Racing’s resur­gence

Our view: Good news comes for Maryland’s horse in­dus­try, but what about Pim­lico?

Baltimore Sun - - TRUMP TRANSITION -

Seven years ago, a colos­sal screw-up by the com­pany that owned Maryland’s thor­ough­bred tracks looked like it might threaten not just the fu­ture of Lau­rel Park and the Preak­ness but the state’s sto­ried horse in­dus­try as a whole. But it turns out that the fail­ure to turn in the re­quired li­cens­ing fee with its slot ma­chine gam­bling ap­pli­ca­tion might have been the best thing that hap­pened to Maryland racing and all those whose liveli­hoods de­pend on it.

A re­port out this week from as­sorted play­ers in the in­dus­try paints a rosy pic­ture of re­bound in the years since slots came to Maryland, if not to the tracks. The gam­bling money that has been pumped into the in­dus­try has helped foster new in­vest­ments on the state’s horse farms and an ex­pan­sion of breed­ing op­er­a­tions. Ac­cord­ing to the anal­y­sis by Sage Pol­icy Group, the horse in­dus­try — not count­ing racing — is now back above $1 bil­lion in an­nual eco­nomic im­pact here.

The ques­tion, though, is whether that resur­gence is merely the ar­ti­fi­cial prod­uct of the $57 mil­lion in gam­bling rev­enues that were ded­i­cated to sup­port­ing horse racing or whether the in­dus­try is ac­tu­ally us­ing that op­por­tu­nity to make its prod­uct more at­trac­tive, rel­e­vant and sus­tain­able. For once, there’s ac­tu­ally good news to re­port on that front, too.

The Stronach Group, the suc­ces­sor of the com­pany that botched the slots li­cense ap­pli­ca­tion in 2009, is mak­ing hun­dreds of mil­lions in in­vest­ments at Lau­rel Park. It is sys­tem­at­i­cally im­prov­ing the grand­stands, adding restau­rants and other ameni­ties, mak­ing seats more com­fort­able, adding event venues, im­prov­ing views and chang­ing the over­all ex­pe­ri­ence to make it more fan-friendly. The com­pany is an­gling to bring the Breed­ers Cup to the track within the next few years. The im­prove­ments at Lau­rel are sup­ported in part by gam­bling pro­ceeds ded­i­cated to cap­i­tal im­prove­ments, but they also rep­re­sent a sub­stan­tial com­mit­ment by Stronach and its owner, Cana­dian auto parts mag­nate Frank Stronach.

There are signs that it’s ac­tu­ally pay­ing off when it comes to get­ting peo­ple to show up and bet on the horses. Maryland racing, like the in­dus­try in gen­eral, is nowhere near its his­toric lev­els. But it has shown signs of life lately. Ac­cord­ing to the Maryland Racing Com­mis­sion, to­tal wa­ger­ing in Maryland ac­tu­ally ticked up slightly from 2014-2015. The in­crease was mod­est — about $10 mil­lion — but it was the first year-over-year growth in more than a decade.

That’s not true of any of our neigh­bor­ing states with sub­stan­tial racing in­dus­tries, all of which fol­lowed the more tra­di­tional ra­cino model of lo­cat­ing ad­di­tional gam­bling fa­cil­i­ties at the tracks. Horse wa­ger­ing de­clined by about 2 per­cent in Delaware last year, 6 per­cent in Penn­syl­va­nia and nearly 15 per­cent in West Virginia, com­pared to an al­most 6 per­cent in­crease here. Typ­i­cally, when casino gam­bling moves into a horse track, the track be­comes an af­ter­thought. Here, the track is the only fo­cus, and it is more than sur­viv­ing, de­spite be­ing just a stone’s throw from the tremen­dously suc­cess­ful Maryland Live casino.

All that good news comes with an enor­mous as­ter­isk, though. The in­vest­ment in Lau­rel only un­der­scores the pre­car­i­ous­ness of Pim­lico and its sta­tus as the home of the Preak­ness Stakes. The Maryland Sta­dium Author­ity is presently con­duct­ing a study of the track’s vi­a­bil­ity and the cost of bring­ing it up to mod­ern stan­dards, but Stronach of­fi­cials have in the past cast doubt on whether the kind of im­prove­ments that would be nec­es­sary are at all fea­si­ble given its con­di­tion and the con­straints posed by its lo­ca­tion in the mid­dle of res­i­den­tial neigh­bor­hoods in North­west Bal­ti­more.

We be­lieve the Preak­ness should stay in Bal­ti­more. It of­fers tremen­dous sig­nif­i­cant eco­nomic ben­e­fits to a city that badly needs them, and the cer­tain death of Pim­lico that would fol­low any move of the Preak­ness would be dev­as­tat­ing to the neigh­bor­ing com­mu­ni­ties. More­over, so much of what makes the Triple Crown spe­cial is wrapped up in his­tory and tra­di­tion. It’s en­tirely pos­si­ble that mov­ing from Old Hill­top to Lau­rel, no mat­ter how much spiffier it may be, would break the spell.

But that means city and state lead­ers need to be pre­pared for some harsh re­al­i­ties from the Sta­dium Author­ity. Given the trend to­ward con­sol­i­da­tion in the in­dus­try gen­er­ally, it’s hard to see a pure busi­ness case for main­tain­ing and op­er­at­ing two state-of-theart tracks in Maryland. Any path for­ward for Pim­lico is cer­tain to re­quire an in­vest­ment by the state well beyond what it has made so far.

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