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Ten-year agreement creates smoother path, more stable environment for Maryland Racing

Editor Joe Clancy talks to the main players and explains what it all means to owners, breeders and trainers in our May feature.

Tom Chuckas and Bruce Quade work in Maryland racing. Hold down important positions. Plan for the future. Sweat the details. Maintain wildly busy schedules. The first oversees the state’s two major racetracks. The second heads the state regulatory body.
In late March, separately, they said the same thing–in different words–about the future of the industry.
“With the positive relationships that are going on, the ball is truly in (racing’s) court,” said Chuckas, president and chief operating officer of the Maryland Jockey Club which owns Laurel Park and Pimlico Race Course. “There’s a plan in place that will allow all of us to prosper, as long as we collectively do the right thing. It’s pretty simple; I don’t want to say it’s easy. What we do might be difficult, but it can be done.”
Chairman of the Maryland Racing Commission, Quade put it just as succinctly: “I really do think the whole industry is headed in the right direction. The governor and General Assembly gave us the tools to make this work. They’ve given us the means; the resources are there to make this work and you can tell people really want to make it work.”
And with those two comments, they spoke for an industry that, after a frequently contentious and frustrating decline that’s lasted the better part of two decades, is on the leading edge of a major rebound. For a change, there is good news in Maryland and an ability to look ahead–to better racing opportunities, richer incentives for owners and breeders, consolidated year-round training facilities and–yes–even new construction at the racetracks.
It’s difficult to believe, given the rocky path traveled by the state’s breeders, owners, trainers and track operators. The industry fought hard for assistance from state government, and watched as various gaming bills faltered in Annapolis. In the meantime, neighboring states West Virginia and Pennsylvania joined Delaware (the first in the region) by adding casino facilities at racetracks and targeting a portion of the revenue for purses and breeding incentives.
From 1991 to 2011, mares bred in Maryland dropped from 2,782 to 541, a decrease of 80.6 percent. The Maryland foal crop slid correspondingly, from 1,709 in 1991 to 390 in 2011. Most importantly, Maryland’s contribution to the total North American foal crop dropped from 4.2 percent in 1991 to 1.5 percent in 2011. During the same time period, the stallion roster dropped from 198 to 31, a decrease of 84.3 percent.
Some of that was coming, as Thoroughbred racing contracted nationally, but much of it can be credited to competition as nearby states ratcheted up their Thoroughbred momentum with slots money.
Maryland, the state in the region with the deepest racing past, was no longer a leader. Purses and handle figures declined, racetracks took on partners and teetered on bankruptcy, breeders felt the pinch, horsemen hunkered down to preserve live racing. And everyone suffered in an atmosphere of uncertainty, which seemed to peak every December when the MJC and the Maryland Thoroughbred Horsemen’s Association negotiated the coming year’s racing contract at the deadline.
That’s all changing as the industry continues to get off the canvas and punch its way back into the game regionally, maybe even nationally.
First came racing-friendly gaming legislation. Slot machines started contributing to the purse account in 2010, and average daily purses now reach $250,000 (up from $160,000 in two years). Higher purses have meant a more attractive product and greater pari-mutuel handle, in addition to bigger paydays for owners, breeders and trainers. Like turning around a ship, it didn’t happen quickly and caused plenty of waves, but the improved business at least meant a new compass heading.
In the face of progress, the missing ingredient was long-term peace and planning for the racetrack product. If every December brought a new round of negotiations between horsemen and track ownership, how could any player in the game confidently proceed? To breeders, the uncertainty was especially burdensome, given the three years (at best) it takes for a Thoroughbred to get from conception to the racetrack. If you don’t know what kind of opportunity you will have from one year to the next, why would you create a Maryland-bred? Further down the line, why would you buy one? Or race one? Owners, trainers and the tracks faced similar “What ifs?” every time the issue was raised.
