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Maryland Legislature Approves Plan to Reform State Racing Industry

A bill to radically reform Maryland's racing industry has passed both chambers of the state legislature, with the House voting 105-32 Monday night to approve a project that will see among other things ownership of Pimlico Race Course transferred from 1/ST Racing and Gaming to the state and the establishment of a year-round training facility for Maryland's horsemen and women.

After the Maryland House of Delegates initially passed the legislation unanimously, the bill was subsequently amended by the Senate. This amended bill was then sent back to the House for Monday's concurrence vote.

The legislation will now go to the desk of Maryland governor, Wes Moore, for a final signature, with a veto seemingly unlikely.

“I've worked with governors going back to the mid- to late-1970s in Maryland, and most were very supportive of the industry in one shape or form. But Governor Moore was absolutely committed to this project. His support was instrumental in getting this passed,” said Alan Foreman, voting member of the non-profit Maryland Thoroughbred Racetrack Operating Authority (MTROA), about passage of HB 1524, otherwise known as “Pimlico Plus.”

The MTROA is an industry-led non-profit created last year by the legislature to essentially oversee and help facilitate the Pimlico Plus plan. Pending gubernatorial approval, the rollout of the plan will be a multi-year project beginning June 1, when the law goes into effect.

Among key provisions of the plan, the legislation requires the formation of a non-profit to manage daily operations of Maryland's new industry infrastructure. Those responsibilities are currently filled by the Maryland Jockey Club, owned and operated by 1/ST Racing. The MTROA will have ultimate oversight of this new entity.

“Like the [New York Racing Association] reports to the franchise oversight board, the entity to be created in Maryland will report to the MTROA,” said Foreman.

Though much-needed renovations to Pimlico could begin later this year, said Foreman, the 2025 Preakness is still expected to be staged at the Baltimore track, with the 2026 edition set to be hosted temporarily at Laurel Park.

“After Preakness 2025, Pimlico will undergo full construction, and the plan is that the 2027 Preakness will be at Pimlico under the auspices of the new non-for-profit.” said Foreman. “For the horsemen, racing will be conducted at Laurel for the next three years.”

Like Pimlico, Laurel is currently operated by 1/ST Racing under the umbrella of The Stronach Group (TSG). Transfer of Pimlico from 1/ST Racing to the state comes at a nominal one-dollar price-tag.

The MTROA has already negotiated a licensing agreement with 1/ST Racing to operate and promote the GI Preakness S. and the GII Black-Eyed Susan S., Maryland's two signature races.

“It's a 10-year agreement with five-year renewals,” said Foreman. “After ten years, if the state wanted to buy it out, it could. But any renewals would be for five-year intervals.”

Complementing a revamped Pimlico will be the selection of a year-round companion training facility to accommodate the horses not stabled at Pimlico. According to Foreman, some 1,300 horses are expected to be split evenly between the two facilities.

The MTROA has identified eight potential training facilities for purchase, rating them by several criteria, including their location, size, cost to purchase and cost of redevelopment. According to this rating system, two facilities come out jointly on top: Shamrock Farm and Mitchell Farm Training Center.

Shamrock Farm Training Center is a 155-acre facility just over 20 miles from Pimlico. Mitchell Farm Training Center is a 97-acre facility near the Aberdeen Proving Ground. The third-rated facility is the Bowie Race Track, a 131-acre training facility.

The legislation also allows the Maryland Stadium Authority–a state-founded entity to help fund and operate key building projects in Maryland–to issue $400 million in bonds to help bankroll the Pimlico Plus plan.

Ultimately, ownership of Laurel Park will be transferred fully to TSG for redevelopment at the beginning of 2028, “unless we have to extend the lease,” said Foreman.

According to Foreman, state taxpayers won't be on the hook should the non-profit formed to manage daily operations going forward run into operating deficits.

“If there's an operating loss when the non-for-profit takes over, the Thoroughbred purse dedication account has to backstop the losses. It will not come from taxpayer dollars,” said Foreman.

