Homestretch looms for DeFrancis Racing future tied to bold tech gamble

May 14, 1993|By Jon Morgan | Jon Morgan,Staff Writer

When he emerged the surprise successor to his father at the head of the state's major thoroughbred tracks, Joseph A. De Francis, then a 34-year-old corporate lawyer, was viewed as bright, energetic, if a little green.

Less than four years later, Maryland racing has faltered badly, and critics increasingly are blaming him. The tracks are losing money, and fans are staying home.

True, there's been a recession in America and a depression in racing since he became chairman and chief executive officer of Laurel and Pimlico race courses in late 1989. But the tracks have fallen behind national growth rates in both betting and attendance.

Now De Francis is making what might amount to a bet-the-farm wager on advanced technology, a bold initiative that not only will change forever the face of racing in Maryland, but also likely will establish 1993 as a turning point for a major local industry and Joe De Francis.

While other tracks dabble in telecasting races or opening betting-only parlors in nearby towns, he is jumping in with both feet. When he is done, Maryland's tracks will be on the leading edge of a transformation that is replacing live, mud-splattered racing with television monitors.

Local fans already are seeing changes in the game, and more are coming. Players who once satisfied themselves with nine races a day at two tracks soon will have almost 10 times that many and a network of wagering parlors around the state.

In addition to live races, there is an almost non-stop, daylong series of televised simulcasts of harness and thoroughbred races from around the country with a sophisticated computer network blending the wagers into a single pari-mutuel pool. Telephone betting might follow, possibly in coordination with a cable television program.

If his gamble pays off, De Francis will have silenced his critics and come to be viewed as a savior like his late father, Frank De Francis, the back-slapping deal-maker whose razzmatazz brought riches and national acclaim to Maryland racing during the 1980s. If he fails, the younger De Francis may come to be remembered as the man who led the state's 300-year-old thoroughbred industry to an ignoble end.

"This is a watershed year, no doubt about that," De Francis said. "This industry right now can go either way. If this works, then we are headed for a new age of prosperity. If this doesn't work, then we are clearly headed for the shoal."

Many people think the local industry is already on such a course. In De Francis' first full year as owner, 1990, the tracks set all-time highs in attendance and wagering. Since then, however, attendance has dropped by 11 percent and wagering by 14 percent. That compares with a national decline of 8 percent in attendance and an increase of 2 percent in bets. The two tracks, burdened by heavy debt payments, have not earned a combined profit since 1988, losing $750,000 last year.

Purses -- the winnings distributed to horse owners -- fell 16 percent at Pimlico and Laurel from 1990 to 1992, due in part to a cut in the number of races. That compares with a decline of slightly over 1 percent nationwide in the same period.

Time is running out for De Francis to reverse those statistics: The fight with track co-owners Bob and Tom Manfuso is heading for a showdown in court and $33.4 million in loan payments to First National Bank of Maryland come due in 1996 and 1997.

Signs of promise

The technology still is being phased in, but there are some promising signs: In the first few weeks of expanded simulcasts, betting at the tracks or telecast locations rose by more than a third compared with the same period a year ago. It's too soon to estimate, however, the impact on track profits that will depend on the mix of live and telecast races fans are putting their money on, but De Francis is encouraged so far.

If Maryland's program works, it will produce a chain reaction of growth every bit as dramatic as the downward spiral the industry finds itself in, said De Francis. Extra races and players will mean more betting and higher purses, which will lure more and better horses, which will attract more fans, whose extra betting will mean still higher purses, which will attract even better horses . . .

Along the way, the tracks and horsemen, who split evenly about 17 cents of every dollar bet, will return to prosperity.

The changes do two things. By making it possible to bet at other facilities, Pimlico and Laurel will make it easier and cheaper for fans to play the game -- essentially taking the track to them. And adding telecast races will reduce the interludes between races, jazzing up the day.

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