With an unabashedly grand corporate name and equally grand plans to promote Maryland horse racing, Magna Entertainment Corp. arrived three years ago hailed by some as a savior of the state's ailing thoroughbred industry.
Now, not only is Maryland racing still struggling, but the once-deep-pocketed Ontario-based company that was launched five years ago with nearly $500 million in investment money is facing severe financial problems and is in need of a cash infusion itself.
Some racing industry figures believe that the money problems faced by Magna Entertainment, which runs 13 race tracks in North America and Europe, could have disastrous implications for the state's thoroughbred business - namely, the loss of the Preakness Stakes, the second jewel in racing's Triple Crown, set for its 130th running tomorrow at Pimlico Race Course. Should that happen, the state's two thoroughbred tracks would also be in jeopardy, despite the state's traditional standing as a racing stronghold.
Meanwhile, some opponents of what Magna Entertainment says is the answer to its problems in Maryland - slot machines - insist the racing industry has itself to blame for its woes and now seeks a jackpot bailout.
"When [Magna Entertainment] came here, they said they were going to build up the racing industry and that they didn't need additional revenues to do it," said Maryland House Speaker Michael E. Busch, who has resisted slots. "Now they're saying, `We should be entitled to slots because we have a failing business.'"
Racing leaders have worked behind the scenes to hint that this could be the last Preakness, a threat Magna has not made directly and publicly.
Tom Bowman, a former president of the Maryland Horse Breeders Association, said the prospect of the company moving the Preakness to another of its tracks, such as Florida's Gulfstream Park or California's Santa Anita Park, is real.
"I have a fear that [the upcoming Preakness] will be one of the last," said Bowman, who is also a Chestertown race horse owner and veterinarian.
"I think that Magna will make a move to be responsible to its shareholders," he added, "and it won't be a move popular with the horse industry in Maryland."
Magna officials have avoided explicitly threatening to move the Preakness, while also acknowledging that the company faces enormous pressure from restless investors. Magna Entertainment has lost nearly $220 million since 2002.
