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(Enlarge) The pastures at Country Life Farm along Route 1 near Bel Air used to be full of thoroughbred mares and their babies at this time of year. With breeders taking their business to Pennsylvania and other states with more lucrative subsidies, the farm's owners plan to cut hay from these vacant fields to supply their horse training center in Baltimore County. (Nicole Munchel | Aegis staff)

Maryland’s horse racing and breeding industry, often given up for dead, got a major psychological boost Saturday when a horse based and trained in the state won the Kentucky Derby.

The Derby victory by Animal Kingdom, who is stabled at the Fair Hill Training Center in northern Cecil County, where he’s trained by Fair Hill and longtime Maryland resident H. Graham Motion, was certainly worth some bragging rights for the state’s beleaguered horse breeders and owners.

Favorable publicity, however, is usually as fleeting as cheap speed is on the track. The Maryland horse industry still needs an economic boost.

Harford County horse breeders say they are thankful a relatively full thoroughbred racing schedule will continue in Maryland, thanks to recently passed legislation.

But, they are still concerned about their industry’s long-term prospects for survival, conceding the legislation was but a quick and likely temporary fix.

With the Triple Crown season in full swing and the state’s showcase racing event the Preakness Stakes coming up May 20, the racing and breeding industries, a significant part of Harford County’s economy, remain in financial peril.

New slots subsidy

Approved in the 2011 session of the Maryland General Assembly was legislation to allow slots revenue to temporarily subsidize racetrack operating costs in 2012 and 2013.

The bill, which was requested by Gov. Martin O’Malley, allows millions in casino slots revenue that had been mandated for racetrack improvements to be used instead as operating money by the tracks.

The bill designates up to $6 million for Laurel Park and Pimlico Race Course, the thoroughbred tracks, and up to $1.2 million for Rosecroft Raceway and Ocean Downs racetrack near Ocean City, the two standardbred tracks.

As mandated by the previous law that approved slots gambling in Maryland, racetracks were supposed to get 2.5 percent of the gross gaming revenue from slots to make physical improvements to their plants.

The 7 percent mandated from slots revenue for racing purses will not be altered by the recently passed track relief legislation.

Through April, according to the Maryland Lottery, the two operating slots casinos in Perryville and Worcester County have generated $1.9 million for the racetrack fund and $5.4 million for the purse fund.

Tracks, breeders entwined

Breeders in Harford County need a healthy racing industry to keep their own operations financially viable.

“The tracks are operating at a loss,” Harford County Council President Billy Boniface, who manages his family’s thoroughbred breeding farm in Darlington, said in a recent interview.

Boniface believes the new legislation will help the industry.

Because of money losses, the Maryland Jockey Club, which owns Pimlico and Laurel, has continued to cut back on live race days.

As a condition for the slots funding, the Maryland Jockey Club must maintain at least 146 live race days a year.

“We have to have somewhere to run our product,” Boniface said.

With higher purses in nearby states that have had slots longer than Maryland, and not having table games, Maryland has been struggling to keep its breeding farms, according to Boniface.

“It helps incentivize owners remaining rather than picking up and moving on,” Boniface said of the legislation. “With the way the economy is we don’t have any new people coming and we have to invest in the ones we have.”

Boniface said this money is not designed to be a permanent fix, but rather a temporary boost for the horse racing industry.

“It will help us to improve our product and turn this thing around. If we don’t, then this money goes away,” Boniface said. “I don’t want to be in the slots business; I want to be in horse racing.”

Changing dynamics

Boniface said more mares were bred in Pennsylvania than in Maryland last year, something that used to be unheard of.

In addition, the latest stallion rankings published for the mid-Atlantic region rank two stallions standing in Pennsylvania tops in money won by their offspring this year. Historically, Maryland-based stallions topped those rankings.

“We’re a last thread here,” Boniface said.

Part of the industry’s decline had to do with slots and other casino revenue in nearby states like Pennsylvania, Delaware and West Virginia, according to Boniface.

“That all has everything to do with slots revenue going toward the horse racing industry, without that on the plate we weren’t at the top,” Boniface said.

