Maryland legislature forms racing authority to facilitate redevelopment plans

By: Tom LaMarra

Posted: April 14, 2023

Legislation that will create the Maryland Thoroughbred Racetrack Operating Authority, an entity that will participate in the development of racing and training facilities in the state, passed the state Senate by a 47-0 vote April 6 and the House of Representatives by a vote of 132-2 on April 10, the last day of the 2023 General Assembly session.

If signed into law by Gov. Wes Moore—he is expected to do so—the legislation will take effect June 1, one month before the end of an extended negotiating period for a new racing agreement among the Maryland Jockey Club, Maryland Thoroughbred Horsemen’s Association and Maryland Horse Breeders Association. The 10-year racing agreement expired Dec. 31, 2022, and the negotiations were extended through June 30.

The legislation (Senate Bill 720) also comes amid a lengthly delay in the redevelopment of Laurel Park and Pimlico Race Course as authorized by the 2020 Racing and Community Development Act. The new MTROA would take the lead on that in conjunction with the Maryland Stadium Authority.

The House Ways and Means Committee April 7 held a brief hearing on Senate Bill 720 and sent it to the full House with a favorable vote. MSA member Bill Cole, who has been involved in the racetrack redevelopment plan since 2019, briefed the committee on the bill.

Cole said the MTROA will be similar to the MSA as a state agency and that, if necessary, would “prop up a new ownership group for racing and training” should the The Stronach Group (1/ST Racing), which owns the MJC, opts to exit Maryland racing. He said the legislation creates the framework to facilitate any new operating structure.

“Clearly, there is a lot going on in this industry,” Cole said.

The legislation states the MTROA will study and make recommendations it finds are in the best interests of Thoroughbred racing, and develop new and existing racing and training facilities. If necessary, the authority will manage and oversee day-to-day racing operations and live racing days and, in coordination with the Maryland Economic Development Corp., acquire property for operations; enter into any agreements, leases, partnerships or contracts needed for pari-mutuel wagering and compliance with rules and regulations.

The MTROA will be in place for four years and one month but, as noted during the committee hearing, could be extended through statutory changes if necessary.

Five members of the MTROA will be appointed by the governor: one of two nominated by the MTHA; one of two nominated by the MHBA; and three other members who possess relevant industry, business or government experience (one in real estate or financial services). Others are the Chair or Executive Director of the both the MSA and MEDCO; one who is not an elected official appointed by the Senate President; and one who is not an elected official appointed by the Speaker of the House.

Three non-voting ex-officio members will be appointed by the governor: one who resides near Laurel, one who resides near Pimlico, and one who resides near the old Bowie Training Center, which is being given to the city of Bowie and University of Bowie. The other non-voting ex-officio member will come from the Maryland Racing Commission.

The MRTOA on or before Dec. 1, 2023, must report to the Senate Budget and Taxation Committee, House Appropriations Committee, and House Ways and Means Committee on “the feasibility of establishing at least two alternative Thoroughbred training centers in the state, a review of best practices for Thoroughbred racing industry operating models and recommendations for operating models in the state, and the progress of the Pimlico and Laurel Park racing facility redevelopment plans.”

The Racing and Community Development Act authorized about $375 million in bonds to pay for the rebuilds of Laurel and Pimlico. That cost has almost doubled for multiple reasons, and it remains to be seen what the model will look like going forward. A fiscal note that accompanies the most recent legislation notes that as of Feb. 1, 2023, there was about $53 million in the facilities fund.

In addition, the 2020 law calls for TSG to transfer the Bowie property to the City of Bowie and Bowie University for alternative uses but that has not yet occurred. The legislation creating the MRTOA now sets a deadline of Dec. 31, 2024, for conveyance of the property, and the move has opened speculation that the property could be in the mix again as part of discussions regarding identification of properties that can be used for training centers.

Given tax issues and structural deficiencies identified by 2022 studies, the Laurel racetrack property may or may not be part of the equation. The Pimlico redevelopment is expected to proceed, but with other uses planned for the property’s perimeter a standard barn area and regular training could not be accommodated.

Meetings with stakeholders are expected to be held given the Dec. 1 deadline to identify viable options for Maryland Thoroughbred racing facilities.