- The Washington Times - Saturday, July 31, 2004

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. has warned lawmakers that Maryland could lose the Preakness Stakes if they do not approve putting slots at racetracks, even though it would be difficult.

“I am concerned that the Preakness may not be here in five years,” said Mr. Ehrlich, a Republican. “I am concerned about the future of horse racing. I am concerned about what Pennsylvania will do, and I ask the [House] speaker to move on the bill.”

House Speaker Michael E. Busch, Anne Arundel Democrat, has blocked Mr. Ehrlich’s efforts to bring more than 15,500 slot machines to the state, including as many as 3,500 at Pimlico Race Course in Baltimore, home of the Preakness Stakes.

Mr. Busch called the Preakness “a tremendous economic and cultural benefit” to Maryland and downplayed Mr. Ehrlich’s concern.

“Magna Entertainment Corp., which owns the Preakness, has publicly committed to keeping it in Maryland and has given no indication of a plan to move it,” he said. “The House of Delegates has supported a number of efforts over the years to help the horse racing industry and the Preakness. We will continue to work with the Magna Entertainment Corp. to maintain the status of the Preakness and its presence in Maryland.”

The Preakness is the second leg in thoroughbred horse racing’s Triple Crown, which includes the Kentucky Derby and the Belmont Stakes. The Preakness began at Pimlico in 1873 and has remained there, except from 1890 to 1909, when it was moved to New York.

The annual race is Maryland’s top horse racing event and brings in about $7 million in revenue a year for Magna. The race also generated $29.5 million in revenue for state and local businesses in 2002, the most recent numbers available, said Andrea Harrison, a spokeswoman for the Department of Business & Economic Development.

Pimlico and the rest of Maryland’s struggling horse-racing industry face increased competition from venues in nearby Delaware and West Virginia, which feature slot machines that provide track owners with more money to award larger purses. The out-of-state venues draw $309 million a year in revenue from Maryland gamblers.

Pennsylvania recently enacted legislation to set up 61,000slot machines around the state.

Jim McAlpine, president and CEO of Magna Entertainment Corp., which has a controlling interest in Pimlico and owns the Santa Anita track in California, said the company has “no plans” to move the race, despite Maryland’s disadvantage.

“I think we are all concerned about the competitive landscape in Maryland,” Mr. McAlpine said. “But from our standpoint, we are committed to Maryland. We are committed to continuing to invest in Maryland.”

For Magna to move the Preakness, the company would violate a 1985 law binding the race to the state. Under the law, if Pimlico’s owners liquidate the rights to the event to another track outside Maryland, their taxes would skyrocket back to 1985 rates.

In addition, the state has the first right to purchase the event should it be sold. The Maryland Racing Commission also reserves the right to revoke all of Pimlico’s racing days if the race is moved.

Still, Mr. McAlpine welcomed Mr. Ehrlich’s interest.

“I am not surprised that he is concerned about the horse racing industry,” he said. “I am glad he is concerned.”

Mr. McAlpine also said that without slots at Pimlico and nearby Laurel Park, both Magna properties, the tracks will likely cut back on their roughly 220 days of live racing.

Delegate Tony E. Fulton, Baltimore Democrat, said Mr. Busch needs to give the governor’s slots bill a fair chance.

“It would be regrettable if the Preakness did move,” he said. “If we lose the Preakness, it would be extremely detrimental to the future of Baltimore city.”

But Delegate Kevin Kelly, Allegany County Democrat, has little hope Mr. Busch will change his mind.

“The speaker is not going to be happy until the Preakness is running at Santa Anita,” Mr. Kelly said.

For two years, Mr. Busch has led the defeat of Mr. Ehrlich’s effort to put slot machines at four horse tracks and two off-track sites along Interstate 95.

He instead has suggested a $670 million increase in income and sales taxes to help racing, improve public education and reduce a state budget shortfall. After the 2004 General Assembly ended in April, Mr. Busch said he would consider a referendum on slots, which Mr. Ehrlich said is not his “preferred option.”

Pennsylvania Gov. Edward G. Rendell, a Democrat, signed a bill in July to put slot machines at 14 locations in the state, making it the third state bordering Maryland with horse racing to have them.

Meanwhile, investors in the District are lobbying to put 3,500 slotlike video-lottery terminals in a new entertainment complex on New York Avenue in Northeast.


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