“I can't overstate the historical moment this is for Maryland racing. It's historical for the City of Baltimore. This is great for the City of Baltimore. It stops decades of worries about Pimlico and the future of the Preakness in Maryland and Baltimore. It's great for the Park Heights community. And I think it's great for the racing industry overall,” said Foreman.

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The Week in Review: In the Good News Department, 2024 is Off to a Good Start

The year 2023 was a pretty rough one for the sport of horse racing, and there was little to suggest that this year would be any different. The sport seems to be caught in a downward spiral as we move from one crisis to another and are left to wonder “what next?”

So far this year, the answer to that question is that maybe things will be better in 2024 than we might have thought. There have been several recent positive developments for the sport, many of them having to do with state governments investing in the game's future.

We learned last week that the New Jersey Senate joined the state's Assembly in passing a bill that would extended a $10-million annual purse subsidy through 2029. Governor Phil Murphy is expected to sign the bill. New Jersey is one of only a handful of states where the racing industry does not receive revenue from gaming. Without the $10 million, Monmouth's purses wouldn't be large enough to compete with tracks in neighboring states. According to the Daily Racing Form, Monmouth distributed $31 million in purses over 56 live racing days, for an average of $553,000 a day, the highest in its history, with one-third of that money coming from the subsidy.

It wasn't that long ago that Monmouth was operated by the state and then Governor Chris Christie threatened to shut the track down. In 2011, he said that Monmouth would “disappear” if private management wasn't put in place at the state-owned facility.

The news out of New Jersey was just the latest example of a state government showing that it believes in the future of the sport. In Maryland, Governor Wes Moore endorsed a plan authored by the Maryland Thoroughbred Operating Authority that will overhaul racing in Maryland. The proposal, which is dubbed “Pimlico Plus,” would mean a re-envisioned Pimlico site, with a new clubhouse, stables for 700 horses, a 1,000-seat event space, 2,000-car parking garage, veterinary facilities, a possible hotel and other new amenities. Laurel will close once the new Pimlico is ready to open for business and a new training facility will be built at a site that has yet to be determined.

Pimlico Plus has a hefty price tag. According to the Baltimore Banner, the new Pimlico will cost between $274 million and $284 million, while the new training facility would cost about $113 million. In 2020, the Maryland General Assembly approved the sale of $375 million in bonds for capital improvements for Pimlico and Laurel. The projects that were on the table at the time stalled, but the $375 million is still available and, with legislative approval, can be used to rebuild Pimlico.

The deal would require 1/ST Racing and Gaming, which owns Pimlico Race Course and Laurel Park, to transfer ownership of Pimlico to the state, and for 1/ST Racing to cede control of its day-to-day Thoroughbred operations to a non-profit entity as of Jan. 1, 2025. The non-profit entity would be structured so that it is similar to the New York Racing Association. 1/ST Racing will retain the rights to the GI Preakness S. and the GII Black-Eyed Susan S., which it would license to the non-profit operating authority.

The Maryland deal was announced about eight months after New York Governor Kathy Hochul's budget included a $455- million loan to NYRA that it will use to build a new Belmont Park, which is expected to open in 2026. Hochul did so despite fierce criticism from some advocacy groups, including PETA, that questioned the move. Victor Matheson, a Holy Cross College professor and expert on sports economics told the New York Post, “Basically it looks like with this project, you're kind of hitching your wagon to an industry that is in long-term decline.”

Belmont was last refurbished in the sixties and is a mammoth structure built during an era when 35,000 people might show up to the track on a Saturday afternoon. It is also not winterized, the primary reason why the Breeders' Cup has not been run at Belmont since 2005. New York racing needed a new Belmont and needed to consolidate so that there was just one downstate track. Thanks to Hochul, it's going to happen.

