Archive for the ‘Maryland Horse Industry’ Category

By Ray Paulick
If anyone can explain the confusing situation in Maryland regarding slot machine revenue to horsemen and the future ownership of the Maryland Jockey Club racetracks—Pimlico and Laurel Park, owned by Frank Stronach’s bankrupt Magna Entertainment Corporation—I figure it’s Richard J. Hoffberger. A longtime owner/breeder and operator of the equine specialist Hoffberger Insurance Group, Hoffberger has been president of the Maryland Thoroughbred Horsemen’s Association since the group’s formation in 1987.

The Paulick Report caught up with Hoffberger on the road this week somewhere between Baltimore and Philadelphia Park to get an update on the challenging circumstances the Maryland racing and breeding industry is facing, with increasing competition from slots-rich states all around: Delaware, Pennsylvania and West Virginia.

What is the general feeling of Maryland horsemen right now?
Certainly there is a feeling of why didn’t we do this a long time ago? Fifteen years ago I stood at a podium talking to the press and introducing the concept of slots at Maryland racetracks. We said we would send $100 million to $150 million in tax revenue to the state each year and help save the Maryland horse industry. Using the conservative figure of $100 million a year, that was $1.6 billion ago. The state needs the money and the horse industry is in dire straits.

It’s typical political wrangling and it’s happening in too many states on too many issues. I don’t think anybody in today’s world would argue health care doesn’t need reform, but how do you do it? Nobody has really argued that slots at the racetracks is a bad idea, but how to you do it? It’s not just us: Kentucky, New York and some other states are going through the same thing. There is definitely a feeling of frustration.

Does the Maryland THA have a preference among the six groups eligible to bid on the Maryland Jockey Club tracks in the bankruptcy auction that’s been delayed several times and is now scheduled for March 25?
We hope a scenario exists where there can be slots at Laurel. We’ve always wanted slots at the racetrack. Our philosophy and desires are unchanged. We want somebody who wants to run races. We are in the racing business and we want somebody who wants to run races. We never contemplated slots would not be at the racetrack (the Arundel County Council approved a plan putting slots at the Arundel Mills Mall and not at nearby Laurel Park). If slots are at the track, they would be required to run 220 days of live racing a year, or less with agreement of the horsemen. But if there are no slots at the track, that provision doesn’t apply.

What is happening with slot machines throughout the state, and in particular Anne Arundel County, where there’s a petition drive to overturn the council decision?
The way it works in Maryland, slots revenue to the horse industry is not location specific. Two locations, in Cecil County and Ocean Downs, will probably be the first of the five specific locations approved for slots to open. The split going to purses is the same irrespective of location. The problem is if the racetrack operator can’t make any money, we could have the scenario of cash available for purses but not have any place to run. That’s the big fear.

Theoretically, higher purses attract better horses and create better wagering opportunities, driving up handle. Could that apply in Maryland if the tracks don’t get slots?
Throughout the U.S. in the last 20 years we haven’t found a scenario where tracks can compete favorably with slot machines. The biggest example is what happened in Illinois when (Richard) Duchossois spent all that money to rebuild Arlington Park and is struggling because of the riverboat competition and actually closed down for a while.

So what’s up with the petition drive to overturn the county commission’s zoning approval for slots at the Arundel Mills Mall?
The law in Anne Arundel County not specific to slots says if the zoning board, the county commission, passes a zoning law, then the citizens have the right to overturn the zoning approval with a petition signed by 19,500 people within 40 days of the zoning regulation being signed into law. It then it goes to a public referendum. Approval of slot machines is predicated on zoning approval. When Arundel Mills got zoning approval, there was a move afoot to overturn the ruling. Enough signatures appear to have been gathered; approximately 40,000 have been submitted though not yet approved. Any referendum would be in November.

If the zoning decision is reversed in Anne Arundel County, the whole bid process starts again, and somebody else has to apply for zoning. It’s back to square one.

What impact does the Anne Arundel situation have on the value of the Maryland Jockey Club tracks and the potential auction?
Obviously if the potential for slots existed, assuming that Arundel Mills gets knocked out, then the possibility exists for them to go back to Laurel. You don’t have to be an economist to see the value of the property goes up. It’s a gamble. But every business is a gamble.