He explained that Pennsylvania has been infusing purse money, rewards for winning races, with slots revenue.

“It did the trick. They’re giving out a lot more money than we are,” Boniface said. “It’s tough to compete against that.”

Boniface feels the new legislation makes Maryland more competitive and will help breathe life into the horse industry in Maryland.

“Now that the slots are up and running and the revenue is going toward the purse fund and the [Maryland] bred fund, you’re seeing some more excitement,” Boniface said.

Working together

A five-year business plan for racing facilities is a major condition to receiving the temporary funding from additional slots revenue.

The bill requires the racetrack operators, breeders and horsemen to sit down and work on a plan for the future, Northern Harford State Sen. Barry Glassman explained.

“What we said was we’re going to help you stay afloat for the next couple years but we’re also going to require you sit down and formulate a plan,” Glassman said.

Glassman said the horse racing industry has been dysfunctional for more than a decade and this greatly affects Harford County.

“We probably have one of the largest horse breeding areas in the state,” Glassman said of Harford County.

As a representative of Harford County, Glassman said the bill made sense.

“For Harford County it was kind of a no-brainer,” Glassman said. “Quite frankly, the horse breeders are just barely hanging on.”

Glassman said he hopes the requirement to formulate a plan goes a long way toward improving the industry.

“Hopefully they’ll come up with a plan and get their act together,” Glassman said.

Local opposition

Two Harford County delegates voted against the slots subsidy bill.

“These slots aren’t even up and running and these guys have already decided where this money is going to go and where it’s going to be spent,” Del. Rick Impallaria said.

He said the shift in uses for the money was his major concern.

“That was our concern with slots to start with, they say the money is for one thing and then turn around and want to use it for something else,” Impallaria said.

He said designating money for operational costs as opposed to capital improvements as initially laid out is not a good thing.

“A lot of people were relying on the funding going the way it was going,” Impallaria said.

Del. Pat McDonough said giving the racetracks money before they come up with a plan for improvement is a bad idea and one of the reasons he voted against the legislation.

“So you come to me with your hat in your hand and say can you give me some money,” McDonough said of the horse racing industry. “Tell me why you’re failing and how you’re going to fix it.”

McDonough said the money could be better used to fix the state's budget deficit and to bring relief to taxpayers.

“This is just straight out money to subsidize a failed venture,” McDonough said of the track subsidy.

Commitment needed

Josh Pons, whose family’s Country Life Farm near Bel Air has been breeding racehorses since 1933, said reliance on subsidies from slots and other gambling won’t solve his industry’s long-term economic woes, especially if the tracks don’t come under new ownership committed to racing.

“It’s going to help but we shouldn’t have to do it,” he said of the recent legislation.

“They [track owner Maryland Jockey Club] should have put up their $25 million to get into the poker game; it’s terrible,” said Pons, in reference to the failure of the owner of Laurel and Pimlico to put up the required deposit for a slots license in Anne Arundel County last year.

Pons said he doesn’t really trust Penn National Gaming, which has a partnership interest in the two Maryland tracks and owns the slots casino in Perryville.

“I don’t think they are committed to racing; they’re a casino company,” he said.

Pons and his partners own Oratory, one of the top ranked young stallions in the region, but their best stallion, Malibu Moon, had to be relocated to Kentucky to attract top mares. A decade ago, that probably wouldn’t have happened.

Now, the rolling fields of Country Life Farm, which used to see upward of 100 mares and newborn foals frolicking on spring mornings, are eerily vacant. Owners don’t want their mares to give birth in Maryland because they can’t get more money for the youngsters in states like Pennsylvania, which uses slots revenue to subsidize its breeder incentive programs.

Pons and his family bought the Merryland Training Center in Baltimore County when they saw their breeding business was going elsewhere. The center is successful, he said, and in a touch of irony, the pastures at Country Life will be cut for hay this year to supply the stables at Merryland.

Pons said he’d like to be more optimistic, but until the uncertainty with the tracks is straightened out, he’s doubtful about the industry’s prospects.

“There are a lot of awfully good people who deserve better than the chaos in our industry,” he said.

Aegis Managing Editor Allan Vought contributed to this article.

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