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