South county horse industry reeling after slots setback
Some say declining industry might not survive Magna bankruptcy
Marilyn Ketts, an Aquasco horse breeder, ticked off the problems her business is facing – soaring prices for horse feed and other supplies, difficulty finding equipment and a crumbling economy that's making it harder for buyers to afford her thoroughbreds – but she didn't hesitate when asked what her biggest concern is.
"Did you hear about the big challenge?" she said. "Did you hear about Magna?"
Ketts, like other members of the dwindling horse industry in southern Prince George's County, used to think Magna Entertainment Corp. would save local breeders by installing thousands of slot machines at Laurel Racetrack. A state commission rejected Magna's application after it failed to pay more than $28 million in licensing fees, and on March 5 the Canadian company declared bankruptcy.
Magna's subsidiary, the Laurel Racing Association, says it did not make the payment because the commission does not have the legal authority to give refunds to unsuccessful bidders. An Anne Arundel County Circuit Court judge is expected to rule on the case today.
"With so many of the horse [breeders] leaving town, you've got the stalls empty on your farm," said Ketts, who raises about 50 horses with her husband and daughter. "We usually sell about 20 mares a year, but I think we'll be lucky if we have 10."
Ketts and other breeders sell many of their horses in Kentucky, Pennsylvania, Delaware and other states with strong horse racing industries. But those states protect in-state domestic breeders by adding incentives to the prizes won by domestic horses at races, bonuses that can go as high as 15 percent.
As a result, out-of-state buyers are often unwilling to buy horses bred in Maryland, said Cricket Goodall, executive director of the Maryland Horse Breeders Association. Goodall said the slot machines were expected to save the state's breeders by making the local racing industry viable.
"We were very optimistic until the news [of the bankruptcy]," she said. "Now it's all in turmoil because of Magna."
But local breeders have been struggling for years. The total revenue for horses bred in southern Prince George's dropped by nearly a third between 2002 and 2007, and the price of the average horse was cut nearly in half over the same period, according to the U.S. Department of Agriculture.
Total sales at a big horse auction held in Timonium in October fell more than 38 percent from the year before, with the average price for each horse dropping by more than 38 percent, to just over $17,000. Only 483 horses were sold at the auction, which was organized by Kentucky-based auction company Fasig-Tipton Co., compared with 574 in October 2007.
"It's gotten so bad for Maryland breeds I didn't breed at all last year," said Hal Clagett III, a second-generation horse breeder in Upper Marlboro. "The market just fell out in Maryland."
Dorothy Troutman, an Upper Marlboro resident who boards horses on her farm, said things are so bad that she is starting to hear stories about breeders abandoning their horses.
"Don't take your horse trailer to an auction and leave it unattended – you'll have two horses in your trailer when you drive away," she said. "Lots of people don't have money to feed their mares these days."
Philip Gottwals, president of Columbia-based research company Agricultural & Community Development Services, said people who breed show horses are faring better than people who breed horses for the racetracks. He said the bad market might help recreational riders by making horses more affordable.
"For the horse industry overall, it means more people are getting into it," he said.
But Goodall said that, for Maryland breeders, that might be too little, too late.
"Slots is definitely going to happen," she said. "Whether it's soon enough to save the horse industry is yet to be determined."
Staff writer Timmy Gelles contributed to this report.
E-mail Greg Holzheimer at email@example.com.