While Penn National's racetrack strategy is a "long-term play," Carlino said, the company will not continue to operate the tracks at a loss. As a result, Penn plans to cut costs at its tracks.
"We will be very tough and brutal about that because we have to," he said. "We're not running a public charity. We have made those statements publicly. We're going to right-size those businesses over the next year or so because we must."
Efforts to significantly reduce the number of live racing days at the Jockey Club properties late last year were met with what Carlino described as a "violent reaction" from regulators and horse owners, breeders and racing supporters. MI Developments, a Canadian real estate development company, is the Jockey Club's majority owner.
O'Malley broke an impasse by negotiating a last-minute deal that allows the Jockey Club to continue year-round racing, at least for 2011. The horsemen and breeders associations agreed to contribute $1.7 million while the state is providing $3.6 million from its slot program.
Despite Penn National assurances, the company's actions did not endear it to owners and breeders who accused it of trying to kill Maryland racing to prop up its Charles Town casino and racetrack. Some racing boosters called for Penn National to sell its stake in the Jockey Club.
Maryland lawmakers have expressed frustration over Penn National's role in the Jockey Club's campaign to block construction of the casino at Arundel Mills. Lawmakers also have criticized what often appeared to be a fractured relationship between Penn National and MI Developments.
But opinions differ widely on the future of the state's gambling program.
House Speaker Michael E. Busch, an Anne Arundel Democrat, said recently that he thinks any gambling expansion would likely take place next year. Senate President Thomas V. Mike Miller, a Prince George's Democrat, has been more supportive, including for expanded gambling at Rosecroft.
O'Malley wants to focus on ensuring that slots facilities are in operation at each of the state's five approved locations before discussing any expansion of gambling, said spokesman Shaun Adamec. In summer discussions with lawmakers, the governor would revisit a state law that limits a casino operator to one license and seek ways to make the approved slots sites in Baltimore and Rocky Gap in Western Maryland more attractive to potential bidders, Adamec said.
Penn National faces hurdles to putting slots at Laurel Park and Rosecroft. Adding new locations to the state's slots program would require passage in a referendum to change the Maryland Constitution.
State Sen. E.J. Pipkin, an Eastern Shore Republican and the new minority whip, said he plans to introduce legislation Monday to preserve the gambling program but remove it from the state Constitution so that modifications such as new casino sites or the addition of table games could be made more easily. Such legislation would likely require voter approval in a referendum.
"If we want Maryland to be competitive and Marylanders to have the best opportunity to generate the most revenue, you have to make it more flexible," Pipkin said.
Despite the uncertainty surrounding any expansion of gambling in the state, Penn National appears resolute in sticking around to see what happens.
"But we can make no prediction about how and when, or if, anything positive will happen," Carlino said.
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