When horsemen do get benefits from slots revenue, how much of a difference could it make to purses?
Assuming the Baltimore City and Anne Arundel County locations are up, we could be looking, by the time the machines are mature, at $70 million to purses each year. That’s the maximum. We could be looking at $100 million a year in total purses in Maryland.

What do you think is going to happen to Pimlico and the Preakness?
I think they’ll stay. Pimlico and the Preakness is a money maker. If you won Pimlico in a poker game this afternoon, you’d be the happiest guy in the horse business.

Have the delays and uncertainty damaged Maryland’s breeding industry beyond repair, or can it bounce back?
Look at what happened in Pennsylvania. That came on pretty quick. Can we bounce back? Yeah. Have horse will travel. We tell politicians it’s very easy to put horses on a van. We talk about the Baltimore Colts packing up everything in a moving van and leaving in the middle of the night. The difference is, in the horse industry, you can ship five mares a day, and in 100 days you’ve lost 500 mares. Your breeding industry is dead.

The key in Maryland, everybody in the horse industry wants to see what happens with the auction of the tracks. Is it going to get delayed again? Magna, in bankruptcy, has been running races, which is good. We’ll see who buys the tracks. There’s six groups putting in proposals, which is kind of like nominating for a stakes. Even if you won the lottery this afternoon you couldn’t become a bidder. Penn Gaming is a potential bidder. Who knows what they want to do. Cordish (which won the Arundel Mills Mall zoning approval for slots) is a bidder, and MID (Stronach’s MI Developments, which struck a deal in bankruptcy court to keep Santa Anita Park, Gulfstream Park, and Golden Gate Fields) is in there. It’s anybody’s guess, and I don’t even think the people bidding know how it’s going to end up. All those players say they are in it to get the job done.

Copyright © 2010, The Paulick Report

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Baltimore-based Cordish Companies filed a suit against Citizens Against Slots at the Mall, alleging their recently filed petition was ‘riddled with fraudulent signatures’. The petition was created to keep the developer from installing VLTs at Arundel Mills mall.

This issue created real controversy at the end of 2009 when the VLT license was given to the shopping center of Laurel Park, causing many Marylanders to feel duped by the recently passed law that was sold as aid to the racing industry.

Read it at the Baltimore Sun

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

A bill proposed by Democrat Frank Turner would reduce the percentage of proceeds set aside for slots to go to purses from 5.5% to 2%, capping supplements at $50 million.

Of course, this deceit would be easier to take if it were going to a great cause, but instead it is just to increase the Maryland lottery’s share for running the VLTs. Certainly, the lottery deserves compensation for its duties in this matter but that money is already built into the legislation that has already passed. Why would Turner be looking for more money to go in that direction?

Click here for the full article

Then come back to the Paulick Report and let us know what you think.

- Bradford Cummings

After last year’s approval for a 4,750 slot machine parlor at Arundel Mills Mall by the Arundel County Council, an anti-slot coalition is working to find 19,000 signatures for a petition to stop the development. This is certainly par for the course and a completely expected next step in this saga. However, the fact that the Maryland Jockey Club has gotten involved with helping this petition drive makes things a whole lot more interesting.

Is this "the enemy of my enemy is my friend" move on the part of the Maryland Jockey Club a well calculated strategy or a short-sighted reaction that will have negative consequences in the future?

Click here to read the Baltimore Sun article

Then come back to the Paulick Report and let us know what you think.

- Bradford Cummings

Baltimore Sun TV blogger David Zurawik compares those politicians that have okayed slots at Arundel Mills to Bob Irsay, the much-maligned former owner of the Baltimore Colts who moved the team to Indianapolis without warning.

Click here for the short but emotional response to the recent happenings in Maryland and then come back and let us know what you think.

- Bradford Cummings

The Baltimore Sun, after running an online editorial supporting the Arundel Mills slots parlor, has come out this morning and officially spoken in favor of the idea. Simply stated, "Anyone who wants to help the horse racing industry — or keep taxes low in Anne Arundel County — should oppose the petition to block slots at Arundel Mills."

But a reader named David seems to have put it best. "It makes no sense at all to have slots at a mall."

We probably couldn’t have said it any better.

Take the opportunity to read the entire editorial here and then check back with the Paulick Report and let us know where you stand.

