The president of Maryland's major thoroughbred racetracks says his multi-million-dollar plan to rejuvenate racing can be accomplished with a mix of track money, state loans and a diversion from the winnings paid to bettors.
"I want to be real clear. We're not seeking to have the taxpayers pay for one penny of this," said Joseph A. De Francis, president of the Maryland Jockey Club, corporate parent of Pimlico Race Course and Laurel Park.
Details of funding are still being worked out, but De Francis said he envisions a blend of jockey club money and low-interest state loans and bonds. They would be backed by a temporary increase in the "takeout" diverted from wagers. That amounts to a user fee paid by the fans, De Francis said.
De Francis, who yesterday released the state-mandated plan to upgrade the tracks' marketing, management and facilities, said the whole program will cost about $60 million over five years. That includes the renovation expenses, capital improvements, increased promotional spending and the addition of three off-track wagering facilities.
The plan was submitted yesterday to legislators. Based on their comments, Gov. Parris N. Glendening will decide whether it meets the requirements of a law that ties its approval to release of $10 million in taxpayer subsidies to racing purses.
The plan calls for spending $18.2 million rehabilitating Pimlico, $16.8 million on Laurel, $5 million on upgrading the four off-track-betting parlors and opening at least another three.
For marketing, $2.5 million a year above current levels would be spent, for a total of $12.5 million over the five years. That would go for the hiring of a "senior executive" and support workers, a new director of customer service, fan education programs, "image" advertising, and possibly dropping admission and parking fees.
De Francis proposes that the jockey club would pay $8.3 million out of its own resources in the first year. During the five years, the jockey club would spend $27.5 million.
The jockey club would apply for a $5 million Maryland Industrial Development Financing Authority loan to cover the off-track wagering improvements, to be repaid out of expected increases in off-track revenue. Revenue bonds would be used for the balance, and would be paid back through a temporary, 1.5 percent increase to the takeout.
Currently, 17 percent of the money wagered on the most common types of bets is diverted to the tracks, purses, state tax, and a Maryland breeding promotion fund. The other 83 percent is returned to the winning betters.
Under De Francis' proposal, only 81.5 percent would be returned to bettors until the bonds are repaid. Also, revenues that generally flow to the state treasury from the tax on wagers, licensing fees, and uncashed winning tickets would be put up as collateral. But this money would only be used to back the bonds and is expected to remain in the state treasury, De Francis said.
Pub Date: 6/15/99