Maryland Horse Betting, Preakness Stakes Future Clearer After Bill Passage

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On Monday, the Maryland legislature passed a horse betting bill that presented a clearer path forward for the Preakness Stakes, and the statewide racing industry, following years of uncertainty.

House Bill 1524 cleared both chambers of the General Assembly in the final hours before it adjourned Monday night. The bill calls for the state to take ownership of Pimlico Race Course in Baltimore and create a non-profit to operate the racing industry. Gov. Wes Moore, who advocated for the legislation, is expected to sign it.

Maryland horse betting will consolidate to a single track at Pimlico, home of the second leg of horse racing’s Triple Crown. 1/ST Racing, under the Stronach Group, currently owns Pimlico and the Preakness Stakes.

Horse betting facility renovations

The bill also calls for $400 million in bonds to renovate Pimlico and build a year-round horse training center.

Alan Foreman, a Maryland Thoroughbred Racetrack Operating Authority (MTROA) board member, is hopeful a redesigned facility at Pimilco will generate more foot traffic and increase in-person betting handle.

“Horse racing facilities today are outdated and do not attract customers,” Foreman said. “No one wants to sit in a seat the whole time anymore. A new, iconic facility at Pimlico should bring in a younger generation of fans and allow them to enjoy the entire space.”

Last year, the General Assembly created the MTROA to explore options for racing’s future in Maryland. It will now work on setting up the non-profit business.

Future of the Preakness Stakes

1/ST will still maintain ownership of Maryland’s other thoroughbred race track, Laurel Park. During renovations, the Preakness will run there for at least a year, likely 2026.

1/ST is expected to sell the Laurel property once renovations are done and racing returns to Pimlico year-round.

The non-profit will pay 1/ST a $3 million licensing fee annually to host the Preakness, Black-eyed Susan Stakes, and their respective festivals. 1/ST will also get a small percentage of total horse betting handle on those two days of racing.

Horse racing passed on expanded betting opportunities

When Maryland legalized slot machines in 2012, the Stronach Group failed to make a bid to bring additional gaming to Laurel Park. Without the added revenue stream, its tracks faced many challenges in the following years.

More recently, the Stronach Group did not apply for a retail sports betting license at its thoroughbred tracks. Foreman, who also serves as general counsel for the Maryland Thoroughbred Horsemen’s Association, told LSR the Stronach Group did not want to pay for a retail license because most sports betting revenue is generated online.

Legislation removes retail licensing fee

The bill passed Monday eliminates an in-person sportsbook’s $1 million licensing fee. Adding a sportsbook to the renovated facility is more palatable, according to Foreman, without the fee.

In-person Maryland sportsbooks generated $16.4 million in 2023 revenue from $189.7 million in wagers. At the same time, MD sports betting apps cleared $497.7 million from $4.43 billion in bets last year.

When online casino conversations begin again in Maryland, Foreman hopes the racing industry can also be part of those discussions.

Will changes affect horse betting handle?

Horse betting handle on Maryland racing reached $542 million in 2022according to an MTROA report submitted to the legislature. On-track betting accounted for 2% of that total.

Advanced deposit wagering platforms, the online apps facilitating horse betting like TwinSpires, get a larger share of betting revenue than the physical track does from in-person betting.

“There is not a lot of incentive to generate on-track business,” Foreman said. “That is something we will be looking at closely.”

On-track attendance declines

Day-to-day attendance at racetracks has dropped significantly in the past few decades.

It is a factor other tracks have considered, given the current state of horse betting nationwide. Foreman said the Pimlico redesign figures to take a similar strategy.

In its report to the legislature, the MTROA noted dwindling attendance and blamed the Covid pandemic for accelerating the declines. Analysts have not made any projection for future on-track handle or attendance in Maryland.