De Francis issues Va. warning Says no deal may spark 'ruinous competition'

December 03, 1992|By Ross Peddicord | Ross Peddicord,Staff Writer

WASHINGTON -- Laurel-Pimlico track operator Joe De Francis warned Virginians yesterday that they could become involved in "ruinous competition" with Maryland if people who want horse racing in that state pass up a deal to become part of a unique Maryland-Virginia circuit.

De Francis' comments came at a news conference where he and J. Carter Fox, president of the Chesapeake Corp., unveiled plans to build a track in the Williamsburg area.

Under De Francis' plan, live racing would be conducted at Laurel in the fall and winter, Pimlico in the spring and a new, resort-like Virginia track in the summer. The interstate system would be linked by a year-round off-track betting network.

De Francis cited Jockey Club statistics that indicate that the number of thoroughbred racehorses during the next three years will drop by approximately 30 percent.

He said the horse shortage will preclude any other entrepreneurs who want to build a track in Virginia from becoming "anything but minor-league."

Virginia produces only about half the number of foals that are born each year in Maryland.

Conversely, De Francis added, if someone else builds a track in northern Virginia and competes with Laurel and Pimlico for customers and horses, it could be devastating to Maryland.

"In this sort of climate, these are the challenges that face both states: For Virginia: How do you start an industry under these circumstances? For Maryland: How do we survive?"

The most compelling answer, De Francis said, is for both states to join and build what could become the third-largest racing circuit in the country behind Southern California and New York.

De Francis said preliminary studies indicate that such a circuit nearly would double purses now available at Maryland tracks.

De Francis likened the situation to the origin of interstate banking.

"Individual states put aside parochial interests and formed regional combines to fight takeovers by large New York banks like Chase Manhattan and Citibank," he said.

In the racing industry, New York and Southern California circuits hope to become the sole surviving major-league racing centers and leave the rest of the country's tracks "to divide up the crumbs," he said.

In order for the program to become reality, enormous obstacles will have to be overcome. Virginia horsemen and legislators need to be convinced that they will be better off with three months of live racing on a combined interstate circuit than trying to produce their own agenda.

Such tracks as Churchill Downs in Louisville, Ky., already have announced intentions to build a track in Virginia. Churchill Downs executives are meeting tomorrow in Richmond to try to form a joint venture with another group called Virginia Racing Associates, principally composed of harness racing interests.

In addition, current legislation will have to be changed. Virginia law now stipulates that only one simulcast can be shown for each live race that is carded. The number of statewide off-track betting parlors is limited to six and would need to be increased, "although not in the initial stages," De Francis said.

Timothy Capps, vice president of racing at Laurel-Pimlico, said: "Virginians might balk at only three months of live racing. After all, they have been dreaming of their own racing circuit for years. But, under current circumstances, it's just not feasible. I think, over time, they will come to embrace our idea."

De Francis said he plans to file his application to build the Williamsburg track next spring. "Then I would hope that the Virginia Racing Commission would act on the proposal by the fall of 1993."

He said it will take two years to build the facility. "The best-case scenario would be to have it operating by the summer of 1995."

Initial plans call for the track to accommodate 10,000 people and cost between $30 million and $60 million. No financing has been finalized for the project, although he said he has started negotiating with possible lenders.

De Francis added that he wanted to install horsemen advisory committees from Maryland and Virginia to assist in the design of the track "so that what we come up with is user friendly and workable for everyone."

He said he currently is putting together a team to start lobbying Virginia horsemen and legislators to gain their support.

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