Upscale York OTB is off, running

March 30, 1995|By Ross Peddicord | Ross Peddicord,Sun Staff Writer

YORK, PA. — YORK, Pa.-- A lavish off-track betting parlor, one of the most well-appointed pari-mutuel facilities in the mid-Atlantic region, opened here last week and is spurring Maryland racetrack operators to accelerate efforts to open an upscale facility at the Maryland State Fairgrounds in Timonium.

Laurel/Pimlico president Joe De Francis said he is fielding telephone calls from local fans who are discovering the York facility.

Towson attorney Mo Balser, a horse owner as well as a fan, said that after one trip to the York OTB, he is considering changing his race-going habits.

"It is such a nice place that I don't even really care about the 45-minute drive to get there," said Balser, who lives across the street from Johns Hopkins University. "Where else am I going to go? Pimlico, at night, is in a questionable neighborhood. I can make the drive to Laurel. But if I do that, I might as well take an extra 10 minutes and go to York and have all the creature comforts."

Philip T. O'Hara is vice president and general manager of Penn National Gaming, the company that operates the York OTB and two other off-track wagering facilities in Reading and Chambersburg as well as Penn National Race Course near Harrisburg.

He said the York-Lancaster area has a population of about 750,000, large enough to support the York outlet and possibly a new one that could open in Lancaster later in the year.

"We're not counting on the Baltimore market and haven't even figured the area in our marketing surveys," O'Hara said. "If we wanted to raid Maryland, we would have opened the parlor in Shrewsbury [three miles north of the Maryland line] and not in York."

In York, Penn National spent $2.5 million to renovate the 25,400-square-foot space formerly occupied by a Burlington -Z Coat Factory outlet in the Manchester Crossing shopping center.

Comments such as Balser's are prompting De Francis to expedite negotiations with the Maryland State Fair board, De Francis said.

"We've reached a nuts-and-bolts agreement, but we haven't pinned down where and how we're going to build our facility," said Timonium's vice president and general manager, Howard M. "Max" Mosner Jr. Timonium will operate its facility in partnership with the Maryland Jockey Club, which owns Laurel and Pimlico racecourses.

"We're doing an evaluation of what kind of money we're going to spend, probably in the $1.5 to $2 million range," Mosner said. "But we don't know if we're going to renovate the second floor of our grandstand, which presents heating problems, or the first level of the grandstand. Or if we're going to build an entirely new building or hook on a two-level facility to the north end of our current grandstand. We're getting closer to what we're going to do. But we haven't made a deal yet."

De Francis said that facilities such as York represent "serious" competition. Already the Maryland OTB outlet at the Cracked Claw near Frederick competes with the Charles Town (W.Va.) Races, and the Poor Jimmy's outlet near Elkton competes with Delaware Park.

Each has developed its own clientele and hasn't been devastated by nearby tracks, although the Cracked Claw is vastly more successful than Poor Jimmy's.

"But still you feel the impact even if it's a 5 to 7 percent effect on the handle [amount wagered]," De Francis said.

Unlike Maryland, where an unlimited amount of parlors can be built, each Pennsylvania track now has the authority to operate six outlets. Also unlike Maryland, where the majority of outlets are owned by individual owners with the tracks receiving a percentage of the proceeds, the tracks own the OTB outlets in Pennsylvania.

Maryland thoroughbred tracks are heavily in debt, and state harness tracks are nearly bankrupt. They don't have the money to build opulent facilities.

A couple of years ago, Penn National was floundering before the advent of its off-track system. But last year, the company posted net income of $2.8 million, up 50 percent from 1993, and purses have risen from a $38,000 daily average in 1991 to the current level of approximately $52,000 per day.

"And we just raised them again another 5 percent," said Fred Lipkin, Penn National's director of publicity.

"Opening the Reading outlet [in 1993] stabilized us and then we added Chambersburg," O'Hara said. "The secret to our success has been adding opportunities that produce an extra $28,000 to $35,000 in daily handle and before you know it, all the little figures add up into a significant sum."

In order to go more upscale and open its most ambitious outlet in York, Penn National raised money with a public stock offering last May.

"That enabled us to pay off our debt and put cash in the bank," O'Hara said. "That's allowed us to open the York outlet, and we've also got enough cash in the bank to open another facility this year, possibly in Lancaster."

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