For Maryland racing, ‘the status quo is not going to work’. Under a new authority, the next year is pivotal.

Maryland thoroughbred racing seems to be running in circles.

Revenue shortfalls, waning popularity and decaying racetracks have beleaguered one of the state’s treasured pastimes. Stakeholders — 1/ST Racing, the tracks’ Canadian owner, along with horsemen and breeders — have perpetually grappled with existential problems, only to wind up right back where they started.

With Pimlico Race Course in Baltimore and Laurel Park losing money every year, redevelopment plans stuck in the mud, and track owners and horsemen at odds over a new operating agreement, Maryland racing faces a reckoning.

On Dec. 1, a new power, the Maryland Thoroughbred Racetrack Operating Authority, will issue its recommendations for the future of the tracks and the industry. Some longtime racing leaders have pinned their hopes to the authority as a light in the wilderness. All sides agree the circumstances demand substantial change.

“I think it’s fair to say the economic model is not working,” said Craig Fravel, CEO of 1/ST Racing.

“Make no mistake, Maryland racing is going to look different going forward,” said Alan Foreman, longtime general counsel for the state’s horsemen and a member of the racetrack operating authority. “I’m not suggesting that’s a negative, because the status quo is not going to work under any circumstances. There has to be change, or we’re not going to survive.”

Some observers not directly involved in negotiations worry that the industry will not work its way out of this quagmire. “I was always a cheerleader,” said former Maryland Racing Commission Chairman Bruce Quade, who helped negotiate the current operating agreement. “But now, I’m the opposite. Horse racing in general is in trouble, but Maryland is at an inflection point where we have to rebuild.”

Just in the past half decade, 1/ST Racing sought to move the prized Preakness Stakes from Baltimore, only to change course with a plan to renovate both Pimlico and Laurel Park. A quick tour of either track reveals that those years-old plans remain just that — plans — and that, if recent history is any indication, it could stay that way for at least an additional year.

What’s more, 1/ST has proposed drastically cutting the number of days the sport operates in the state, which would create a seismic shift.

Horsemen, in turn, have questioned the company’s commitment to operating in Maryland beyond its interest in staging lavish parties and star-studded concerts — Bruno Mars headlined in 2023 — around the Preakness. The second jewel of the Triple Crown series traditionally wiped away the industry’s annual losses, but it has run $4.8 million in the red over the past two years, 1/ST said.

Fravel defended the company’s record, saying, “We’ve done a lot of good things for Maryland racing and invested large amounts of money and sustained losses that I think a lot of other operators would not have done.” He said 1/ST “unequivocally” wants to remain in the state long-term.

Maryland traditionally hosts about 175 days of live racing among its tracks. 1/ST, formerly known as The Stronach Group, recently pitched a plan to slice that to 80 or 90. Despite state subsidies from slot machine revenue, the business is not profitable, annually losing $10 million “with no prospect of turning around,” Fravel said in a September presentation to the authority.

To get out of the red, 1/ST has proposed receiving more of those subsidies (instead of the horsemen) — a change that would have to be approved by the legislature — and coordinating the calendar so that an abbreviated racing schedule takes place in Maryland for a few months, then moves to other mid-Atlantic states such as Virginia.

The horsemen are dubious of 1/ST’s plan to roughly halve the number of racing days in Maryland, which would potentially jeopardize the sport’s long-term foothold in the state.

“Their view of the industry is to dramatically cut racing days ... and shift a sizable portion of gaming revenues to their bottom line because they’re bleeding red ink,” Foreman said. “There isn’t a great future for Maryland racing and breeding if that’s the model we’re going to seek.”

The disconnect is clear and the path uncertain. But many say the new authority, created by the legislature, can be a beacon. Stakeholders note there’s more state money available and more focus on developing a comprehensive vision than during past crises.

The General Assembly approved $375 million in bonds to renovate Laurel Park and Pimlico in 2020, a plan that is no longer feasible. But those funds are still awaiting deployment by the industry, which also now has, in the authority, a central body to guide it.

“While we have a lot of the same problems that existed back in 2010, now we at least have some tools to solve them,” the authority’s chair, Greg Cross, said. “So, I would say we’re in a much more hopeful position.”

Longtime Democratic Del. Sandy Rosenberg, who represents constituents around Pimlico, expressed optimism in the authority’s ability to provide a report that would be “acceptable” to the racing industry and government leaders.

Foreman said the mere existence of the authority is a sign Annapolis power brokers care about preserving Maryland racing. He noted New York is the only other racing state where comparable planning is underway.

