Empty Promises to Save a Dead Industry

More empty promises for racing
Our view: Stronach's announcement that he'll keep Laurel open looks premature and doesn't erase the thoroughbred industry's problems
Let's hope that by now Maryland horsemen have learned not to get their hopes up when Frank Stronach makes big promises.

A day after the owner of Maryland's thoroughbred tracks promised to keep Laurel Park open, Penn National, his partner in the Maryland Jockey Club, is throwing cold water on it. A Penn National spokesman says the company was not consulted before Mr. Stronach reversed course on the Laurel closing and disagrees with him. Penn National has equal say over big decisions like this one, so it seems reports of Laurel's resurrection may have been greatly exaggerated.

In the absence of slots revenue, Penn National, which must answer to shareholders, has no rational reason to continue investing money in a business that's losing millions a year, and its stance is that the only way forward is substantial cost-cutting, including closing Laurel.

The crux of the issue is that we learn, in the aftermath of voters' decision to allow the Anne Arundel slots parlor to be built at Arundel Mills, that the line we've been fed for years about the symbiosis between slots and horse racing isn't exactly true.

When Maryland was debating slots, the horse racing industry insisted that it needed purse supplements and breeder incentive funds to compete with racetrack casinos in Delaware, West Virginia and Pennsylvania. Those states had funneled a portion of their casino revenue into such funds, and as a result, purses were higher there and better horses raced there. Bred funds multiplied the effect by providing an incentive for horse farms to relocate there as well. The racing industry argued that if Maryland established generous purse subsidies and bred funds, then it could attract those better horses to Maryland tracks again. Better horses meant better races, and better races meant more people going to the track and placing wagers.

The Maryland legislature bought the theory and allocated as much as $100 million a year to purse subsidies and bred funds, plus as much as $40 million a year in matching funds to spruce up the tracks.