But there’s a long way from here to there: legislation, agreements, and the creation and staffing of a new nonprofit are only some of the many steps between the present and the future. 

How long a way? In a statement, Gov. Wes Moore didn’t laud an agreement among the principles, or even an agreement in principle. Instead, he hailed “the framework of an agreement in principle to preserve and enhance the Thoroughbred racing industry in Maryland.”

So, yeah, a ways to go.

That means, too, that a lot of questions are out there. Here are some of them:

WHY DOES PIMLICO SURVIVE RATHER THAN LAUREL OR ANOTHER SITE?

Strictly from a racing perspective, Pimlico Plus doesn’t make a lot of sense. If the financial goal is to cut down to one track, it would make more sense to choose a venue big enough to house all of the horses the industry believes it needs to maintain a viable racing calendar. Pimlico is not that place; the plans outlined by consultants call for around 560 horses to be stabled at Pimlico, about half of what the industry thinks it needs.

Why Pimlico then? Since the state is footing the bill, politics matters, and after the debacle of the Stronach Group’s Laurel “supertrack” proposal, which blew up spectacularly in Annapolis, all of the political momentum on racing issues has been towards Pimlico. With a Governor from Baltimore and House and Senate leadership from Baltimore, Pimlico’s survival is a prerequisite to any project.

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

WHAT ARE THE TRAINING CENTER PLANS?

Since Pimlico is too small to house a consolidated Maryland racing industry, that also necessitates the creation of an off-site training center. The Authority has settled on three finalists: the old Bowie training center, Shamrock Farm in Woodbine, and Mitchell Farm in Aberdeen.

Authority chairman Greg Cross told a Maryland Thoroughbred Horsemen’s Association (MTHA) Zoom call that the Authority had been “told that the Legislature would want to weigh in heavily” on the training center plans. If so, that would seem to give a leg up to the Aberdeen site. Cross said he thought that choice would be made by April or May.

The training center is expected to cost around $115 million, outside of acquisition costs, and have stabling for 640 or so horses.

CHECK OUT THE LATEST OFF TO THE RACES RADIO!

UNDER THE PLAN, THE STRONACH GROUP WILL GIVE UP CONTROL OF RACING. ARE THEY ON BOARD WITH ALL OF THIS?

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

“The Stronach Group has been totally cooperative. They are looking for a seamless transition,” Foreman, also the Maryland Thoroughbred Horsemen’s Association general counsel, said in an interview. “My understanding is they’ll provide whatever is necessary to maintain Maryland racing. This is not an acrimonious situation by any stretch.”

That’s important for many reasons, not the least of which is this: during the period when Pimlico is closed, the Authority and the racing nonprofit will need to lease Laurel to continue racing. 

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

IS THE STRONACH GROUP GIVING UP CONTROL OF THE PREAKNESS?

No. Quite the opposite, in fact. The new nonprofit to run racing will license the use of the Preakness name and ancillary intellectual and personal property from the Stronach Group.

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

“I don’t want to get into too many details on that,” Authority chairman Greg Cross told a Zoom meeting of the MTHA. “But essentially, we would be paying an annual fee but would have full control over the race, the Black-Eyed Susan and the Preakness, and we would have full control over all revenue streams.”

Are there other examples of similar arrangements? Not in racing that he’s aware of, Foreman said.

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

Yes. The Laurel turf course is 142 feet wide and can have six different running lanes. In any given day when on the turf, Laurel holds races on two different “courses,” allowing it to minimize wear-and-tear on any one area of the grass.

As a result, in 2023, Laurel played host to 273 turf races. Those races had an average field of 9.2 horses, versus an average of 6.8 horses per dirt race at Laurel during the first 11 months of the year, according to the MTHA. Those big fields are good for bettors and, thus, good for handle.

At the new Pimlico, the plans call for the turf course to be 70 feet wide.  That will limit how many rail settings are possible and, correspondingly, the number of turf races that can be run. Currently at Pimlico — and likely in the new version — races are run with the rail either at zero feet or at 20 feet; each day, all races must be run at the same setting.

Foreman said he thinks there may be “an adjustment in the racing schedule because you… probably can’t afford to do 174 [live racing] days as we’re doing right now.” That adjustment could come during the summer, when Colonial Downs, Delaware Park, and Monmouth Park all are racing, ratcheting up demand for horses.

Another possibility for added turf, he said, could be to “take advantage of Fair Hill as a destination site for a turf festival.”

But some local horsemen are dubious, with one, who wished to remain anonymous, saying, “That’s not going to do anything for us.”

HOW MUCH MONEY WILL THE NONPROFIT NEED TO GET UP AND RUNNING?

That’s a good question and one for which, at the moment, there is no public answer. 

Leaving aside the construction costs – which will not be the nonprofit’s area of responsibility – its needs will not be inconsiderable. The Stronach Group says that it has lost about $95 million in Maryland over the last decade in its operations and that it’s spent another $70 million or so on capital projects. The company has said publicly and privately that that is a revenue problem, which won’t be overcome by whatever efficiencies might be found.

How will the nonprofit bridge that gap? 

Neither Foreman nor Cross would go there.

“I don’t want to get into the financial aspects of it,” Foreman said. “The state has a tremendous budget deficit right now. I think the state will backstop what we are trying to do if necessary, but we have a lot of work to do to put the not-for-profit together.”

That said, there may be steps the nonprofit can take. Though unaddressed in either the Authority’s report or the consultants’ supporting analyses, it could take steps such as lowering takeout, reducing the influence of computer-assisted wagering on pools, and adopting penny breakage to make Maryland a national leader in the quality of the gambling product.

It could also examine alternative revenue streams. Cross told the MTHA meeting that the Pimlico plans include opening a sports book at the new facility, something the MJC has not done at Laurel despite building out a room for that specific purpose.

The nonprofit will likely need either to open its own advance depositing wagering operation or partner with an existing company on favorable terms. Foreman also pointed to iGaming – online wagering often on casino games and other skill-based games – as another possible revenue stream, though one that would take legislative action.

“I think iGaming is really an area we need to participate in,” Foreman said.

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

But Cross told the MTHA meeting that HHR “is not contemplated right now.”

That’s because it would require at a minimum a legislative change and quite possibly a constitutional amendment. What’s more, casinos are almost certain to fight the addition of HHR, and adding HHR could undermine the racing industry’s claim to a share of slots revenue.

WHAT ABOUT HOUSING FOR BACKSTRETCH WORKERS?

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

There was some pushback during the MTHA Zoom call, especially with regards to housing at the training center. Trainer Ferris Allen pointed out that many backstretch workers don’t drive and so have limited mobility. But Cross said that “at this time, there’s no money for” housing at the training center, given that housing is expected to cost $25 million to house 150 people.

WHAT HAPPENS NEXT?

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

For one thing, Foreman said that there will need to be what he called “remedial legislation” to adjust funding sources and also eliminate Laurel as a target of funding and improvements. Look for that to happen in the session that began January 10.

The Authority will need to come to a final decision on a training center and acquire the necessary property. It will have to reach an agreement with the Stronach Group to acquire Pimlico, take over day-to-day racing, lease back Laurel when Pimlico closes for construction, and license the Preakness and Black-Eyed Susan. It will have to get to work identifying, or creating, a nonprofit operator to manage racing on the Authority’s behalf.

If all goes according to plan, 2024 will be the final Preakness contested at the current PImlico, and 2027 will be the first at the new PImlico.