Friday, May 15, 2009

Lagging ticket sales for Saturday’s Preakness Stakes portend more than just a bad day for Maryland’s already threatened horse racing as a whole, industry analysts say.

Maryland Jockey Club Owner Tom Chuckas says he expects the recession to depress ticket sales for the middle leg of the fabled Triple Crown by about 10 percent to 12 percent, cutting deeply into an event that helps to finance the whole year’s racing.

“The economy being what it is, one weekend that makes or breaks the whole industry is a pretty precarious business model,” said Maryland bankruptcy lawyer Alan Grochal. “In a recession, the first thing to go is discretionary income, and for a lot of people that means so long to spending the weekend at a horse race.”

The recession isn’t the only problem. Some racing fans are expected to stay home because of resentment over a new provision that outlaws attendees from bringing alcohol. Advance ticket sales were down about 17 percent earlier this month, and sponsorship money is down 10 percent.

Mr. Chuckas still expects the race to draw the gold standard of 100,000 spectators, and ticket sales are expected rebound some because of interest in 8-5 favorite Rachel Alexandra, the first female horse to be so honored by the oddsmakers since 1988. No filly has raced in the Preakness since 1999, and one has not won the Preakness since 1924.

But it’s a slim hope on which to pin the hopes of a horse-racing tradition whose very survival is in doubt.

The race’s owner, Magna Entertainment Corp., filed for Chapter 11 bankruptcy in March, and until recently was planning to put all of its Maryland assets, including the Preakness and its track, Pimlico Race Course in Baltimore, up for sale to the highest bidder.

Efforts to address the financial struggles of horse racing, such as using revenue from newly legalized slots machines, also might encounter problems.

About 7 percent of estimated slots revenue will be allocated to increase purses and award breeders, said Jeff Hooke, a Bethesda-based gambling analyst.

Mr. Hooke said that in most states that have adopted a similar strategy, such as New York, Delaware, West Virginia and Louisiana, problems remain.

“The theory hasn’t worked so well in other states. Except for West Virginia, there was no big gain in breeding. Neither was there a big jump in attendance or betting,” he said.

State officials are doing their best to ensure the Preakness is not affected by the economic turmoil.

Gov. Martin O’Malley and Maryland lawmakers intervened during the waning hours of the 2009 General Assembly session by passing a bill that gave the state eminent domain powers over the Preakness, Pimlico and all of Magna’s other Maryland-based assets.

State law gives Maryland the right to purchase the Preakness in the event the race is put up for sale, but it remains to be seen whether the law could withstand the inevitable court challenges.

Magna has since put the sale of its Maryland assets on hold, saying it did not want to let concerns over the Preakness become a distraction as the company tries to sell other lucrative racetracks in California, Ohio, Oklahoma and Oregon.

However, Magna’s attorneys have not ruled out the possibility that their Maryland properties, which also include Laurel Park Racetrack and the Bowie Training Center, will be sold off in the future.

“At this time, the Maryland assets are not part of the assets subject to the sale motion. However, parties continue to do due diligence surrounding all of Magna’s assets,” said Magna attorney Brian S. Rosen.

So in a few years, is it possible those who witness the Preakness Stakes will see the winner christened with a blanket of Delaware peach blossoms or California poppies instead of the traditional Maryland black-eyed Susans?

Industry analysts are skeptical.

“I sincerely doubt we’ll see the Preakness leave Maryland. It’s a Super Bowl in Baltimore. It’s a phenomenal experience, and we can’t allow that to slip through our fingers,” said Gerry Evans, a lobbyist for the Maryland Thoroughbred Horsemen’s Association.

Even so, there has not been this much speculation over a horse race in Baltimore since just before Seabiscuit took on War Admiral during the 1938 Pimlico Special.

“There’s a whole lot of commotion, a whole of worrying, and I think it’s unfounded. I mean just thinking about it, the very notion of a Preakness without Baltimore is just insane,” said Donald Litz, owner of the Maryland Stallion Station, which operates a pair of stud farms in Darlington and Woodbine.

The Preakness has been the crowning jewel for Maryland horse racing since 1873, when Maryland Gov. Oden Bowie named the race after a colt raised by legendary horse breeder Milton Holbrook Sanford at his Preakness Stables in Wayne Township, N.J.

The first winner, Survivor, won by 10 lengths for a purse of $2,050. To this day, it is still the largest Preak#ness margin of victory.

Copyright © 2023 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

Click to Read More and View Comments

Click to Hide