Horsemen, breeders reach agreement on Maryland-bred owner bonus program

by Frank Vespe

A deal agreed to by the boards of the Maryland Thoroughbred Horsemen’s Association and Maryland Horse Breeders Association will lead to the gradual phase-in of enhanced bonuses for owners of Maryland-bred horses.  Additionally, those bonuses will begin with the opening of the Laurel meet, which will allay concerns among some horsemen.

The deal must be approved by the Maryland Racing Commission.  The Commission meets on September 17, at which time it will determine whether to move forward by turning the agreement into regulations.  Bonuses for owners of Maryland-breds, coupled with improved breeder and stallion bonuses, have been a key goal of the Maryland Racing Commission, which sees them as the linchpin of efforts to revitalize the state’s breeding industry.

“At the end of the day, everybody came together” to implement the program, said Racing Commission chair Bruce Quade.  He described himself as “very happy” with the deal.

Under the accord — which is expected to replace regulations the Commission had moved to adopt at its June meeting (here) — owner awards will actually decline slightly in the remainder of 2013 versus earlier in the year.  During the Laurel fall meet, which opens September 19, the owner of a Maryland-bred that wins a maiden, allowance, or claiming race in which he ran for at least $20,000 will receive a 17.5 percent bonus, the same as in recent meets.  However, an added maiden bonus has been removed.

During the first condition book, which extends through Maryland Million day, October 19, those bonuses will be paid from the Maryland-bred fund, which has previously been the source of owner bonuses.  Following the first book, the bred fund and the purse account will split the bonus payments equally.  The purse account is substantially larger than the bred fund and receives 89 percent of the slots revenue directed to Thoroughbred racing and breeding (not including those funds directed to facilities).

In 2014, the percentage will remain the same, but bonuses will be paid for horses finishing first through third; in addition, the pool of eligible horses will expand to include those running for a tag of $10,000 or more — down from $20,000 this year.  In 2015 and 2016, the bonus will rise to 30 percent for horses finishing first through third and will apply to all races.

As the years progress, the responsibility for payment of the bonuses gradually shifts towards the purse account.  Once the Prince George’s County casino comes on line — expected to be in the middle of 2016 — all owner bonuses will come from the purse account, while the bred fund will continue to be responsible for breeder and stallion awards.  Thereafter, according to the agreement, up to six percent of the purse account will be designated for owner purse enhancements for Maryland-breds, to a maximum of 30 percent.

In return, the MHBA will continue to make its annual expense contribution — 11 percent of the cost of buying 46 additional racing days from the Maryland Jockey Club.  Starting with the Laurel meet, breeders of Maryland-breds will receive a 30 percent bonus when any horse they bred finishes in the money, and there will also be a 10 percent stallion bonus.

Maryland Horse Breeders Association president Josh Pons described the outcome as “a good deal for everybody.”

In an MHBA release, Maryland Thoroughbred Horsemen’s Association president Richard J. Meyer added, “I am pleased that the horsemen and breeders have resolved their differences for the best interests of Maryland racing.  This accord, together with the long-term agreement we jointly signed with the Maryland Jockey Club last fall, allows us to focus our collective energy on moving Maryland racing forward, while giving us the flexibility to meet the challenges of an evolving industry.”

Still, the deal, which trainer Katy Voss described as a “true compromise,” has elements that some on both sides dislike.

Some horsemen, for example, believe that the deal takes too much from general purses to bolster Maryland-breds, particularly in the early parts of the accord.  In the coming years, as part of the 10-year agreement among horsemen, breeders, and the tracks, the purse account will face challenges, as the split of takeout becomes less favorable to purses and more favorable to the track and as the horsemen must pay for new stalls at Laurel.  On Facebook, one trainer described what was happening as the MHBA trying to do an “end run” around the horsemen.

On the other side of the coin, some breeders are frustrated that the final deal demands more of breeders and less of horsemen than the original plan crafted the by Racing Commission’s breeding task force and approved the by Commission.

Trainer Donald Barr, a member of the MHBA board of directors, for example, said that, while he would support the agreement, “I’m not going peacefully.”  He, and some others who spoke off the record, maintained that the phase-in period was too long and that the MTHA’s assumption of the program was too slow in arriving.  “It starts now, but it really doesn’t start now,” Barr said.

What’s more, many on both sides of the debate believe that owner and breeder bonuses should be equal from day one, whereas in the current plan, the breeder bonus begins at 30 percent for all state-breds finishing in the money, versus the owners’ bonus of 17.5 percent for winners only and in only some races.

Still, people on all sides said that reaching agreement was paramount.  Larry Johnson, a member of both boards, lobbied for a deal he described simply as “palatable” because, he said, it was “critical” to achieve agreement.

“It was crucial to get this done,” Quade added.

Pons, the MHBA president, agreed that achieving a deal was critical but rejected the notion that the program was too slow to reach fruition.  “If you breed a mare in Maryland in 2014,” he pointed out, “by the time your baby is a two year-old, the program will be fully mature.”

And once the program is fully mature — with owners and breeders alike receiving 30 percent bonuses, while stallions generate 10 percent bonuses — it will substantially level the playing field with the state’s nearby competitors.  “This is the kind of thing that gets the attention of the sharpest people in the game,” said Pons, who with his brother Mike owns Country Life Farm.  “This is the chance to grow the Maryland industry, to grow our own product for our own trainers to train.”