In December, the question turned to “Why not?” as a historic 10-year agreement on racing dates and capital improvements was signed late in 2012 between the MJC, MTHA and Maryland Horse Breeders Association. Brokered by the racing commission, the agreement provides the bedrock on which something can be built.
“The commission had a whole list of things that needed to be addressed as far as racing goes?–?medication, breeding, a shortage of horses, bringing people to the track, all the old clichés,” said Quade. “It sounds like apple pie and motherhood, but before any of those could be addressed with any sort of believability, you needed the 10-year deal. It’s the basis, the foundation, the linchpin to make it all happen.”
Northview Stallion Station, the state’s leading stud farm, opened a Pennsylvania division during Maryland’s downturn but recently added Redeemed to the Maryland roster. The multiple graded stakes winner may have joined the farm anyway, but the 10-year deal surely makes his future rosier.
“There is no question that this 10-year agreement gives all breeders a brighter outlook,” said Northview president Richard Golden. “Without this agreement, any breeder planning to breed a mare in 2013 and hoping for a foal that would not race until at least 2016 had to be a clairvoyant to know what they were facing in the future.”
Ten Years and a Cloud of Dust
The nuts and bolts of the agreement are many, but include:
• 100 days of live racing at Laurel and Pimlico each year, run by the MJC, starting in 2014 (this year it’s 146, as it’s been for several years);
• Additional days (40 is the working number) purchased by the MTHA via the purse account;
• 1,900 stalls at Laurel Park and Pimlico Race Course, at no cost to horsemen, for year-round training; at Laurel, 300 new stalls will be built; at Pimlico, 300 existing stalls will be replaced with 300 new stalls;
• The closing of Bowie Training Center;
• Revenue-sharing from the purse account between horsemen and the tracks to help offset operational expenses.
There’s plenty more to it, and the agreement will be severely tested by any delays along the way, but there’s real movement in a variety of areas.
MJC can invest and run its business with confidence, saving money with the closure and sale of Bowie. As Chuckas put it, there’s a reasonable chance to make a profit now. Funded by gaming revenue, the Racetrack Facility Renewal Account provides matching funds for capital improvements such as the stalls and other far-reaching projects. There are grand plans for Laurel and discussions for upgrading Pimlico without losing its history.
Chuckas, part of those 11th-hour negotiations with horsemen on a racing contract, likes the freedom he now has to plan and to work toward growing MJC’s business. Along with people directly involved with horses, his staff has weathered storms.
“To say it’s been tumultuous is probably an understatement,” he said of life before the agreement. “We lived through a lot and there was a tremendous amount of uncertainty for our organization and also for the people employed here. The agreement gives them a future, allows them to refocus on what we can do over the next 10 years.”
Likewise, horsemen can do their jobs. They know the purse commitments. They have the ability to truly control some racing dates, and are considering options. They give up Bowie, which will force some to relocate, but they gain space and stability at Laurel and Pimlico. The latter hasn’t been open for year-round training since 2001.
“Our guys know they’ll be racing next year, outfits can plan to come here in the winter, we can plan for the future, there is some stability,” said David Richardson, executive secretary of the MTHA. “The biggest thing is holding the deal together. Hopefully our business increases or at least holds its own and these barns get built. That was the biggest component for our guys. The barns need to be built at Laurel.”
Richardson sees 2014 as a key for the horsemen and the agreement. The MTHA will be funding the administration of racing days and will share in the costs of barn construction?–?via the purse account in both cases.
“Next year is going to be tough for us, because we are going to be incurring a lot of these expenses for running these days. Hopefully our business holds together and we have the money to keep the purses high,” Richardson said. “So far, so good. Things are positive. We need to work out a couple of little issues, we need the barns to be built so everybody has a home. We need to get the Bowie people to Laurel and the Pimlico people back to Pimlico. As of right now, nothing has been done but Tom has assured us they are getting all their permits and doing all their work.”
