Profit continued to be an elusive goal for Maryland’s racetracks in 2011, according to an article in the Baltimore Sun (here). But subsidies from the state’s slot machine revenue and from the state’s horsemen allowed track owner Maryland Jockey Club to close the gap between revenue and expenses.
According to MJC figures, Laurel Park and Pimlico lost about $5.3 million on operating revenue of $67.9 million. That loss is down from a self-reported $20 million loss in 2010.
The improved financial picture stems from three factors: more than $5 million in subsidies from the state and from the horsemen; reduced expenses; and improved revenue, which increased by $1 million on a year-over-year basis. The slots moneys the tracks are receiving, in a deal brokered by Governor Martin O’Malley’s office, originally were to be matching funds for capital improvements; instead, the tracks have been permitted, temporarily, to use them for operating expenses.
The tracks are expected to receive an estimated $10 million in subsides, including $4 million from the horsemen, in 2012. In return, the tracks will run a combined 146 days — same as in 2011 — and expect to reach break-even.
Still, the question of sustainability remains. “What is the answer for a model that is self-sufficient and reliable?” wondered MJC president Tom Chuckas. “That is the million-dollar question.”
The tracks and the horsemen’s representatives from the Maryland Thoroughbred Horsemen’s Association (MTHA) are meeting every other week with representatives from the Maryland Racing Commission to craft a plan for the future.
Meanwhile, the restive state legislative delegation from Montgomery County, in the DC suburbs, eyes the slots revenue covetously. Delegate Luiz R. S. Simmons has proposed, for the second straight year, to divert slots revenues originally targeted for racing to school construction, a proposal that would devastate the state’s racing industry while barely impacting the state education budget at all. While that bill seems unlikely to fly this year, the future is less clear.
All of this points to two key questions for Maryland’s horsemen as they approach the apparently still unscheduled special meeting to consider changes to the MTHA’s bylaws and, presumably, leadership:
- Will a change in leadership help or hinder Maryland’s horsemen in achieving, with other stakeholders, a vision for a sustainable racing future in Maryland?
- What will best equip the organization, in the short and long terms, to meet the challenges to its share of funds in the state legislature?
How the horsemen answer these questions will go a long way towards determining how they vote, whenever that occurs.