Racing Commission set to consider agreement to keep horse tracks operating

Thoroughbred industry officials and owners of the Pimlico and Laurel Park tracks apparently have reached an agreement after difficult monthslong negotiations, a deal they are hoping to present Tuesday for approval at a meeting of the Maryland Racing Commission, two people with knowledge of the sensitive talks said Monday evening.

Details of the agreement were scant Monday, but part of the negotiations have dealt with the horsemen and breeders giving up a greater percentage of their share of purses — racing’s prize money — to the track owners to underwrite operating expenses. Much of the other discussions have involved determining where and when thoroughbred horses train and race, and propping up the ailing industry by reducing costs at the two thoroughbred tracks.

Negotiations had been expected to continue up to the last minute Tuesday, before the Racing Commission’s 12:30 p.m. meeting at Laurel Park. It was unclear late Monday whether all the details had been finalized.

The current agreement between the Maryland Jockey Club — a subsidiary of the Canada-based Stronach Group — Maryland Thoroughbred Horsemen’s Association and Maryland Horse Breeders Association expires at midnight June 30, and must be approved by the Racing Commission.

The agreement, which has covered operation of the thoroughbred tracks for the last 10 years, was extended six months from Dec. 31, 2022, to June 30. The new agreement is expected to cover a much shorter term, likely only through the end of the year.

The last week of negotiations have taken place against the backdrop of the May 27 announcement of the closure of the off-track betting (OTB) facilities at Pimlico Race Course in Baltimore — and then an about-face five days later by The Stronach Group’s 1/ST Racing & Gaming company, saying it was “reassessing” the decision.

On May 31, Maryland Matters reported that Mike Rogers, acting president of the Maryland Jockey Club, e-mailed track employees that the Stronach subsidiary was closing the Pimlico OTB on June 30, the same date the agreement with the horsemen and breeders was set to expire.

The day after, on June 1, Aiden Butler, chief executive officer of 1/ST Racing & Gaming, reversed course, writing to employees that the company was “reassessing” the closure and that “no decision has been made at this time” about the Pimlico OTB.

“As we continue our assessment of the Pimlico OTB operations, we are committed to working closely with your union, elected officials and government agencies,” Butler wrote.

He also wrote, “In our previous communication, we mentioned the possibility of closing the Pimlico OTB during the summer months when it is not utilized by our patrons.”

Such a statement, however, was nowhere to be found in Rogers’s previous e-mail to employees. That e-mail was quite final in its language and tone.

Rogers specifically cited “financial challenges … faced in recent times” as the reason for the closure. “This decision was not made lightly,” he wrote.

“The Pimlico OTB has been a valuable part of our organization for many years, providing a convenient location for our customers to enjoy thoroughbred racing,” Rogers wrote. “Understandably, this news may come as a disappointment to many of you.”

He told the workers that the company would now focus on the track staff.

“In the coming weeks, we will be working closely with affected employees to provide resources and assistance as we wind down operations at Pimlico,” he wrote.

The Maryland Racing Commission referred all questions about the announcement to the state Department of Labor, whose Racing Division provides its staff.

The Labor Department declined any comment on the OTB closure or reversal.

The union representing workers at the track, United Food & Commercial Workers Local 27, did not respond to queries.

Closure of the Pimlico OTB was not on the Maryland Racing Commission’s agenda for Tuesday, though the matter is expected to be brought up. The commission, which issues permits for OTB facilities in the state, has no say over a company’s decision to shut down an operation.

It was unclear Monday night what effect, if any, the agreement between the track owners, horsemen and breeders might have on the Pimlico OTB closure.

More than $11.3 million was wagered through simulcast betting at Pimlico in the 2021 calendar year, according to the Racing Commission’s annual report that year, its most recent. Pimlico was open for wagering on 199 simulcast days in 2021, in addition to 59 live racing days, the annual report shows.

Earlier this year, the General Assembly created the Maryland Thoroughbred Operating Authority, a panel with sweeping powers that would keep racing operating, should the negotiations between the Maryland Jockey Club, the horsemen and breeders reach an impasse. The authority would also be responsible for developing a new model for racing in Maryland.

To date, appointments to the new board, which came into existence last Thursday, June 1, have yet to be made.

State officials have been trying to jumpstart stalled improvements at Pimlico and Laurel that were approved by the General Assembly more than three years ago — a role the new authority would also have.

In its 2020 session, the legislature authorized the sale of $375 million in bonds for much needed improvements at the two mile-long tracks, but the bond sale, contingent on the approval of certain still-unsigned agreements, has yet to take place. Since then, cost estimates have nearly doubled, as any sort of progress has all but stopped.

There is some question as to whether thoroughbred racing at two tracks can be supported in Maryland, and there has been a push in recent months to consolidate year-round racing at one track, rather than two. Although Laurel Park was once touted as a potential “supertrack” in the state, the focus has now shifted to Pimlico — home of the Preakness Stakes in Baltimore — though that would require finding a location for a training facility and more than 1,000 additional horse stalls.

Editor’s Note: This story was updated to clarify details of negotiation over purse money.

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