In October, Keeneland announced a major capital investment project highlighted by the construction of a permanent paddock building. Once again, a state government came forward to help with the costs. Keeneland is working with state and local government to secure incentive funds to support the project, which is expected to cost nearly $93 million. Already, upon the recommendation of the Tourism, Arts and Heritage Cabinet, Keeneland received preliminary approval from the Kentucky Tourism Development Finance Authority for incentives to support the project totaling up to $23.2 million.

“Keeneland is a historic destination for our local families and travelers, and this exciting investment will create more opportunities for everyone to enjoy, while boosting our signature horse racing industry and Kentucky's $12.9 billion tourism industry,” said Gov. Andy Beshear. “The horse racing industry is as indispensable to our economy as it is to our culture, and after a record-breaking year for tourism in 2022, leaders like Keeneland are going to help ensure Kentucky's success continues for years to come.”

Last week, we also learned that the purse for the Kentucky Derby has been raised to $5 million. It was $3 million. In addition, the 2024 spring meet at Churchill will offer purses totaling more than $25 million or a 25% increase over 2023.

This happened because Kentucky racing has never been healthier. Revenue from Historical Horse Racing Machines has created huge purses in the state. Maiden special weight races at Churchill Downs went for $120,000 and allowance races were worth $141,000 last fall.

“These record purse increases are a symbol of the health of horse racing in Kentucky,” Bill Carstanjen, CEO of Churchill Downs Incorporated said when announcing the Derby purse increase. “Churchill Downs Incorporated's over $1-billion investment into live and historical horse racing in Kentucky over the last five years has meaningfully strengthened the entire Kentucky Derby Week and year-round racing program. It's important to acknowledge the state legislature for its commitment to working closely with private enterprise in a truly collaborative partnership to support the continued growth of Kentucky's signature industry.”

None of this means that 2024 will be perfect or that we shouldn't brace ourselves for the next set of problems. But this sport is resilient, as the recent developments have shown. Let's hope for more of the same in 2024.

Triple Crown Purses

Churchill Downs was not the only track to raise the purse for its Triple Crown event. The purse for the GI Belmont S. has been increased to $2 million from $1.5 million. That's a step in the right direction, but it's not enough. Along with the Breeders' Cup, the Triple Crown races are supposed to be the sport's most important events. Their purses should reflect that. All three races should have purses of $5 million. As of now, there is a gap between the Derby and the $1.5-million Preakness and the Belmont, which isn't good for the Triple Crown. There should be enough money out there to have three $5-million races.

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Differences Over ‘Pimlico Plus’ Project, Proponents Say ‘We can’t let perfect get in the way of good’

Acknowledging that there are differences of opinion about specifics of the “Pimlico Plus” plan that envisions a publicly funded future of racing at a state-owned, modernized track in Baltimore, the construction of a new training facility elsewhere, and a non-profit operator taking over day-to-day racing, the leaders of the Maryland Thoroughbred Racetrack Operating Authority (MTROA) on Thursday asked stakeholders not to let quibbling over details derail the larger goal of getting the ambitious plan approved by the legislature so that horsemen can control their own destiny.

“There are a lot of skeptics,” said Alan Foreman, who is the general counsel for the Maryland Thoroughbred Horsemen's Association (MTHA) and is also that group's representative on the MTROA. “Some of the critics have already come out very quickly without letting us continue to do our work. My own personal perspective is the status quo in racing is simply not going to survive going forward. We have a once-in-lifetime opportunity here. This will not present itself again. And we can't let the perfect get in the way of the good.”

The MTROA's vision for the $400-million makeover, which was made public in a Jan. 5 report, has a number of key components coming into alignment right now, Foreman said.

There is support from the Maryland governor, the speaker of the House, and the president of the Senate, Foreman said.

In addition, The Stronach Group (AKA 1/ST Racing and Gaming), which owns Pimlico Race Course and Laurel Park, has agreed in principle to an exit strategy that would turn over ownership of Pimlico to the state and cede control of daily Thoroughbred racing operations to an entity that would function similarly to the New York Racing Association (NYRA).

