LAUREL – The Maryland Racing Commission Thursday again balked at approving a plan by Magna Entertainment Corp. to sharply cut back live racing in Maryland, and urged the company to work with the state’s horseman to come up with a plan acceptable to both sides.
In refusing to approve the Magna plan for the second straight time, the commission said that the company’s 2002 contract with the state committed it to putting on five days of live racing a week. The Magna plan, itself a revision of its original proposal to reduce live racing in the state, provided only for four days.
Magna’s lawyers sharply disagreed with the commission’s interpretation of the contract. “With all due respect to counsel,” said Marty Jacobs, lawyer for Magna, “I don’t think you could have a worse interpretation” of the 2002 contract, which he said precluded Magna from racing more than five days a week without approval.
But the racing commission, as well as lawyers for the Maryland Thoroughbred Horse Association, said that minutes and tapes of the contract signing in 2002 show that the intent of the contract was to guarantee at least five live days a week and prevent “extended periods of dark time in Maryland racing,” in the words of Assistant Attorney General Bruce Spizler.
Magna shook the Maryland racing industry last summer when it proposed sharply cutting back the number of live racing days at Pimlico and Laurel – in all, to about 112 – and also selling off its training facility at Bowie. The company says that its Maryland racing operations are unprofitable and it needs to find a way to increase purses to keep good horses from going out of state. Opponents of the Magna plan see it as nothing more than a way of pressuring the state to approve slot machine gambling for Magna’s Maryland tracks.
The commission refused to approve the Magna plan at its September meeting, and hinted that it wanted Magna to make revisions. The company presented a new plan Thursday which called for 129 days of live racing – 17 more than the original proposal – but that, too, was found wanting by the horsemen.
“I quite frankly thought we had made enough progress,” said Alan Foreman, lawyer for the horsemen. “I was surprised to see this agreement come across late yesterday afternoon. It’s not something we discussed.”
After the meeting, incoming Chairman John McDaniel said that contractual issues were not the only reason for the commission’s refusal to approve the plan for the second straight time. “We did consider other factors,” he said, such as the need for further discussion between the two groups.
Outgoing Chairman Thomas McDonough said, “I fully expect Magna and the Maryland Jockey Club to submit a new proposal.” And he urged the corporation to meet with the horsemen to “construct a plan that everyone can live with.”
Commissioner John Franzone scolded Joe DeFrancis and Magna representatives for not having done that earlier.
“You don’t formulate a plan jointly. You (the corporation) formulate a plan and drop it to them,” Franzone said.
But Magna’s executive vice president and CEO, Don Amos, said the revenue pie is shrinking and the horsemen are not acknowledging the full spectrum of issues.
“It takes two parties to agree you have a problem,” Amos said. “And one party doesn’t think you have a problem; you’re not going to come to a mutual resolution.”
Now they have another month to find common ground.
After the meeting, DeFrancis said that the industry is in a “far different and more dangerous world than ever before.” He again cited the sale and pending development of Churchill Downs’ Hollywood Park, which was sold to a housing developer for $260 million and, if slots gambling is not passed in California in two years, will no longer be the “track of movie stars.”
But Foreman told the commission that they “would have lost whatever moral authority it might have had” if it approved Magna’s plan. “We cannot allow Magna to dictate to this industry,” Foreman said. “There are steps that can be taken…to help us get this legislative problem solved. We cannot do it with a 112 day racing plan or a 129 day racing plan.”