- Bradford Cummings

Joining the fray by painting a dark and morbid picture of the Laurel Park situation, legendary turf writer Andy Beyer points out what not having slots will do to racing at one of Maryland’s historic tracks. Stating that "Laurel desperately needed slots because its horse racing business is no longer viable", Beyer lays out the reality that there may not be a buyer for the track if there are no slots.

Click here for the story and then come back to the Paulick Report and let us know what you think.

- Bradford Cummings

According to the the Baltimore Sun’s editorial board, fighting to have slots at Laurel Park over the current proposed site at Arundel Mills mall would actually be bad for racing. They claim that with 4,750 machines and potentially $100 million a year in revenue for Maryland’s racetracks, ‘the Arundel Mills proposal stands to pour a tremendous amount of money into the industry.

Click here to read the entire editorial and then come back to the Paulick Report to add your two cents worth.

- Bradford Cummings

After last night’s Arundel County council meeting, slot machines have been approved at the Arundel Mills mall. With many voters feeling hoodwinked and the racing industry understandably upset, Tom Chuckas, president of the Maryland Jockey Club, called this ‘a sad night for Maryland racing’.

But Chuckas is not giving up, joining forces with Stop Slots at Arundel Mills in an effort to gather enough signatures to halt the zoning bill and put the issue before voters next year.

Read the full story here and then come back to the Paulick Report and let us know what you think.

- Bradford Cummings

In an effort to fight for slots to be installed at Laurel Park instead of the proposed Arundel Mills Mall, the following email was sent to the Paulick Report this afternoon. Would this decision lead to the destruction of the Maryland racing industry or at least the closing of Laurel Park? We would like to hear your thoughts on the issue, especially from our friends in the Old Line State.

Additionally, if you feel called to do so, there is contact information for key legislators sitting on the Anne Arundel County Council.

Anne Arundel County Council vote is crucial to the future of Laurel Park, and probably Pimlico, too.

The Anne Arundel County Council is scheduled to vote on Monday, Dec. 21, on zoning for the Cordish Companies’ proposed slots site at Arundel Mills Mall, which means no slots at historical Laurel Park Race Track.

If the State of Maryland and its counties want to earn slots gambling money from lucrative Northern Virginia, Laurel is a far more accessible location to Virginians than Arundel Mills. It’s also closer to Washington, DC, and very close to Baltimore, as well.

Since Laurel, Maryland, is already a high density area and Anne Arundel Mills is not, more open space and farm land would be lost by the Anne Arundel Mills development. Additionally, I’ve been to Arundel Mills. It’s one of those discount shopping outlets in the middle of nowhere. Laurel has two major highways that access it — the Baltimore Washington Parkway, and I95.
 
Is it not obvious that if Laurel racetrack receives slot machines on site, Maryland racing will have access to far more money? Think concessions, whatever "management" or "leaseholder" fees go to the site. Capitol investment to build a better facility, a nice hotel and restaurants would, no doubt, be offered right and left.

And if your local Maryland horsemen and breeders don’t get more money from slots, Maryland farms will be sold as people move to more horse friendly states, like Pennsylvania. Serious losses will haunt Maryland’s breeding and racing industry — which, let’s not forget, along with the farms that grow horses, include hay farmers, feed sellers, veterinarians, tack shops, backstretch help, trainers, mushroom growers, and farriers, to name a few.

I’d like to think the quest for state dollars isn’t far more important to the Anne Arundel Country Council than posterity, and Maryland history.

The vote is expected to be a close one.

It is important for County Council members to hear from people in the Maryland breeding and racing industry. Also, anyone interested in conserving green space, farmland, and those people who simply love horses and racing, please contact these legislators!

PS: Why can’t a horseman from Kentucky or Florida who has been to Maryland races, or run their horses in Maryland contact these county council members? It’s your sport, too.

Following are e-mail addresses for Council members expected to vote on the zoning:

• Daryl Jones – District 1, daryl.jones@aacounty.org
• Ronald C. Dillon – District 3, rdillon@aacounty.org
• G. James Benoit – District 4, james.benoit@aacounty.org
• Cathleen M. Vitale – District 5, cvitale@aacounty.org
• Tricia L. Johnson – District 7, tricia.johnson@aacounty.org