Chuckas expects the Laurel work to happen over this year and next. The agreement mandates that 150 stalls be built by the end of 2013 and permits be in place for other work. In addition, Bowie requires legislative approval to close. When the former racetrack (14 miles from Laurel) does close, the MJC expects to sell the property and invest the money in improvements at Laurel and Pimlico.
As the arbiter of the pact, the commission plans to stay involved. Quade called keeping the agreement in place Job One for all parts of the industry. Chiefly, he sees it as a key because in lobbying the state legislature to be included in the gaming equation, the racing industry drove home its history and its impact (on land use, the economy, jobs and more). To Quade, who joined the commission in 2011, failing to collectively solidify the future would be a mistake.
The commission doesn’t have a horse in the race, but will work to ensure the starting gate stays in place, he said. Since the agreement was signed, he and other commissioners have created a task force to address the breeding industry, met with executives of the Stronach Group (MJC’s parent company), agreed to uniform medication rules, signed off on altered claiming rules and generally been active facilitators of progress. Quade sees those goals as important tasks for the commission, but sees them as near-impossibilities if the agreement fades.
“There seems to be real commitment to keeping it on track,” Quade said. “I think the commission needs to play a very proactive role in a lot of things. We’re very aware that it’s a deal between the parties; it’s not a commission deal. The commission just mediated it, but we believe it’s in everybody’s best interests that we stay involved and all parties have indicated that they think it’s a good idea.”
What’s It All Going to Look Like?
Someday, everything will be different. Laurel Park’s grandstand will be new and modern and relocated. Good old Pimlico will be upgraded to a facility fitting of the Triple Crown without losing the historic touches. Horses and backstretch employees will live and work and train in comfort at both tracks. Bowie will be a faded memory.
But when? Safely, conservatively, it’s going to be awhile, though the gears are turning.
First, stalls must be built at Laurel. The area across Brock Bridge Road from the current stable area is targeted for additional barns, with a tunnel for access to the track–which is part of bigger, grand plan for Laurel. Next, will come new barns at Pimlico. All being well, the closing of Bowie follows.
Major renovations to both tracks will wait. Pimlico, because of its age and history, will require significant study before construction can begin. Plans for Laurel have been on the table for years, and Chuckas has a directive from Stronach to proceed. Seeming both radical and practical, the plans call for building a new grandstand on the opposite side of the track, meaning the backstretch will become the homestretch, and adding shops, restaurants and other amenities along the lines of Gulfstream Park in Florida. The new Laurel location will have better public access and visibility from Md. Route 198 and more options for creating a destination. But, it’s a massive undertaking and can’t happen without the stable-area improvements and continued economic progress.
“In a realistic fashion, many of these things will take five years,” said Chuckas. “This is a process. Anybody that thinks the grandstand will be flipped in six months is unrealistic. In both locales, there are processes to go through in zoning and permitting and most importantly working with our neighbors.”
When he talks about the grand visions, Chuckas usually gets a question: “Are you really going to do it?” He’s got an answer.
“My marching orders are to move ahead with these projects and we want to do it right,” he said. “It’s important that we do it right. I’m very careful of what I say because I don’t want to over-promise and not deliver. The truth of the matter is it’s going to take some time.”
Stronach sees a bright business future for the Maryland tracks, and the industry as a whole. Otherwise, the big plans wouldn’t be considered. Higher purses have boosted handle and interest. Though they don’t benefit the racing industry directly, table games are being added to the state’s existing casinos, a Baltimore City casino is scheduled to open next summer, a Prince George’s County casino could be running by 2016. Theoretically, all point to the potential for more revenue from slot machines, and a bigger source of funds for the racing industry.
The nation’s Thoroughbred horsemen are noticing as Maryland entries include new names and bigger fields. Chuckas pointed to a higher in-state handle and a healthy gain out-of-state during 2012. The trend continued during the first part of 2013 and, as usual, the MJC anticipates a big Preakness meet at Pimlico.
