Maryland horse racing officials on Wednesday said the state’s racetracks needed a three-year government subsidy to give them more time for developing a long-term plan, which likely will include consolidating into one corporate owner. Penn National Gaming is considering selling back its 49 percent stake in Laurel Park and Pimlico Race Course, officials said. In turn, co-owner MI Developments would transfer total ownership of the two thoroughbred tracks to Frank Stronach, the founder of Ontario-based MID. Stronach was also chairman of Magna Entertainment Corp., the bankrupt former owner of Maryland’s tracks.
“From a corporate or business perspective it is much more beneficial to have one single ownership, one single voice … that makes it much easier to market,” said Tom Chuckas, president of the Maryland Jockey Club, which operates the tracks.
Chuckas testified before the Maryland Senate Budget and Taxation Committee on a bill that proposes temporarily reallocating slots revenue for racetrack operations. The measure, proposed by the administration of Maryland Gov. Martin O’Malley, would divert the slots revenue designated for a racetrack renovation fund to track owners to ease any operational deficit through 2014.
Thoroughbred tracks would receive up to 80 percent of the fund for operations and the state’s two harness racing tracks would receive up to 20 percent, or $1.2 million. The fund is projected to total $10 million in 2012, according to Joseph Bryce, Gov. Martin O’Malley’s chief legislative officer.
The thoroughbred tracks combined for a $26 million loss in 2008 and 2009, according to their financial statements.
Maryland’s thoroughbred tracks have been under corporate ownership since 2002, when the DeFrancis family sold their majority stake to Magna, which once was the largest racetrack owner in North America.
A spokesman for Penn National said the sale of its stake to MID is not final and that the company is still weighing its options. A spokeswoman for Stronach did not respond to a request for comment.
