ANNAPOLIS – Maryland’s horse racing industry needs to find long-term solutions to its financial woes, not just fiscal “band- aids,” industry insiders told members of the General Assembly Wednesday.
Short-term revenue boosters don’t tackle the root problems that are driving the racing industry to its grave, according to a study presented to the commission by Arthur Johnson, a professor of political science at the University of Maryland Baltimore County.
Maryland government needs to create a new infrastructure for the industry — including publicly owned racing facilities and an interstate consortium of track owners, Johnson argued.
“We are moving this way already,” Johnson said. “I’m suggesting perhaps the government should take the lead.”
Johnson made his recommendations before the Commission to Study Ways to Improve the Financial Viability of the Horse Racing Industry, which was set up by the Legislature after debate last session over how to address horse racing’s problems.
Meanwhile, industry insiders testified that the use of slot machines at Delaware racetracks has given those tracks a competitive advantage over Maryland’s.
“What has tilted the playing field in horse racing has been the introduction of slot machines in Delaware,” said Joe De Francis, president of the Maryland Jockey Club and owner of Pimlico and Laurel Racetracks.
In fact, the addition of slots nearly tripled the $10 million annual purse that Delaware tracks were able to offer, said Bill Rickman, who owns and operates the Delaware Park racetrack just south of Wilmington.
“We were not profitable prior to slots,” he told the commission. “We would not have survived without them.”
Without a similar infusion of revenue, Maryland’s industry risks losing customers and “show” (prime quality horses, trainers and jockeys) to tracks with more prize money to offer, said Wayne Wright, president of the American Thoroghbred Horseman’s Organization.
“We need a tremendous, tremendous jolt to get the industry going again,” he said. “There really is no alternative.”
Although several testifiers pressed the commission to consider adopting slots at Maryland tracks, commission Chairman Eugene A. Conti Jr. said Gov. Parris N. Glendening already had ruled that out. Consequently, the industry needs to find alternative forms of financing, said Allen Foreman, general counsel of the Maryland Thoroughbred Horseman’s Organization.
One such alternative, Foreman said, is interactive gaming, a cable television betting system which allows individuals to phone in wagers on televised races. This technique, pioneered by a company called On-Demand Services, generated $100 million in revenue for Pennsylvania racetracks, Foreman said.
But Foreman agreed with Johnson, the UMBC professor, in arguing that since the gambling aspect of horse racing is so heavily regulated by the state, state government has an obligation to give financial assistance.
Foreman said a $5 million subsidy program set up by the 1997 Legislature was very helpful to Maryland tracks and should be extended in future sessions.
“Last winter and this spring, we were paying $160,000 per day in purse,” he said. After the subsidy, “we were up to $180,000 a day.”
The increased prize purse drew more horses and riders to Maryland tracks, he said, adding, “If nothing else of consequence can be done, keep the grant coming.” The commission’s next meeting is Sept. 30 at 10:00 a.m. It will submit a formal report of its findings to the Senate Legislative Policy Committee, the Senate Finance Committee and the House Ways and Means Committee on Nov. 1. -30-