“That tells me the state’s assistance in allocating slot money into the purse account has some benefit,” Chuckas said of the increasing revenue. “There’s still a lot to do, but the industry has a lot of potential.”
Chuckas said a 2014 schedule would likely consist of a roughly 40-day spring meet at Pimlico and a roughly 60-day fall meet at Laurel. The horsemen’s dates could come in summer and winter, perhaps a combination of the two.
“We are looking forward to buying the days next year,” said MTHA board member and trainer Linda Gaudet. “We would like to have more of a year-long circuit, use the days when we have a beautiful turf course at Laurel. It’s absurd that we don’t get on the turf course until September 19; it just sits there all year long. That’s our goal, to use the dates better, I don’t think anybody has the perfect solution to it yet, but we certainly need to use the turf dates at Laurel. That’s what we are working on, hopefully everybody will go along with that, if we are buying the dates next year, then we should be able to run when we feel like we should run.”
Ideas include running Fridays, Saturdays and Sundays at Laurel during late spring and summer to take advantage of the turf course and offering longer breaks between meets to revive horsemen, horses and fans. Call it year-round racing light.
“What kills us is the momentum starts up at Pimlico and then boom, we’re gone for three and a half months,” Gaudet said. “I know people say you can’t sustain year-round racing, but I think you can if you do it in a certain way, three days a week, break up your meets, utilize the turf. It’s not a hard thing to figure out, we’ve been saying it for years, but either the horsemen don’t want to give up days or the racetrack doesn’t want to give up days. I’m not saying it’s a simple solution, but it’s a solution that needs to be tried.”
Increased purses have already attracted new horsemen and horses to Maryland and a solidified schedule will only help. Ben Perkins, traditionally a powerhouse in New Jersey, shipped 24 horses to Bowie in October. In the past, he moved to New York or Florida or simply rested his horses once Monmouth Park closed. Maryland offered a better choice.
“When you’re racing in Jersey, the season gets shorter and shorter every season. We ran into a situation where you’re basically dead in November and December, then I usually had to go to Florida with some and New York with some, and it got a little tougher to compete up there,” Perkins said. “When the purses improved in Maryland, we had more horses that would fit there, we decided to give it a try. I always enjoyed it there, it’s a nice place to spend time.”
With a deep inventory of New Jersey-breds and a home close to Monmouth, Perkins will go back to the Jersey Shore in the summer. He planned to be active at Pimlico and return to Maryland after Monmouth closed in the fall. Perkins likes the new approach.
“Since Maryland has gotten some extra money, I think they’re using it wisely, creating a system where people can plan more for the future. It has the infrastructure to have good owners and good breeders, people can now look forward and see that it’s going to be stable, I think the breeding industry will turn around and pick up,” Perkins said. “I’m not knocking Pennsyl-vania, but they had a real influx and then it leveled off and it has gone downhill a little bit as far as their breeding program and I don’t think they put as much emphasis on the program as they hopefully will in Maryland.”
New Climate for Progress
Just as important as an improved economic outlook, upgraded facilities and big plans for the future is the intangible climate of Maryland racing. Gone are the final-minute negotiations on racing, the threat, real or otherwise, that the Preakness could be in jeopardy, the gripes from politicians and citizens about bailing out an industry that can’t help itself.
“For the first time in a long time the feeling or the vibe is positive,” Chuckas said. “The relationship between the track, the horsemen and the commission has improved. We just have a much better relationship between all those parties. You have a 10-year agreement that provides some certainty for the future. With some of the uncertainty taken away people can really focus on the issues and do what’s best for the long term.”
Chuckas stresses balance–between over--night purses, stakes purses, horsemen, fans, track ownership. He likes to see horses trained by Kiaran McLaughlin, Bob Baffert, Rudy Rodriguez and others shipping in to race; enjoys the hometown success of Maryland-breds; smiles as his staff throws a public birthday party for legendary trainer King Leatherbury; loves watching the handle numbers rise. Chuckas also knows that success can’t come with a divided industry.
