Photo above: Sagamore Farms at sunset (Photo by yorgak on Flickr)
By Barry Rascovar
Not far from my home, down a steep patch of Greenspring Avenue on the way to Glyndon, lies a glorious environmental sight — and a stark contrast between the past and present for Maryland’s horse industry.
Descending into the Worthington Valley, a broad, green panorama of horse farms reveals itself. This is prime Maryland horse country.
As the $1.5 million Belmont Stakes approaches, with the best chance in decades to witness racing’s elusive Triple Crown for three-year-old thoroughbreds, it’s appropriate to review the state of Maryland racing.
The vast 530-acre thoroughbred spread known as Sagamore Farm, restored to its earlier glory by UnderArmour founder Kevin Plank, dominates Worthington Valley, highlighted by Sagamore’s white
painted fences and corporate training center mansion atop a distant ridge.
Far to the right lies Hunt Valley and the blueblood horse farms that have hosted the grueling, four-mile Maryland Hunt Cup timber race for 92 of its 118 years.
In the foreground, though, lies beautiful but empty barns on 100 acres of land. Its sad fate underlines the fragility of Maryland’s horse industry, just as Sagamore Farm and the Maryland Hunt Cup illustrate the strength of the industry’s future.
The empty barns used to have a sign on its gates that read “Maryland Stallion Station.” Prominent horse breeders joined together in 2003 to make the Worthington Valley once again famous for its thoroughbred champions.
What the owners didn’t count on was Maryland’s resistance to doing what neighboring states had done to resuscitate their horse industries: legalize slot machines and dedicate a small portion of the proceeds to rebuilding race tracks and dramatically boosting purses — the lifeblood of the industry.
Horse owners quickly recognized there was money to be made in Delaware, West Virginia and Pennsylvania as purses soared at tracks in those states. They took their horses and left Maryland.
Meanwhile, politicians in Annapolis ignored the obvious trend and resisted legalizing slots.
Declining racing industry
As a result, Maryland’s horse industry spiraled deeper and deeper into decline.
At its worst point, the state lost 80% of its stallions, mares and foals because of the poor business climate here.
Finally, the industry’s distress became so obvious Gov. Martin O’Malley asked his Labor, Licensing and Regulation Secretary Tom Perez (now U.S. Secretary of Labor), to study the state of racing in 2007.
His impartial and persuasive report laid out the facts.
Citing a University of Maryland study, he wrote, “The horse racing and breeding industry in Maryland accounts for over 9,000 jobs, and has an economic impact of more than $600 million.”
“A decade ago Maryland led its neighbors in handles and purses — the amount bet on races and the prize money awarded to winners — and the number of horses being bred. These statistics are the lifeblood of the racing industry. But the introduction of slot machines in Delaware and West Virginia has resuscitated and revitalized the previously moribund horse racing and breeding industries in those states. As a result, Maryland’s horse racing and horse breeding industries have been placed at a distinct competitive disadvantage.”
Perez continued, “The economic impact of slots on the horse racing industries in surrounding states is undeniable. Slots have generated thousands of jobs in these areas, and are subsidizing other priorities, such as education and transportation. In fact, Marylanders playing slots in Delaware and West Virginia are subsidizing education and other priorities in these states to the tune of approximately $150 million per year.”
The fate of Maryland Stallion Station confirmed Perez’s findings. It couldn’t compete against breeding farms in neighboring states offering generous racing subsidies.
Who would want to breed valuable race horses in Maryland when the purses, coupled with large bonuses for locally bred thoroughbreds, were growing huge in nearby states, thanks to slots revenue?
The owners of Maryland Stallion Station made a valiant effort, but they couldn’t overcome the state’s lack of favorable business conditions.
They relocated their stud animals in 2008 and went out of business.
Revived by slots
Eventually, with the booming success of Maryland Live! Casino at Arundel Mills, the state’s racing slowly started to rebound, just as Perez suggested.
Sagamore’s fortunes are proof that this formula — tying a percentage of slots revenue to the racing industry — works. Both Sagamore’s breeding and training businesses are on an upward track.
The optimism of horse owners, trainers and breeders on Preakness Day illustrated the turnaround that is taking place.
Most encouraging has been the breeding uptick at Sagamore Farm in Baltimore County, Bonita Farm and Country Life Farm in Harford County, the Rooney family’s Shamrock Farms in Carroll County and the impressive Northview Stallion Station in Cecil County.
But danger still lurks in Annapolis.
Politicians already are talking about reneging on their agreement with the racing industry and stripping away some of the slots money reviving the industry. They want the money for other, more politically appealing programs.
What these politicians ignore is the giant environmental benefits flowing from a strong racing industry. They should review Tom Perez’s findings:
“Horse farms occupy over 685,000 acres of land, roughly 10 percent of Maryland’s open space. Horse racing and horse breeding go hand in hand. Preserving a viable horse racing industry helps maintain horse farms and protect open space. . . .
“The importance of reviving horse racing and breeding in Maryland extends beyond merely supporting the industry. Every breeder that can’t sustain his or her business because of a declining industry means one more farm that might succumb to development pressures. Growth in Maryland will continue, and without a vibrant horse breeding sector those open spaces could become prime real estate for developers.”
Perez noted that Maryland’s agricultural land is disappearing. Between 1970 and 2005, the state lost one million acres of farms to development — one-third of the state’s farmland.
“Retaining Maryland’s agricultural land is critical to the environment, and particularly the health of the Chesapeake Bay,” he wrote.
“The key to keeping farmers on their land is ensuring their operations remain economically viable. . . . As Maryland’s population grows and development pressures force farmers out, protecting the state’s horse industry becomes more and more critical to sustaining the legacy of rural Maryland and maintaining a healthy environment.”
Perez concluded that the racing industry “is an important economic engine for Maryland, and provides an important buffer against sprawl development.”
The governor’s office reports that Maryland’s horse industry today is valued at $5.6 billion. The horses are worth $714 million. The farms employ 28,000 people.
It also notes this surprising fact: Maryland contains twice as many horses per square mile as Virginia, Texas, California or Kentucky.
After Baltimore’s Horseshoe Casino opens late this summer, more slots dollars will flow into thoroughbred and standardbred racing purses. When the MGM Grand Casino opens in about two years at National Harbor, still more revenue will come racing’s way.
What lies ahead could turn into a grand revival for horse racing in Maryland.
Of course, that will depend on the ability of track owners to use slots revenue for major modernization upgrades that appeal to 21st century sports lovers.
The industry also must find a way to underwrite year-round racing. (There will be no Maryland racing at all this summer.)
Maryland’s political leaders have a responsibility to foster the growth of horse farms and high-quality racing in places like the Worthington Valley.
It’s great for the environment, strengthens an important agricultural business and is a sport worth saving.
A prosperous racing industry is a decided plus for citizens of the Free State, one that politicians need to encourage, not discourage, in Annapolis.
Barry Rascovar’s political blog can be found at www.politicalmaryland.com