In exchange, The Stronach Group would be allowed to eventually sell or redevelop Laurel while retaining rights for Maryland's two signature races, the Preakness S. and the Black-Eyed Susan S. Those rights would then be leased back to the new operating entity.

Despite the momentum the project seemingly has going for it, Gregory Cross, the MTROA's chair, warned that getting Pimlico Plus signed into law is far from a slam-dunk.

“It's an extremely, extremely difficult budget year,” Cross said. “We're lucky to be preserving what we have [and] fitting it [into] what has been allocated-very lucky.”

Foreman agreed: “We're really threading the needle here, folks.”

Added Cross, “While we have been given some support, it's far from an assurance of passage, so we've got a lot of work to do.”

That work, Foreman, said, includes not just the passage of legislation, but acquiring and beginning development on a training center, engaging a design consultant to flesh out the reimagined Pimlico beyond the broad concept that is currently on paper, signing off on negotiations with The Stronach Group, and putting together the non-profit operating team.

The MTROA would like all of that done by Jan. 1, 2025.

“There are only two states in the country where there is any forward-thinking development going on,” Foreman said. “NYRA, which is rebuilding Belmont, and now it's going to be Maryland racing. We have a very unique opportunity to position Maryland racing for the future. Through this project, I think we guarantee at least a portion of our funding base with the General Assembly. [But if] we didn't do this, we wouldn't be protected going forward.”

The MTROA envisions between 140 and 160 racing dates per year at Pimlico.

Foreman said the alternative, based on a presentation The Stronach Group made to the MTHA, would nearly slice that number in half.

“The Stronach Group's vision of the future is a maximum of 80 live racing dates in Maryland,” Foreman said. “Two 40-day boutique meets, with a shift of [gaming] revenue from the horsemen and breeders to them, to make them profitable. Under the current scenario, they do not see a way in which they would invest any money into the Maryland tracks. So we would be essentially at the status quo if we don't do any of this.”

Foreman continued: “Can you sustain live racing, and can you sustain a breeding industry, on 80 live racing days with vastly inflated purses, which is going to squeeze out the middle and the small horsemen, and bring probably large, out-of-state outfits into the state of Maryland? Where [else] do we think we can do something where we can control our own destiny and make this work?”

Foreman said he “firmly believes” Pimlico Plus is feasible. He further noted that the MTHA currently pays “$11-plus million” in subsidies to the Stronach Group just to conduct basic operations that keep the sport running at Laurel (which has been besieged by main-track safety issues for years) and Pimlico (which is outdated and hosts racing only for brief meets in the spring and September).

Still, the horsemen in attendance for the Jan. 11 videoconference had no shortage of concerns. Chief among them was housing for stable workers.

Last week's report stated there would be no housing actually on the backstretch at Pimlico. It would be nearby, in a neighborhood widely considered to be dangerous.

The report also identified three top candidates for training centers (Shamrock Farm in Woodbine, Mitchell Farm in Aberdeen, and the former Bowie Race Track in Bowie), but none of them would include dormitories for workers.

Trainer Ferris Allen put it this way: “I think the [MTROA] needs to understand that a lot of our employees are on foot or on bicycles. They don't drive. They work on H-2B visas and things like that. So on-site housing is a very essential part of running our business.”

As for Pimlico, Foreman said, “Working with the city, the plan is to incorporate backstretch housing into the community, contiguous to the racetrack. But that's all going to be part of a much more complete and dynamic redeveloped area, and not what you see in that area right now. It is a unique concept, one that we think will work, and one that will have to be fleshed out as we go forward.”

Regarding the training centers, Cross said, “At this time there's no money for that. It's a $25- to $30-miliion cost. And the zoning is very questionable as to whether it would be allowed.”

David Richardson, the executive director of the MTHA, who was moderating questions as they came in during the video conference, added that, “I will say I'm getting inundated with texts and comments about the need for backstretch housing at the training facility. If there's any feedback from horsemen, it's how crucial [the housing] component is.”

