Preakness owners have garage sale in Ohio, Oregon
Magna Entertainment, the Canadian company that owns Maryland's two thoroughbred racetracks and the Preakness, just announced some business moves that might include a message for Maryland lawmakers.
Magna Entertainment announced yesterday that it is selling a racetrack near Cleveland (Thistledown) and its interests in another track (Portland Meadows) near Portland, Ore.
More to the point is why Magna is selling. In Ohio, Magna "pursued alternative gaming initiatives ... but has been unsuccessful to date." In plain English, that means Magna wanted slot machines approved, but Ohioans voted down a slots referendum in November. Magna, in its own announcement, said that Thistledown incurred a pre-tax loss in 2006 of $4.5 million but conceded that $3.1 million of that was in costs related to the failed referendum.
In Oregon, Magna said that last year it got a ruling from that state's racing commission to install "Instant Racing" machines at Portand Meadows but that this past spring, the ruling was revoked at the request of Oregon's attorney general. Magna Entertainment characterized itself as "very disappointed."
The message is clear. Put bluntly, Magna Entertainment chairman Frank Stronach -- the guy who really runs the show -- is getting impatient with jurisdictions who don't play ball.
Which brings us to Maryland, where the state legislature has been mulling the issue of slot machines for five years. Magna Entertainment has been hurting and one strategy it has been pursuing is to sell assets. Magna Entertainment's financial fortunes are intertwined with other Stronach publicly held companies. Shareholders are antsy. I've listened to some of those quarterly investor conference calls and some folks with substantial money invested in Stronach's companies think he has been entirely TOO GENEROUS regarding Maryland racing interests.
So it remains to be seen whether the Ohio and Oregon moves give Magna Entertainment some cash and breathing room to continue operating in Maryland or whether they're simply a precursor to what's in store here if slots continue to stall.
Comments
How much money does Horse Racing actually bring to the State of Maryland in real revenue? Off-set that by the amount of money that the state pays to make better living quarters for race track workers and other expenses that the race track should be making. Now, throw in the infrastructure cost of police, fire and medical services and other services.
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Captain,
Thanks for writing. This debate about whether horse racing is even worth saving just seems to go in circles. On the pro-racing side is the argument that it saves open space, provides agricultural jobs on horse and feed farms and preserves a culture and way of life that we might all be regretful about if it goes away. Plus, the Preakness is a source of much-needed pride in Baltimore. On the against side are arguments that open space can be preserved through legislation and regulation and that the free marketplace should decide whether racing survives as an ongoing enterprise. And, of course, there are the merits and downsides to allowing slots into the equation. This much I'm fairly sure about. If Maryland does nothing, we won't be talking about it any more because racing and the Preakness probably will be gone.
-- Bill O.
Posted by: Captain Jack | September 6, 2007 12:26 PM