take over Pimlico, 1/ST was able to lease the bundle of rights back to the state each year for a fee of $3 million, with annual increases of 2.5 percent, plus a 2
percent share of gross wagering on the Preakness card and the Black-Eyed Susan Stakes card, held the Friday before the Preakness. The payments together
totaled approximately $6 million a year.
Pimlico is now owned and operated by a non-profit company controlled by the state. With the state now holding the intellectual property rights, those payments will no longer go to an outside company.
“By owning the IP, the state will no longer be subject to the disadvantageous fee structure of the existing exclusive licensing
agreement, which would have escalated costs for the state over time,” said the
announcement from Moore’s office.
The statement said that the transaction will be funded by a tax-exempt bond issuance from the Maryland Economic Development Corporation and paid back by the revenues generated by the Preakness and Black-Eyed Susan Stakes cards.
Churchill announced an agreement to buy the rights in late April. The sale of the rights generated speculation that Churchill would exercise some control over the Preakness, but Churchill officials eventually quelled that speculation a few days after the sale.
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