“Do they like what they’re seeing? No,” he said of Maryland legislators. “Are they frustrated by the stalled redevelopment plan? Yes. The challenge for us now is we have to demonstrate a commitment to move forward and that we’re actually going to execute on a plan.”

The redevelopment of Pimlico — a project Maryland Stadium Authority officials have called the most complicated in the agency’s history — is a priority for horse racing. The refurbished Baltimore landmark would replace Laurel Park as the state’s racing center with an accompanying training center to be built at an undetermined location. Laurel Park would, eventually, cease to exist as a racetrack.

Cross said the authority has studied more than a dozen potential training sites. It will present at least two options next month in its report.

Another change that could arise from the authority’s report is a revamped model for running daily racing, with an outside operator or nonprofit potentially taking over for 1/ST.

“We’re open to the conversation about day-to-day racing and how it’s conducted and where it’s conducted,” he said. “How to make the thin economic resources go as far as they can.”

Conflict between the track operator and horsemen is nothing new. Foreman said relations are less bitter now than before the sides reached a 10-year operating agreement in 2012 that created an era of relative peace. Before that, The Stronach Group’s then-chairman, Frank Stronach, had proposed cutting racing days sharply and horsemen were frustrated he had failed to obtain a license to operate slot machines at the tracks.

“We were just bewildered as to what the future was going to look like,” Foreman recalled.

The industry is now operating under an extension of the agreement that arose from that uneasy period. It expires Jan. 1, leaving the possibility racing could be halted then if there’s no new operating plan. Foreman predicted another extension as horsemen and 1/ST Racing work through the authority’s recommendations.

“You’re going to need some arrangement with them [1/ST], because we’re going to need to continue racing at Laurel while Pimlico is under construction,” he said. “We have no other place for the horses to go, and if you close down, you may not get it back. It’s quite a juggling act.”

Fravel expressed optimism that a deal can be reached by the end of the year, though the sides remain far apart on an optimal number of racing days.

“We put together what we thought was a very rational calendar,” he said. “The horsemen obviously have a different perspective on that. I don’t have a crystal ball on the actual number [of days] that would be run. … I’m definitely sympathetic to what the horsemen need to sustain their operations. They want to be profitable, just like we do.”

Foreman said 130 to 140 racing days is the “magic number,” especially if the calendar is determined by a nonprofit, created to look out for the best interests of Maryland racing, rather than by 1/ST.

The details remain elusive, but stakeholders agreed significant change is coming for Maryland racing, perhaps quickly.

“We’re at a moment in time where what happens over the next six to 12 months,” said Bill Cole, who has represented the city of Baltimore in Pimlico negotiations, “is going to determine the future of Maryland racing.”

When the General Assembly passed a bill in 2020 to renovate Laurel Park and Pimlico, it appeared to pave the way for a rejuvenation of Baltimore’s Park Heights neighborhood, including the expansion of LifeBridge Health’s medical campus, and ostensibly ushered in a new era of racing.

But the plan, slowed by logistical impediments and a changing vision, hobbled to the starting gate before stalling. LifeBridge Health built a violence intervention facility on land near Pimlico in 2022, but delayed other planned construction at the request of the state and city, the health care company said in a statement.

And while the future of Maryland racing remains clouded, the industry beats on.

Rudy Sanchez-Salomon, a trainer, arrives at his Laurel Park barn most days by 4 a.m. On a recent, peaceful morning, he worked out 36 of the 40 horses he has stalled at there, then supervised grooms and hot-walkers as they poured ice baths and bandaged fragile, powerful legs.

A Mexican immigrant, Sanchez-Salomon came to the United States in the 1990s and worked in landscaping before carving out a career with horses. Now one of Maryland’s top trainers, he often hears “rumors,” as he classifies them, regarding the direction of the sport.

He lives near Laurel Park and is confident he and other horsemen will be able to continue racing in the state. The prospect of fewer racing days worries him. But in an interview at his barn, he remained steadfast that industry leaders would find a way ahead.

“This thing is going to keep going, no matter what,” he said.

Fewer racing days would challenge and even threaten an economic ecosystem that relies on the constant nature of racing. With fewer days, many exercise riders, grooms and trainers would likely have to seek work in other states or outside racing.

The expected consolidation at Pimlico troubles Sanchez-Salomon less. He loves his barn at Laurel Park, which buzzes with activity and is spacious enough to host pigeons and starlings in addition to dozens of horses. But if Pimlico becomes Maryland’s racing hub and another locale hosts training, he would embrace it.

“You gotta move out of your old house to go to a new house,” he said. “It’s gonna be tough in the beginning, but you get used to it.”