Questions and (some) answers about Pimlico Plus * The Racing Biz

But it’s a long way from here to there: laws, agreements, and the creation and staffing of a new nonprofit organization are just a few of the many steps between the present and the future.

How long is the path? In a statement, Gov. Wes Moore praised neither an agreement of principles nor an agreement in principle. Instead, he welcomed “the framework of an agreement in principles to preserve and promote the Thoroughbred racing industry in Maryland.”

So, yes, there is still a long way to go.

This also means that there are many questions. Here are some of them:

WHY DOES PIMLICO PROPERTY SURVIVE LAUREL OR ANY OTHER SITE?

From a pure racing perspective, Pimlico Plus makes little sense. If the financial goal is to reduce numbers to one racetrack, it would make more sense to choose a venue large enough to accommodate all the horses the industry deems necessary to maintain a viable racing calendar. Pimlico is not that place; Consultants’ plans call for around 560 horses to be stabled at Pimlico, about half of what the industry thinks is needed.

Then why Pimlico? With the state footing the bill, politics matters, and after the failure of the Stronach Group’s Laurel “supertrack” proposal, which blew up spectacularly in Annapolis, all the political momentum on race issues is focused on Pimlico. With a governor from Baltimore and House and Senate leadership from Baltimore, Pimlico’s survival is a prerequisite for any project.

The new Pimlico is expected to cost around $280 million.

WHAT ARE THE TRAINING CENTER PLANS?

Because Pimlico is too small to accommodate a consolidated racing industry in Maryland, the establishment of an off-site training center is also necessary. The authority chose three finalists: the old Bowie Training Center, Shamrock Farm in Woodbine and Mitchell Farm in Aberdeen.

Authority Chairman Greg Cross said on a Maryland Thoroughbred Horsemen’s Association (MTHA) Zoom call that the authority “has been told that the Legislature wants to become heavily involved in the training center’s plans.” If so, that would give the Aberdeen location a head start. Cross said he expects the decision will be made by April or May.

The training center is expected to cost about $115 million, excluding acquisition costs, and will have stables for about 640 horses.

CHECK OUT THE LATEST OFF TO THE RACES RADIO!

Under the plan, the Stronach group will relinquish control of racing. Do you agree with all of this?

According to board members Alan Foreman, who represents the Maryland Thoroughbred Horsemen’s Association, and Greg Cross, chairman, yes.

“The Stronach group was completely cooperative. They’re looking for a seamless transition,” Foreman, also general counsel for the Maryland Thoroughbred Horsemen’s Association, said in an interview. “From what I understand, they will provide whatever is needed to keep racing in Maryland. This is by no means an acrimonious situation.”

This is important for many reasons, not the least of which is this: During the time that Pimlico is closed, the authority and the non-profit racing organization will need to lease Laurel in order to continue racing.

“The Stronach Group and the Maryland Jockey Club remain strongly committed to the revitalization of Thoroughbred racing in Maryland,” Belinda Stronach of the Stronach Group said in a statement, adding: “We look forward to a successful racing season in 2024.” “We are finalizing the details of an agreement that will continue the Stronach Group and the Maryland Jockey Club’s positive relationship with racing in Maryland for years to come.”

Is the Stronach Group giving up control of the Preakness?

No. Quite the opposite. The new non-profit racing organization will license use of the Preakness name and associated intellectual and personal property from The Stronach Group.

The next obvious question – what this will cost – is currently unknown.

“I don’t want to go into too much detail,” authority Chairman Greg Cross said at an MTHA Zoom meeting. “But essentially we would pay an annual fee, but we would have full control of the breed, the Black-Eyed Susan and the Preakness, and we would have full control of all revenue streams.”

Are there other examples of similar agreements? As far as he knows, not in racing, Foreman said.

WILL THE SWITCH TO PIMLICO HAVE AN IMPACT ON TURF RACING?

Yes. The Laurel turf field is 142 feet wide and can have six different running tracks. Each day Laurel is on the turf, he runs races on two different “tracks,” minimizing wear and tear on each area of ​​the turf.

