Pimlico, Laurel post rare combined profit

March 16, 1995|By Jon Morgan | Jon Morgan,Sun Staff Writer

Marylanders, faced with more gambling opportunities than ever before, are betting on thoroughbreds at a furious pace, raising hopes that the state's long-suffering racing industry is on the mend.

Figures for last year and the beginning of this year show a double-digit jump in wagering, mostly on out-of-state, simulcast races newly available to local bettors. And the Maryland Jockey Club, corporate parent of Pimlico and Laurel Park race courses, announced yesterday its first combined profit in seven years.

Track officials celebrated the figures as both a turning point and a vindication for their heavy emphasis on electronic and off-track betting. Others, however, say more needs to be done for fans and horse owners before the tracks can be taken off the long-term critical list.

Total wagering at Maryland thoroughbred racetracks and off-track parlors totaled $461.5 million last year, a 16 percent improvement from the previous year. The increase, and a robust Preakness Stakes day, pushed Pimlico into the black for the first time since 1989, with a profit of $1.8 million.

Laurel, which lacks a major event like the Preakness, posted a loss of $609,894 for 1994. The tracks combined produced a profit of $1.2 million, a significant improvement from 1993 when they lost $7.2 million. About half of 1993's losses was attributed to one-time charges such as a settlement among bickering track investors.

In just a few years, the number of thoroughbred wagering outlets has increased from two to eight, including four off-track betting parlors and cooperative agreements with a pair harness tracks to accept bets on the thoroughbreds. Also, bettors now have their choice of races being run at five other tracks across the country.

This, and the transmission of Maryland's signal to tracks across the country, has increased the state's betting handle by almost 25 percent since 1992 and apparently stanched the bleeding of one of Maryland's oldest industries.

"We're pretty happy about it," said Joe De Francis, Maryland Jockey Club president. Last year's profit was the first since De Francis took over the tracks in 1989, a period during which they have lost nearly $10 million.

"The 1994 results represent a turning point," De Francis said. He predicted that Laurel would be profitable this year, the first time that track would be in the black since 1987.

John H. Mosner Jr., a member of the Maryland Racing Commission, said, "It's been a tremendous turnaround, but $1.2 million, while a positive step, by no means means they are out of the woods. You need to generate reliable earnings year after year.

"People in all aspects of racing need to remain diligent and not rest on their laurels," he added.

Like tracks nationwide, the Maryland race courses have been hampered in recent years by a weak economy, heavy debt and competition from lotteries and other forms of gambling.

But last year the economy strengthened, and the Preakness attracted a record crowd and betting. Also helping the tracks: renegotiated loans that saved the company about $800,000 in interest, and requirements by the lender to cut the salaries of top executives, including De Francis.

De Francis, criticized for taking more than $700,000 in compensation in 1993, took no pay last year but said he hopes to this year.

But the bulk of the credit goes to an increase in betting, brought on by the expansion in wagering outlets and successful introduction of simulcasts. So far this year, betting in the state is running about 20 percent ahead of the same period last year, a fact attributable in part to the mild weather this year and harsh weather last year.

"Obviously, the figures are very positive when compared with last year and even when you look at the last 10 years. But there are still some issues that need to be addressed," said Malcolm Commer, an agricultural economist/equine specialist at the University of Maryland agricultural marketing center in Queenstown.

Among the topics he said he thinks need watching: the threatened introduction of casino gambling in the state, the success of the Maryland Jockey Club's initiative with Virginia track operators, and making the sport and tracks more family-oriented to attract new fans.

About half of the thoroughbred dollars bet in Maryland last year ++ were on out-of-state races, up from about 30 percent the year before.

Such trends can be worrisome because the fees paid to the out-of-state tracks make simulcasts less profitable than live races. Last year, the tracks paid more than $11 million in fees, up from $5.5 million in 1993. But if overall betting increases enough to make up the difference -- as it did last year -- then there should be no problem, Commer said.

De Francis said, "I'd rather have the dollar bet on a Maryland race than Santa Anita. But I'd rather have it bet on Santa Anita than not bet at all."

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