A fog over Maryland's forlorn racetracks
The more we learn about the bidding war for Maryland's two thoroughbred race tracks, the less we seem to know about what's really happening.
Six initial bids for Pimlico, Laurel and the Bowie Training Center were submitted last Friday. The names of three bidders are public or at least who's the lead partner in each group. As for the other groups, it's a guessing game.
The whole thing is cloaked in mystery.
Baltimore Orioles owner Peter Angelos previously said he was interested in buying the race tracks in partnership with former Democratic Party chief Wayne Rodgers and real estate developer Nathan Landow. But Angelos decided not to enter the auction.
It's assumed the current track owner, Frank Stronach, may still be in the mix. He is a racing fanatic. He loves the attention he gets during the running of Pimlico's famed Preakness Stakes. Though his racing corporation, Magna Entertainment, is bankrupt, his other companies are raking in profits. The wealthy Stronach may be angling to retain the Preakness as a prestigious play-toy.
Two major race track operators, Churchill Downs and Penn National, have long coveted the Preakness and live racing from Maryland that could be simulcast profitably around the country. We don't know if either or both is involved in one of the bidding groups.
There's also Baltimore retail developer Carl Verstandig, who is interested in the real estate at Laurel, Bowie and Pimlico, not the tracks. He says he's bidding with an unnamed partner who owns tracks in California. He may be looking to grab this land at a fire-sale price.
Baltimore retail and entertainment developer David Cordish is bidding on the Maryland race tracks, too. At this early stage, his plans for Pimlico and Laurel haven't been revealed. Is he serious about putting the money up to improve and operate two struggling sports facilities? Or does he look at the properties primarily as sites for his successful mixed-use developments?
And then there are the former track owners, Joe De Francis and his sister, Karin. They want to undo the damage done to Pimlico and Laurel by Magna Entertainment's shameful neglect. But do their mystery partners have deep enough financial pockets to renovate and vigorously promote the racing facilities while also developing the surrounding acreage?
There's the added question of slots at the tracks. Magna screwed up by not submitting a qualified bid for the Anne Arundel County slots license. The state has awarded that license to Cordish and his Arundel Mills site. This could be tied up in litigation for a long time.
Joe De Francis continues to maintain that only slots at the Laurel track can save thoroughbred racing in Maryland. Placing slots at Arundel Mills, he says, would be Laurel's death knell.
If De Francis somehow gets the state to reverse its decision and award a slots license to Laurel, his group then would have to come up with an additional $200 million to construct a glitzy slots facility at Laurel. In the current economic climate, that might be difficult particularly with Maryland's ridiculously low profit margin for slots operators.
Eventually, slots may come to Maryland's race tracks. They are a natural setting for those gambling machines, as is being proved in dozens of other states, including Delaware, Pennsylvania and West Virginia. But that is years down the road.
A more immediate scenario is proposed by the new owner of Rosecroft Raceway in southern Prince George's County casino table games. Real estate developer Mark Vogel wants to build a poker room at the harness track. This same arrangement has been successful at other tracks and casinos across the country.
Cash poker games already take place illegally throughout Maryland. It's all the rage on TV sports networks.
Meanwhile, the large slots and racing complex at Charles Town, W.Va., has just won voter approval to legalize table games including poker. Pennsylvania's governor is pushing hard for the same thing at the Keystone State's numerous slots locations. He's also trying to expand the number of slots facilities in Pennsylvania.
Maryland is way behind other states in capturing revenue from legalized gambling.
The six bidders on Laurel and Pimlico recognize that eventually Maryland policymakers will embrace, however reluctantly, what's happening around them. Those forlorn race tracks then will be worth a lot more as multiple entertainment centers. They probably will contain an eclectic mix of shopping, restaurants, gambling options, night clubs and other forms of leisure activity.
The bidders also are aware that even without slots at the two tracks, the new track owner will receive a huge pot of cash after Maryland's slots facilities open.
Just with revenue from the three slots sites in Baltimore City, Cecil County and Worcester County, the two thoroughbred tracks should gain roughly $28 million a year in higher purse awards and $10 million a year in money for renovations.
And if the Arundel Mills slots site ever opens, the proceeds to thoroughbred tracks could easily double.
Will this solve thoroughbred racing's problems in Maryland? Of course not.
But wagering and attendance and track income could jump dramatically as higher caliber horses, trainers and jockeys return to Maryland to compete for increasingly attractive purses.
Right now, though, it's a waiting game until early January. That's when, with any luck, the bankruptcy court judge in Delaware will allow the auction for Laurel and Pimlico to proceed on schedule.
And once we know the name of the new owner, we can start lifting some of the gloom and uncertainty that hangs like a fog over Maryland's forlorn race tracks.
Barry Rascovar is a longtime State House columnist and a communications consultant. His e-mail address is email@example.com.