As a result, Laurel hosted 273 turf races in 2023. According to the MTHA, these races averaged 9.2 horses, while an average of 6.8 horses competed per dirt race at Laurel during the first 11 months of the year. These large fields are good for bettors and therefore good for grip.

A 70-foot-wide lawn is planned for the new Pimlico. This limits the number of possible track settings and, accordingly, the number of turf races that can be carried out. Currently Pimlico – and probably the new version as well – races on the rail at either zero feet or 20 feet; Every day all races must be carried out with the same attitude.

Foreman said he believes there “might be an adjustment to the racing schedule because you probably can’t afford 174.” [live racing] Days like we’re doing right now.” That adjustment could come in the summer, when racing occurs at Colonial Downs, Delaware Park and Monmouth Park and demand for horses increases.

Another option for more turf, he said, could be “using Fair Hill as a destination for a turf festival.”

But some local riders are skeptical, with one, who wished to remain anonymous, saying: “It won’t do us any good.”

How much money will the nonprofit need to get up and running?

Illustration of preferred option 2 for Pimlico from the Populous report.

That’s a good question that doesn’t currently have a public answer.

Aside from the construction costs – which are not the responsibility of the non-profit organization – their needs will not be insignificant. The Stronach Group says it lost about $95 million on operations in Maryland over the last decade and spent another about $70 million on capital projects. The company has stated publicly and privately that this is a revenue problem that all possible efficiencies cannot solve.

How can the nonprofit bridge this gap?

Neither Foreman nor Cross would go there.

“I don’t want to get into the financial aspects,” Foreman said. “The state currently has a huge budget deficit. I think the state will support us if necessary, which is what we’re trying to do, but we still have a lot of work to do to bring the nonprofits together.”

Still, there may be steps the nonprofit can take. Although not addressed in the Authority’s report or in the consultants’ supporting analyses, measures could be taken, such as: Such as lowering takeouts, reducing the influence of computerized betting on pools, and introducing penny breaking to make Maryland a national leader in the quality of its gambling product.

It could also explore alternative sources of revenue. Cross told the MTHA meeting that Pimlico’s plans include opening a sports betting office in the new facility, something the MJC in Laurel has not done, although it has built a space for that specific purpose.

The non-profit organization will likely need to either open its own prepayment betting shop or partner with an existing company on favorable terms. Foreman also pointed to iGaming – online betting often on casino games and other games of skill – as another possible source of revenue, but one that would require legislative action.

“I think iGaming is really an area that we need to be a part of,” Foreman said.

Another possibility is historical horse racing machines (HHR), which use the results of previous horse races to power a slot machine-like device. The Crossroads Consulting report specifically noted the “significant positive impact” of HHR in several other states, including Virginia and Kentucky.

But Cross said at the MTHA meeting that HHR “is not being considered at this time.”

This would require at least a change in the law and possibly also a constitutional change. Furthermore, casinos will almost certainly oppose the addition of HHR, and the addition of HHR could undermine the racing industry’s claim to a share of slot revenue.

What about accommodation for back workers?

While some backstretch workers traditionally receive on-site housing, this is not part of these plans. Instead, backstretch workers at both Pimlico and the training center, whichever is chosen, are expected to be housed off-site in nearby neighborhoods.

There was some pushback during the MTHA Zoom call, particularly regarding accommodations at the training center. Coach Ferris Allen pointed out that many erector spinae do not drive and therefore have limited mobility. But Cross said there is “currently no money for accommodation” at the training center, as housing 150 people is expected to cost $25 million.

WHAT HAPPENS NEXT?

Many things have to happen more or less at the same time.

For one thing, Foreman said what he called “remedial legislation” is needed to adjust funding sources and eliminate Laurel as a target for funding and improvements. Look for this to happen in the session that began on January 10th.

The authority has to take a final decision on a training center and acquire the necessary land. It must reach an agreement with the Stronach Group to acquire Pimlico, take over current racing, lease back Laurel if Pimlico closes for construction, and license the Preakness and Black-Eyed Susan. It needs to get to work identifying or creating a nonprofit operator to manage racing on behalf of the authority.

If all goes according to plan, 2024 will be the last Preakness tournament in the current PImlico and 2027 will be the first in the new PImlico.

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