Binary Man: Should Maryland Buy The Preakness?
Binary Man has come to our planet to settle disputes, solve problems and make life better. Got an issue for him? Post it below or e-mail him.
In the strange space where horse racing, slots, Maryland politics and the state of the economy come together, this question has forced its way into the limelight: Should the state's taxpayers buy the Preakness Stakes, the legendary race first run at Pimlico Race Course in Baltimore in 1870?
Maryland Gov. Martin O'Malley, who has spent the better part of his time in office arguing that the state desperately needs the surefire torrent of revenue that would come from legalizing slot machines, is now moving toward a different kind of bailout. This time, it's the horse race that for many years was Baltimore's most prominent claim to national attention. "The Preakness Stakes is not only one of Maryland's most treasured traditions, but an economic engine for the state, employing thousands of people and creating millions in economic activity each year," the governor said in defense of his decision to use state power--and potentially state dollars--to keep the race in Maryland.
How did it come to this? Maryland finds itself in the odd position of having developers who want to turn its two major horse racing venues--Laurel Park and Pimlico--into shopping centers. The state has a major shopping center--Arundel Mills--that is being proposed as the site of the slots palace that was originally supposed to be at the race track. And Maryland has a political heavyweight--Baltimore Orioles owner Peter Angelos--who is talking about having the state buy the Preakness to prevent the race from being moved out of state.
Earlier in this soap opera, Angelos bought Rosecroft race track in Prince George's County, apparently with an eye toward reviving it as a slots and horses combo. But that didn't work out, so now Angelos has been meeting with top officials in Annapolis in an effort to save the Preakness. There's even a law that gives Maryland the right to buy the race should there be any effort to move it out of state. But where might the race be moved to? And how realistic is it to expect the bankruptcy courts to let a state government buy a horse race from a company in financial trouble?
Binary Man loves a great horse track, loves the sights and sounds and smells, the characters who make up the racing game. But Binary Man is nothing if not a realist, and one of the problems with the whole slots concept is that it was meant as much to prop up the horse racing industry as to fill the state's budget gap. Artificially supporting a sport that the general public is rejecting overwhelmingly is not Binary Man's idea of good public policy.
But the Preakness is something special--it's one of those great civic events that define a city's image and, at least potentially, bring in significant tourist and other entertainment dollars.
Whatever emotional attachment you might have to the Preakness and its home course, Pimlico, there are some legal and financial matters that must take precedence. For example, PNC Bank, a major creditor in the bankruptcy case of Magna Entertainment--the company that owns Laurel, Pimlico and the Preakness--wants the court to force Magna to sell Pimlico before this May 16th's running of the Preakness. Since the Preakness accounts for most of Pimlico's profits, the track will lose much of its value after the race has been run, the bank argues. That would put a very short timetable on any potential sale of the assets.
Is the state law that would let Maryland buy the storied race even constitutional? Can the state mandate to whom Magna may sell its property?
Binary Man wants Maryland to save the race--after all, even given the sorry state of horse racing these days, the Preakness still drew 120,000 fans last spring (ok, "fans" may be pushing it; many were there just for a glorious day of gaming and boozing. But still, they were there.)
But in these lean times, it's hard to justify the state shelling out big money to buy a horse track that Mr. Market may prefer to see become a shopping complex. There is a natural order to popular tastes, and those tastes have moved away from horse racing pretty dramatically in recent years--so much so that the last two governor's promises of the wonders slots and horses would accomplish together have turned out to be empty words.
For years, Magna has claimed that it was on the verge of rebuilding its two major tracks in Maryland, but it never happened because the revenue stream just wasn't there. Would more people come watch the horses if the tracks were modern and attractive? Not likely--some of the greatest tracks in all the land sit empty or nearly so. Sports tastes change. Binary Man wishes he could still go down to Hialeah in Florida to watch the flamingos and the horses cavorting in their own special ways at that gorgeous spot. But he can't--it's been shuttered since 2001, despite efforts to revive it.
No one wants to see the same fate befall Pimlico (Laurel has far less of an emotional hold on lovers of the sport.) But the state is in no position to be bailing out horse tracks. And if slots turn out to be a bust, the state will have to turn to more honest and fair ways of raising the money it needs. Picking the right politicians is enough of a gamble; allowing the state to dive ever deeper into the business of gambling on longshots makes no sense.
What's your view?
By Marc Fisher |
April 8, 2009; 7:40 AM ET
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