Racing deal innovative but risky

October 14, 1994|By Jon Morgan | Jon Morgan,Sun Staff Writer

Merging with Virginia's start-up thoroughbred track could be the lucrative boost Maryland's beleaguered racing industry needs, but the innovative venture will have to overcome obstacles that have proved ruinous to most recent attempts to expand racing.

Only a handful of states have tried to add pari-mutuel horse racing over the past decade, and the record has been remarkably poor. Tracks in Texas, Minnesota, Alabama and Kansas have all stumbled out of their starting gates, unable to pry dollars and fans away from lotteries, casinos and other diversions.

But Virginia hopes to avoid that fate through a pioneering agreement with Maryland's Pimlico and Laurel racetracks.

Under the alliance with Laurel and Pimlico owner Joseph A. De Francis, the Maryland tracks will close to live racing for four months in the summer, beginning in 1996. Fans will be left to bet on televised "simulcasts" of races run elsewhere, including the new Virginia track, to be built southeast of Richmond.

When the Maryland tracks reopen, the Virginia facility will close and its network of a half-dozen off-track betting facilities across the Old Dominion will carry the Maryland signals for free, as well as other races.

This allows both states to avoid a cross-border war for fans and horses. But it also leaves a lengthy gap in Maryland's racing schedule, ending a tradition of year-round racing begun in 1974.

Supporters of the idea say it represents an acknowledgment of the realities of modern economics, as well as a unique opportunity for Maryland racing to reach 6 million Virginians.

And the return of limited meets, with "opening day" ceremonies, should bring an element of exclusivity back to racing in Maryland.

"I've always thought the idea of seasonal racing would be better.When I was a kid, the opening of Pimlico meant spring," said ABC broadcaster Jim McKay, who raises racehorses at a farm in Monkton.

Critics say the plan amounts to unilateral disarmament for Maryland, and worry about a ripple of lost revenues for the tracks, track employees, state coffers and related businesses if the enterprise does not go as planned.

"This is devastating, and I cannot believe that the people that are guiding Maryland racing are considering this," said Chick Lang, a racing consultant and former general manager of Pimlico.

"If they think for a minute that these horsemen here are going to van down to Richmond to race when they can go to New Jersey for purses that are far greater, they are crazy. I don't know if Virginia will support major-league racing," Mr. Lang said.

But Mr. De Francis said he had little alternative when faced with the possibility of a competing racetrack or off-track wagering facility looming to the south, siphoning off revenues from Northern Virginia.

"This Virginia project is going to be critically important to the financial success and well-being of Maryland racing," he said.

He predicts that total betting, or handle, will grow as Virginians get into the game. Profits for Laurel and Pimlico, which lost a combined $7.2 million last year, should also grow, as will the purses paid out to winning horses. This will result in more breeding, and more horses for races.

Mr. De Francis' management team will run the live meet in Virginia and will receive 2 percent of the handle there as a management fee. The tracks get about 7.5 percent of the handle on races run or simulcast in Maryland.

Mr. De Francis acknowledged that there would be a likely loss of admission, concession and parking revenue during the summer months. And he makes less money on a televised race than a live one. But he's convinced that the new money coming in from Virginia will more than make up the difference and catapult the combined circuit into the upper echelon of American racing.

The Maryland Racing Commission has been supportive of the venture, although Commissioner John H. Mosner Jr., a retired banker who heads a committee examining the troubled finances of the Laurel and Pimlico, said he will have plenty of questions when the matter comes up for review.

"I've looked doubtfully at the whole Virginia thing," he said. "I don't know what the effect will be on Maryland. There's not a betting culture in Virginia, I just don't think the people in Virginia are going to bet at the rate that will make this thing work."

Although it has an active breeding industry, Virginia was without pari-mutuel betting in modern times until it was legalized by referendum in 1988. There have been steeplechase meets with wagering since then, but full-blown thoroughbred racing will be a new experience for Virginians.

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