Md. horse in­dus­try starts to make a run for the money

Study finds it is gen­er­at­ing 23 per­cent more than it was in 2010

Baltimore Sun - - FRONT PAGE - By Jeff Barker

Mary­land’s horse in­dus­try hasn’t re­cov­ered fully from years of de­cline but has re­gained its foot­ing and is gen­er­at­ing more than $1 bil­lion a year — 23 per­cent more than in 2010, a study re­leased Mon­day found.

The study, con­ducted by the Sage Pol­icy Group, said the in­dus­try’s nascent re­bound ap­pears to be ac­cel­er­at­ing.

“The last five years have rep­re­sented a stark con­trast from the prior three decades when Mary­land’s horse in­dus­try was in de­cline,” said the study, paid for by the Mary­land Horse Breed­ers As­so­ci­a­tion and a dozen other in­dus­try part­ners.

The study, re­leased at Goucher Col­lege — which is build­ing a new eques­trian fa­cil­ity that soon will be the new home of the breed­ers as­so­ci­a­tion — quan­ti­fied the ex­tent of the in­dus­try’s re­cov­ery and its rip­ple ef­fect on the state’s econ­omy.

The in­dus­try’s eco­nomic im­pact grew from $930 mil­lion in 2010 to $1.1 bil­lion last year, when it sup­ported the equiv­a­lent of about 9,100 full-time jobs with com­pensa- tion of about $482 mil­lion, the study said. At the cur­rent rate of ex­pan­sion, re­searchers said, the in­dus­try could have a $1.5 bil­lion an­nual im­pact by the end of 2020 and sup­port more than 11,000 jobs.

Mike Pons, co-owner of Coun­try Life and Mer­ry­land farms, said he be­gan to no­tice a change “when we brought the first of our new stallions back in 2012.” Be­fore that, he said, own­ers had been send­ing their mares mostly to Penn­syl­va­nia, West Vir­ginia and other states to give birth.

He es­ti­mates rev­enue from horse board-

ing is up 40 per­cent since 2012 at the two farms, which col­lec­tively have more than 100 horses and al­most 300 acres, much of it rolling pas­tures, in Har­ford and Bal­ti­more coun­ties.

“We al­ways had the in­fra­struc­ture, we just didn’t have the dol­lars” in the state, Pons said.

The study looked at all as­pects of the horse in­dus­try, which en­com­passes breed­ers, train­ers, auc­tion­eers, far­ri­ers, farm man­agers, tack and equip­ment mak­ers, and many others. It ex­am­ined recre­ational rid­ing and ser­vices to rac­ing, such as vet­eri­nary work, but did not in­clude spend­ing at race­tracks. Sage Pol­icy Group wrote the re­port based on a sur­vey of nearly 700 in­dus­try stake­hold­ers.

But the re­cov­ery hasn’t led the in­dus­try all the way back to where it was in the early 2000s.

“De­spite the uptick in ac­tiv­ity in re­cent years, Sage es­ti­mates that in­dus­try spend­ing re­mains 13.5 per­cent be­low its 2002 level,” the study said. “If one ad­justs for in­fla­tion, that fig­ure rises to more than 34 per­cent. In other words, Mary­land’s horse in­dus­try is still heal­ing.” And ques­tions re­main. “I think the pic­ture is much bet­ter than it was, but I’d still say it’s guarded,” said Ti­mothy Capps, di­rec­tor of the Equine In­dus­try Pro­gram at the Univer­sity of Louisville.

Capps, for­mer ex­ec­u­tive vice pres­i­dent of the Mary­land Jockey Club, which owns the Pim­lico and Lau­rel Park tracks, said ques­tions re­main about where the in­dus­try goes in the fu­ture since the tracks did not se­cure casino gam­bling.

While gam­bling didn’t go to the race­tracks, the state does sub­si­dize the horse rac­ing in­dus­try with a per­cent­age of casino slot ma­chine rev­enues. Un­der leg­is­la­tion ap­prov­ing slots gam­bling in 2008, 7 per­cent of the rev­enue goes to­ward track purses and in­cen­tives for in-state thor­ough­bred breed­ing and another 2.5 per­cent goes into a race­track fa­cil­i­ties fund.