“Each of the participants plays a key role,” he said. “If you take one out, it’s not as strong. It doesn’t work. If the track, the horsemen and the breeders do what they’re supposed to do, it trickles down to, most importantly, our guests. We need them. We need our guests to come to the races, bet on our races, be part of it.”
Quade and the commission recognize that, too. There’s no point in assuring the sport for breeders, owners, trainers, tracks, if nobody comes to the races. Quade, a retired federal employee in the intelligence and energy areas, doesn’t own, train or breed horses, but he does go to the track. Under his watch, the commission has addressed issues with a task-force model. Small groups, led by a commissioner and including stakeholders from outside the regulatory body, tackle topics of importance and return with recommendations. Quade plans to muster more forces to address other segments of the industry.
The goal of all of this is to assist Mary-land racing. For years, the Thoroughbred industry went to politicians for help. It finally came with the passage of a statewide gaming referendum in 2008. There are no casinos at Thoroughbred racetracks in Maryland and there may never be, but the success of the racing industry now depends on money from video lottery terminals. In less than three years of activity, gaming has directed some $50 million toward purses and more than $15 million to the Racetrack Facility Renewal Account (which supports capital improvements via a matching-funds agreement with the MJC).
Quade wants to justify that support with a healthy industry?–?on the tracks, at the farms, in the boardrooms. In a year, he’ll be in Annapolis giving a report on the health of the industry and expects to paint the full economic picture for farmers, owners, trainers, breeders, racetracks, bettors.
“We need to make sure the revenue supports Maryland industry, Maryland farms, Maryland jobs,” he said. “It’s a challenge to us to hit those parts of it. Just raising purses is a great start, but it’s not the be-all, end-all. We need to consider how all the aspects of racing dovetail together.”
Maryland Racing vs. Racing in Maryland
Back in December, Quade used that comparison to make his point for launching a breeding-industry task force. He wasn’t creating competition, just making a point that improving the racetrack product is only part of the equation.
And Maryland breeders have taken a beating, due to a general downsizing of the industry and competition from surrounding states. People culled mares, sold stallions, raised fewer horses, sold farms, sent mares to foal in other states. Those who stayed remained ever hopeful of the next breakthrough around the corner and it has finally arrived.
“People have a renewed sense of optimism here,” said Dr. Tom Bowman, president of the Maryland Horse Breeders Association and with his wife Chris the state’s 2012 Breeder of the Year. “I don’t have any concrete evidence, but talking to people it’s easy to recognize why they’re more optimistic. I’m told that various stallions are seeing an increase in their books and that more mares are coming to foal.”
A practicing veterinarian, Bowman envisions (once all the numbers are in) a slightly larger foal crop for 2013. The boost came mainly because of slots-enhanced purses, but the 10-year agreement and other developments should create even more impact with the foal crops of 2014 and beyond.
Bowman said key reasons for optimism among breeders come from the early efforts of the breeding task force. Led by Bowman, David Hayden and Charles Tildon III as co-chairmen, the group made recommendations to the commission and to the MTHA.
“It’s difficult to reduce what it’s been like the last few years to just a few sentences,” said Josh Pons of Country Life Farm. “Basically it was a parade of horribles, from the track operator not putting the ante in to get the slots at the racetrack, to the speaker of the house who blocked slots legislation for the entire [Robert] Ehrlich administration, then to have it pass as soon as [Martin] O’Malley was elected. There’s been an indifference to the industry in Maryland and that’s unfortunate.”
Pons and his family reinvented storied Country Life in Bel Air, moving much of the operation to nearby Merryland Farm and adding racing partnerships to a business that once focused primarily on standing top stallions. Buoyed by progress in the state, Merryland introduced a new stallion to the state in 2012 and 2013.
