State tracks are prospering Horse racing: Despite the threat of doom, Maryland withstands the advent of Delaware slots.

August 16, 1996|By Jon Morgan | Jon Morgan,SUN STAFF

Betting is at record levels. Profits are up. And the popularity of Maryland racing among out-of-state customers -- a crucial constituency in the new world of electronic wagering -- never has been higher.

Can this be the same industry that now says it is doomed by Gov. Parris N. Glendening's decision to block casino gambling at the racetracks?

No doubt the long-term future is murky for the state's storied thoroughbred industry. The tracks have failed to attract new fans and are running out of ways to squeeze money out of existing bettors. A potent competitor has emerged just over the border: Delaware Park, fortified with millions of dollars from newly legalized slot machines.

But many of the traditional measurements of racing health in Maryland are on the upswing or at least holding steady. And the predicted catastrophe from Delaware's slots has not yet materialized, and some say the threat is exaggerated.

In fact, unlike at other junctures when the tracks have won concessions from the state by demonstrating hardship, this crisis comes at a time of relative prosperity for racing.

But Pimlico Race Course and Laurel Park president Joseph A. De Francis, whose stewardship of the tracks has drawn criticism, says his current run of good luck can't last and he needs urgent state aid.

"You have to look over a longer horizon than just last year. If you look back at a seven-year period of our history, it's marked by wild swings. We were on the verge of bankruptcy in 1993," De Francis said.

Not so last year: The Maryland Jockey Club, operator of Pimlico ** Race Course and Laurel Park, reported record revenues and wagering totals. The combined profit of the tracks -- $4.1 million -- was the highest since their ownership was merged in 1987.

"I see the financial conditions of the tracks as having improved a lot. Last year's financial results showed a definitely improved situation," said John Mosner, a retired banker and long-term chairman of the Maryland Racing Commission.

Mosner, who has retired from the racing commission, said Delaware is a threat. But the tracks have regained their footing from a disastrous period early in the decade during which they lost $10 million, he said.

The improved results are due to a vast technological expansion that has brought more racing to more fans, chiefly through televised "simulcasts." Maryland race fans now have their choice of betting on 11 live races and 50 or more simulcast races a day beamed in from tracks across the country. Because the tracks take a cut of each bet, more betting means more money.

Maryland's races are now also being beamed to other tracks, bringing back money for Pimlico, Laurel and local horse owners. And a network of five off-track betting parlors from Frederick to Cambridge and now Virginia has opened over the past three years.

No impact from Delaware

From a financial standpoint, the changes, combined with an improved economy, have been akin to hitting the daily double: Since 1993, the tracks' revenues have increased 17 percent, betting has soared 19 percent and operating income has gone from a loss of $3.46 million to a profit of $6 million.

Of course, Delaware Park, a former lightweight among the region's racetracks, didn't open its mini-casino until Dec. 29, or begin its horse racing meet until April 13. And it operated at half-speed for a couple of months, not hitting its legal maximum allotment of 1,000 video gaming machines until July 13.

But at the completed meet most directly affected -- Laurel's June 15 to July 21 summer session -- the amount of money bet was up slightly from the year before and average daily wagering was up more than 7 percent, according to figures released by the tracks.

Overall this year, the average daily handle of bets placed at the state's tracks and off-site wagering parlors is virtually unchanged from last year's record pace.

"Right now, so far, we haven't seen any significant decrease in business" at Maryland's tracks, said Kenneth A. Schertle, executive director of the Maryland Racing Commission.

The handle figures don't include one of the brightest spots for Maryland racing: a big jump in wagers placed on telecast versions of its races by out-of-state gamblers. That "export" business is up about 50 percent, to $166 million, through mid-summer.

De Francis says the exports have made up for drops in admission and a pronounced shift from live handle to simulcast racing, which is less profitable. Total revenue this year is running about even with last year, and he thinks the tracks will show a profit for 1996, although it's running about $1.5 million less than at this point last year, he said.

This year was hurt by the loss of seven days to snow last winter, something he earlier estimated cost about $1 million.

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