Foreman and Cross both indicated the MTROA would take into account the horsemen's concerns about housing going forward.

Other questions from horsemen included wanting to know specifics about the Preakness and Black-Eyed Susan S. licensing deals, but the MTROA didn't disclose many specifics.

“I don't want to get into too many details on that, but essentially we would be paying an annual fee [in exchange for] full control over the Black-Eyed Susan, the Preakness, and we would have full control over all revenue streams,” Cross said. “They're going to donate Pimlico to this new operating authority. We're going to license the Preakness. That's the essence of the deal.”

Asked if there was any consideration given to pushing back the proposed construction by a few months so Pimlico could capitalize off the 150th running of the Preakness at Pimlico in 2025, Cross said that idea would be too costly in terms of money and time.

“At the end of the day, we decided to model after Belmont, which is closing for two years and then coming back. And that is going to allow us to complete the construction on a timely basis,” Cross said.

But even though the plan calls for Pimlico to reopen in 2027, no deadlines are etched in stone at this early stage of the project.

Foreman said that even if Pimlico wasn't completely renovated in time for a grand reopening in May 2027, he expected it would be “at least in [a] phase [of partial usage] that we would still be able to accommodate the Preakness.”

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‘Pimlico Plus’ Concerns: Roving Preakness, Future Of Turf Racing, Synthetic Readiness

'The Week in Review', by T.D. Thornton

A few items that stand out after sifting through Friday's “Pimlico Plus” report issued by the Maryland Thoroughbred Racetrack Operating Authority (MTROA). The ambitious $400-million plan, which is subject to legislative approval, re-imagines the state's racing consolidated at one publicly funded track in Baltimore, the closure of Laurel Park, the construction of a new training facility in the state, and 1/ST Racing and Gaming ceding control of day-to-day Maryland racing to a non-profit entity.

Triple Crown traditionalists who are already in a tizzy about the GI Belmont S. needing to relocate to Saratoga Race Course and change its distance for 2024 because of the complete overhaul of Belmont Park had better brace for a radically nomadic renewal the sport's signature series in 2025.

If the proposed re-imagining of Pimlico Race Course gets green-lighted by the Maryland legislature as per the MTROA's desired timetable, and if the New York Racing Association (NYRA) confirms the expected Belmont-at-Saratoga festival again for next year, the 2025 series of spring Classics could feature the GI Kentucky Derby run per usual at Churchill Downs, followed by the GI Preakness S. at Laurel Park (the placeholder host during Pimlico's reconstruction), and the Belmont S. at Saratoga for the second season in a row (at the truncated distance of 10 furlongs because NYRA doesn't want to start what is traditionally a 12-furlong race on the Spa's far turn).

Even assuming that a modernized Belmont Park is ready to take back its namesake stakes in 2026, the Maryland time frame still has Pimlico's construction ongoing through at least that year, meaning the earliest return to Triple Crown normalcy, in terms of host tracks and race distances, could be 2027.

In addition, the 150th running of the Preakness will occur in 2025, but the festivities will likely be muted because of the temporary move. The anniversary will certainly be recognized, but don't expect a Preakness-at-Laurel celebration to have the same cachet Churchill will enjoy this year when it unveils long-planned facility upgrades and partners with the city of Louisville for an extended Derby 150 bash. It will be tough for whoever controls the rights to the Preakness to take advantage of the historical hoopla associated with its big anniversary if the race gets moved to temporary digs 28 miles south of Baltimore.

The Preakness is only one day, but the turf racing season in Maryland usually lasts for more than six months. Consolidating racing at Pimlico will mean limiting grass racing to one smaller course that won't get much of a break during the sweltering summer months.

When Laurel's expanded turf course opened in 2005, it was billed as a game-changer for Maryland racing, and it has proven to be an investment that paid off handsomely in terms of delivering more grass opportunities, boosting field sizes and generating handle.

