ESPN Horse Racing

An on-going game of tug of war among the Magna Entertainment Corporation, Maryland politicians and Maryland voters might undergo a cease fire Saturday, the only day of the year when the state's racing industry looks like something other than death warmed over. But it will be back to business as usual next week as a nasty battle over legalization of slot machines at the state's racetracks will continue, with the future of the Preakness a big part of the dog fight.

"Obviously as a life-long Marylander, I hate to think this, but it would unrealistic not to consider it a possibility," Maryland Jockey Club President & CEO Joe DeFrancis said when asked if the Preakness might leave Pimlico.

Magna desperately needs slot machines to revitalize the sagging racing industry in Maryland. Standing in the way are a handful of key politicians who don't want them. Magna's only weapon in this fight is the Preakness and the corporation has become more vocal than ever when it comes to the race, its future and the possibility that the Preakness doesn't have to stay at Pimlico. Taking their prize possession elsewhere would cost the state a major sporting event that brings in tens of millions and is a source of civic pride. Maryland can't afford to have that happen and Magna knows it.

Magna could either run the Preakness at one of its other racetracks (Gulfstream, Santa Anita, Lone Star?) or sell the race to the highest bidder. Don't think that it can't happen.

I have never been a big fan of slot machines at racetracks and would rather see racing stand on its own considerable merits. Yet no one can argue with Magna's position that competition from slots in neighboring states is destroying Maryland racing.

West Virginia and Delaware have slots and they are on their way to Pennsylvania. The neighboring states have been able to pump up their racing products through slot-inflated purses. The effect on Maryland racing has been devastating as the quality and quantity of the fields at Pimlico and Laurel has plummeted as more and more horses and stables have been lured away to Charles Town and Delaware Park and their fat purses.

Maryland racing is fast becoming a minor-league sport and horseplayers don't want to bet on bad racing. A never-ending cycle has begun. The worse the racing gets, the less people will bet on it. Lower handle will mean a reduction in purses which will mean even worse racing and still lower betting figures.

So far, Maryland racing has managed to squeak by, but the worst it yet to come. Slots have been approved in Pennsylvania and are on their way to Philadelphia Park, which will be the first track in a major city to have slot machines. If they have been as successful as they have been at out-of-the-way places like Delaware Park and Charles Town, it's unimaginable what they're going to do at Philly Park., which sits in the middle of a huge population area. Management there is predicting their purses will rival those at Belmont Park and no one is doubting them.

With astronomical purses about to be offered in Pennsylvania, there is going to be a huge exodus of top stables and horses out of Maryland. It will even affect the breeding industry. Tim Ritchey, the trainer of Preakness favorite Afleet Alex, told the Associated Press that he is no longer breeding in Maryland and has sent his band of broodmares to Pennsylvania. He wants the foals to be registered Pennsylvania breds so that they can race for inflated purses that will soon be given out to locally bred horses at Philly Park

"Pennsylvania is going to hit us like a Mack truck," DeFrancis said.

Magna, which can't afford to just sit by idly, could easily decide the best course of action would be to run the Preakness elsewhere. Such a decision wouldn't just be out of spite. Moving the race might be the only step that can prompt local politicians to finally see to it that slots are approved. A one or two-year hiatus is possible before moving the race back to a Pimlico with slot machines. Magna must also consider whether or not it wants to hold its most important race at one of the worst, most rundown tracks in its family. With the owners having no incentive to put money into the place, Pimlico, a dump to begin with, has never looked worse.

"Looking at Maryland as a discrete business operation, we make money one day a year," DeFrancis said. "We lose money 364 days of the year. The money we make from the Preakness is transferable. The vast majority of the money we make on the Preakness comes from television rights fees and national and international wagering. The Preakness would be just as much of a money maker at Lone Star, Gulfstream or Santa Anita as it would be at Pimlico."

You can even take this one step further. At what point does Magna decide racing in Maryland is simply not worth it? Churchill Downs Inc. decided it could make more money by selling off Hollywood Park than by keeping it as a racetrack. Who is to say Magna won't come to the same conclusion with a reeling Pimlico and Laurel?

"In today's real estate market, particularly at Laurel, we have some very valuable real estate," DeFrancis said. "Suppose God came down from heaven and said the playing field will never be leveled, and Maryland will always be behind the eight ball and have to compete with all these tracks in our region with slots. Then what is the best way to look after the fiscal interests of your stockholders? You don't have to have a PhD from Wharton to say to yourself, we have hundreds of millions in dollars real estate assets, worth far more than the original purchase price, and we have an asset in the Preakness that generates $10 million a year in income whether the location of that asset is Baltimore, Miami, Dallas or Los Angeles. We are deploying our others assets that are worth a couple hundred million in real estate value to lose money 364 days a year. Again, you don't have to be a PhD from Wharton to figure out that our course of action ought to be abundantly clear."

Which is long-winded way of saying don't put it past Magna to abandon a sinking ship.

The obvious answer is to give Magna what it wants. Maryland already has legalized racing on horse racing and state-run lottery and Keno games. Why draw a line in the sand when it comes to slot machines? Slots would only save the Preakness, save the Maryland racing industry and provide the state with hundreds of millions in badly needed revenue.

Instead, Maryland politicians want to play a game of chicken with Magna and it's a game they might just lose. Back when it really didn't matter, the Preakness was run at tracks in New York in 1890 and from 1894 through 1908. Don't be shocked if it hits the road again.