Be­fore gam­bling came to the state, the study said, slots pro­grams in Delaware, Penn­syl­va­nia and West Vir­ginia “had tilted the com­pet­i­tive play­ing field away from Mary­land.”

Gam­bling on horse rac­ing is also down na­tion­wide at U.S. tracks, fall­ing from a high of $15.2 bil­lion in 2003 to $10.6 bil­lion in 2015, ac­cord­ing to Jockey Club fig­ures cited in the study.

The state was hit with a “dou­ble whammy,” said Ross Ped­di­cord, di­rec­tor of the Mary­land Horse In­dus­try Board, a state Agri­cul­ture De­part­ment group aid­ing the in­dus­try.

“The 2008 re­ces­sion hurt the non­rac­ing dis­pos­able in­come, with peo­ple buy­ing less, go­ing to less shows, buy­ing less-ex­pen­sive show horses,” Ped­di­cord said. “And then there was the pro­lif­er­a­tion of the casino gam­bling in neigh­bor­ing states.”

But it didn’t take long af­ter the casi­nos started open­ing for the ef­fects of the new fund­ing to be felt, ac­cord­ing to the study.

“What’s re­ally re­mark­able is the fact that the in­dus­try has turned around so quickly,” Anir­ban Basu, Sage Pol­icy Group’s chair­man, said in an in­ter­view. “What peo­ple are do­ing now is a lot of de­ferred main­te­nace. And they are, of course, breed­ing more horses.”

The re­cent suc­cess of breed­ing op­er­a­tions is an im­por­tant com­po­nent of the in­dus­try’s re­vival.

In 2010, the study said, 20 stan­dard-bred mares were bred in Mary­land. By 2014, the num­ber had risen more than12-fold to 250. In 2015, the state’s thor­ough­bred and stan­dard-bred foal num­bers were the high­est in sev­eral years.

Still, there is a ten­u­ous qual­ity to the in­dus­try’s resur­gence. The in­dus­try wor­ries the leg­is­la­ture could shift rac­ing’s cut of slot ma­chine rev­enues to other projects.

The breed­ers as­so­ci­a­tion’s re­lease about the study said that while spend­ing on equip­ment, per­son­nel and phys­i­cal struc­tures is ris­ing, “it would grow even more quickly if there was less un­cer­tainty about the state’s com­mit­ment to the cur­rent slots fund­ing for­mula.”

Sage Pol­icy Group con­ducted a sep­a­rate study in 2015 ask­ing peo­ple in the in­dus­try to as­sess their eco­nomic prospects, “and they said their lead­ing con­cern was that this for­mula would change,” Basu said in an in­ter­view.

The House chair of the joint gam­ing com­mit­tee in An­napo­lis said Mon­day he doubts the for­mula will shift any­time soon.

“I think there are some leg­is­la­tors who feel the money should be re­dis­tributed, but the gen­eral con­sen­sus is the in­dus­try is do­ing well and this is work­ing,” said Del. Eric Luedtke, a Mont­gomery County Demo­crat.

While the study didn’t in­clude the im­pact of race­track op­er­a­tions, it noted that the Preak­ness — which re­ported record at­ten­dance of 135,256 last May — gen­er­ates more than $30 mil­lion each year.

Of­fi­cials with the Stronach Group, which owns the Mary­land Jockey Club, have sug­gested the pos­si­bil­ity of mov­ing the Preak­ness to the re­fur­bished track in Lau­rel.

Capps said ques­tions about the fu­ture of out­dated Pim­lico hover over the in­dus­try. The Mary­land Sta­dium Author­ity is study­ing Pim­lico’s con­di­tion, and the re­sults are ex­pected to help the own­ers de­cide what to do with the fa­cil­ity.

But for now, Capps said, the trend in Mary­land “is up, and that’s not the case ev­ery­where in terms of peo­ple com­ing out of a re­ces­sion.”

The state’s in­dus­try “has man­aged to turn it around, and right now they’ve got a story to tell,” he said.

KEN­NETH K. LAM/BAL­TI­MORE SUN

Rid­ers ven­ture out on a cold day at Mer­ry­land Farm, a horse train­ing cen­ter in Hy­des in Bal­ti­more County. A study re­leased Mon­day by the Sage Pol­icy Group said Mary­land’s horse in­dus­try is re­bound­ing at an ac­cel­er­at­ing pace.

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