If the slot referendum passes and the machines come to Laurel Park, some believe that track will underwrite operations at Pimlico.
But in the last two years, it?s Pimlico that?s transferred cash to Laurel to help the Anne Arundel facility meet payments on new construction, according to an audit of both tracks, which are owned by Ottawa-based Magna Entertainment Corp. And Pimlico?s profits are driven by Maryland racing?s marquee event, the Preakness.
“Bottom line, it?s Preakness that underwrites it all,” said Tim Capps, former vice president of the Maryland Jockey Club, which operates racing at the tracks, and executive-in-residence at the University of Louisville?s Equine Industry Program. “The stronger the Preakness is, the better off everyone is.”
Last year was a strong one for the second jewel in thoroughbred racing?s Triple Crown. A record 121,263 packed the track, according to the Jockey Club, and wagering for the day finished at more than $87.2 million, the fourth-largest amount in the race?s 132-year history.
That lone day in May drove Pimlico?s 2007 net income to $1.83 million, up from $1.35 million the year before, according to an audit of the track filed March 31 with the Maryland Racing Commission. A similar audit conducted on Laurel Park found the track?s losses deepened last year to $4.3 million, ahead of $3.6 million lost in 2006. Magna as a whole reported a net loss of $113 million last year.
Pimlico also bailed out Laurel, according to the audits, by transferring cash to help the track meet some of its working capital requirements. Pimlico and Magna have “committed to provide working capital support and any additional cash infusions” needed this year, according to the audit.
The Maryland Jockey Club, declined to comment on the audit reports. But a report by the state Department of Labor, Licensing and Regulation last August also highlighted the importance of the Preakness.
“What sustains the Maryland [horse racing] industry at the moment is the Preakness,” the report said. “The Preakness generates enough revenue to subsidize the losses incurred for the remainder of the year.”
Rumors circulated last year that the Preakness might be moved from Pimlico, but Capps said he doubted that anything but Magna selling both tracks could cause that.
He attributed Laurel?s sinking profits to the greater number of racing days it holds compared with Pimlico and its lack of a tent post event like the Preakness. But its viability as a slot machine destination is beyond question and will boost its bottom line, he said.
“Laurel will be significantly stronger as a slot location than anywhere else because of its location,” Capps said. “You could put slot machines on the middle of the median strip on I-95 down there and it would do well. Baltimore City will be very good. But Laurel will be better, because it has a market to itself ? people are not going to drive past it to Baltimore.”