While Pimlico's existing (and proposed new) turf course is seven furlongs in circumference, roughly the same as Laurel's (seven furlongs and 254 feet), the key difference is width–Pimlico's existing/proposed width will remain at 70 feet according to the MTROA report, while Laurel's is a generous 142 feet wide, allowing for the ability to move portable rails out 17, 35, 53, 70 and 87 feet to provide six different running lanes.

Just last month, the Maryland Thoroughbred Horsemen's Association (MTHA) issued a press release that underscored how the “Laurel turf is integral not only to the Maryland racing product but the overall mid-Atlantic racing product.”

According to the MTHA's count, in 2023 Laurel ran 273 turf races, the most since 2019 and the highest number among all racetracks in the mid-Atlantic region. Average field size for the course was 9.2 horses per race over six-plus months of usage, while the average field size for dirt races at Laurel between Jan. 1 and Nov. 30 was only 6.8.

Pimlico, which conducted short meets in May/June and September 2023, ran 72 grass races, giving Maryland access to 345 in-state turf events. But the actual number of turf races at Pimlico isn't as important as the break its meets afford Laurel's course, which had shown signs of strain in previous years when Pimlico didn't run during the summer.

Pimlico's ability to carry on Maryland's reputation as a strong grass-racing state is dubious given the course's size and a calendar that will give it a summer break only when the Timonium fair is in session at the end of August and early September.

The turf course at Colonial Downs is 180 feet wide and 180 miles south of Pimlico. Over the course of a 27-date 2023 summer meet, the Virginia track ran 213 turf races, the second-highest in the region, according to the MTHA's numbers.

To Maryland, Colonial looms as a horse-siphoning threat in both the short term (for the several years Laurel will race almost non-stop while Pimlico gets rebuilt) and over the long term, when Pimlico takes over with a turf course that isn't as expansive or versatile as the one it's replacing.

Whether Pimlico's main track and turf course remain in their existing locations or get rotated to better fit within the redesigned property's footprint (both options are outlined by the MTROA), one of the report's “Guiding Principles” states that “The dirt track shall be engineered to be 'synthetic-ready' allowing the quick and economical transition from dirt cushion to a synthetic cushion.” The proposed new training facility is also supposed to have this “synthetic ready” infrastructure in place.

Wanting both Pimlico and Maryland's new training center to have the option of switching over from dirt to a synthetic surface in the future seems to be a good idea from a planning perspective, because it's unknown at this point if a federal mandate requiring synthetics might be in the pipeline from the Horseracing Integrity and Safety Act Authority. But claiming that having such infrastructure is going to position Maryland to be able to “quickly and economically” pivot from one surface to the other understates the difficulty of taking on this sort of after-the-fact conversion.

More than two decades of synthetic-surface history in North America has shown that making a switch is, by its very nature, neither fast nor cheap.

When Woodbine Racetrack changed from Polytrack to Tapeta during the winter of 2015-16, the work took three months, was purposely scheduled for the offseason, and had to include a settling-in period before horses were allowed on it. Turfway Park made the same surface switch in 2020, but had the luxury of an April-to-November time window between race meets to get the project done properly. To a certain degree, both those tracks were “synthetic ready” because they were switching from Polytrack to Tapeta. The cost for each project was measured in seven digits.

Can you imagine if “Pimlico Plus” reopened in 2027 with a dirt surface, and at some point soon after that the entity running the operation decided Maryland's only racing venue needed to cease racing for a while in order to switch over to synthetic?

By all means, build the base and its infrastructure to the best possible standards with a focus on safety. But if a synthetic surface is in Pimlico's future, decide on that right from the outset without making it seem like a subsequent change from dirt could realistically be “quickly and economically” accomplished.

When Laurel closed for five months in 2021 to replace its main dirt track with an entirely new dirt surface, Maryland racing had Pimlico to fall back on so racing on the circuit wouldn't go dark. If Pimlico becomes the state's sole Thoroughbred track, there will be no Plan B for Maryland racing if it needs to repair or switch surfaces.

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