“Maybe it’s similar to what it’s like in Kentucky. How can you have an industry in any state, one that has the economic impact that it does yet the legislature doesn’t see it?” Pons said. “Every farm, every activity, they are tax producers, there are jobs, revenues. I guess we’ve kind of dug in like World War I soldiers in the trenches for the last few years. We’re fighting this war pretty much on sentiment alone. But now we can kind of stick our heads out of the trench a little bit, maybe plan a little bit. The 10-year plan gives stability to the guy who wants to play the game in his home state.”
Pons is a member of the breeding task force, which rolled out an agenda prioritizing financial incentives to owners, breeders and stallion owners. The task force is also hoping to pay breeder bonuses through third place, start a restricted racing program for Maryland-breds, and afford purse enhancements to state-breds who win open-company races.
“We could be looking at as much as a 30-percent bonus on the breeder side, for first, second and third,” said racing commissioner Hayden, who owns Dark Hollow Farm with his wife JoAnn. “Right now the only way to get an owner/breeder bonus is you have to win it. To be paid across the board, that’s a huge incentive and huge relief.”
Hayden hopes to have an answer from the MTHA this spring and perhaps a program in place by Laurel’s fall meet.
Jim Steele, who runs Shamrock Farm in Woodbine, said the 10-year agreement is a positive for the breeding industry and also is hopeful the horsemen get on board with plans to expand and improve the bonus scheme.
“A lot of people were thinking they were going to pack their bags and leave,” Steele said of the feeling before the agreement was reached. “This might stop that. Maybe it gives people a little more time because there is some hope. Some people thought it would be a whole lot of turnaround. That hasn’t happened yet, but the agreement shows they’re trying to improve things for breeders and promote Maryland-breds. Now if the MTHA goes along it will be another shot in the arm. Hopefully we will be coming back to where we used to be.”
Kevin Plank’s Sagamore Farm was the leading breeder based on bonuses paid by the existing Maryland Fund, which awards owners and breeders in a variety of ways including Maryland-bred stakes purses and supplemental payments based on racetrack performance.
Tom Mullikin, general manager of Saga-more and an MHBA board member, said he was guardedly optimistic. He hopes the agreement sends a message to horsemen that revenues from gaming should not be used as a “Band-Aid . . . to solve all your problems.”
“It may not be a popular position, but folks need to wake up,” Mullikin said. “It’s not 1950. We have all this competition for the consumer’s dollar. We need to make it enjoyable, from accommodations to food to putting a good product out there. Starter handicaps, starter allowances and claimers, that’s not how you get people excited.”
Bowman said one way to get people excited again, particularly legislators keeping close tabs on the state’s Thoroughbred industry, is to borrow a popular mantra of small business owners across the country.
The idea of a “Buy Local” program is catching on as small-scale and locally based companies compete for consumer dollars against the big-box retailers. Bowman said the concept of buying local, staying local, and supporting local could be huge for Maryland’s breeding program, which already boasts a long resume of success and a storied history.
“To me one of the biggest pitfalls is that nationally we have a greatly declining population of potential racehorses in the future,” Bowman said. “Because of that we’ve got to come up with programs that encourage people to race in our state as opposed to other states. Purses aren’t the whole answer. If they are, we’re done. We can never compete with New York. Pennsylvania is questionable.
“So what’s the secret? We need to convince people, through whatever program, task force, or the MTHA, that it’s to their advantage to buy Maryland-breds and race them in the state,” he continued. “We need enhancements for Maryland-breds, like the effort to get people to buy locally. They say, ‘Go to the farmer’s market, avoid big chains, support local businesses.’ If we can get it where people want to buy local horses, grown local, raised local, then we’re well on our way. And it’s not like it’s an inferior product. Locally grown vegetables are just as good if not better than what you get in the supermarket. The same thing can be said of the horse. Why not go ahead and buy them here?” 

Additional writing and reporting by Sean Clancy and Tom Law.


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