Churchill Downs makes late bid to buy Pimlico as state mulls takeover of racing industry

As Maryland lawmakers consider a plan for the state to take ownership of the historic Pimlico Race Course in Baltimore, another potential owner has entered the discussion: Churchill Downs.

Churchill Downs Inc., the publicly traded parent company of the Louisville track that hosts the Kentucky Derby, has made an “overture” to buy Pimlico, home of the Preakness Stakes, according to two sources in the state capital familiar with the negotiations.

One of the sources said Churchill has been lobbying to derail a bill in the state legislature that’s necessary for the state ownership deal to go through.

Representatives of Churchill Downs did not respond to multiple voicemail and email messages seeking comment on the company’s interest in Pimlico. Such a deal would give Churchill Downs Inc. control of the first two legs of horse racing’s Triple Crown.

It’s not clear how serious Churchill Downs’ interest is or whether the company made a formal or informal offer to Pimlico or the state about buying the track. Some in Annapolis have privately expressed skepticism about Churchill’s motives, given that it has many more casinos than racetracks among its properties.

Craig Fravel, executive vice chairman of Stronach’s 1/ST Racing and Gaming, said in a statement Wednesday that there’s no pending offer from Churchill Downs to his company, which is “not in any negotiation with them.”

“We remain committed to the contemplated transactions as negotiated,” the statement said.

Even so, Churchill’s involvement could complicate efforts to execute the state takeover plan for Pimlico, which involves legislation that’s pending in the final days of the Maryland General Assembly session. Several lawmakers have expressed reservations about the state taking over the track and running thoroughbred racing, along with some elements of the plan to pay for hundreds of millions of dollars in renovations.

The bill passed the House of Delegates on Monday night and is facing unknown odds in the Senate.

“It’s going to be some tough conversations here in the next few days to figure out if there is a clear path forward,” Senate President Bill Ferguson told reporters Tuesday.

The ambitious plan has been sold as a way to keep thoroughbred horse racing viable and the Pimlico track operating after years of financial and operational uncertainty.

Under the deal, the Stronach Group would transfer the Pimlico track to the state, which would spend hundreds of millions to renovate it and then create a nonprofit entity to run year-round races.

Stronach’s Laurel Park would temporarily host racing, including the Preakness Stakes for at least one year, during construction at Pimlico. After that, racing would cease at Laurel and the future of the property would be up to Stronach.

The state would also open a training center at a to-be-determined location.

The work to renovate Pimlico and build the training center would be paid for with up to $400 million in state-issued bonds. The bonds would be paid back by redirecting existing state subsidies for the racing industry, including money from casinos and the lottery.

No general taxpayer funds would be used for the plan, but that still isn’t sitting well with some lawmakers. Some questioned whether taxpayers would be left holding the bag if the new state-run entity can’t turn a profit or at least break even.

Others opposed one element of the funding plan that involves taking a subsidy for Stronach-owned Rosecroft Raceway, a harness racing track in Prince George’s County, and using it for the bond repayments instead.

Supporters of the harness racing industry lobbied against that provision. Churchill Downs Inc. owns a controlling stake in Maryland’s other standardbred track, Ocean Downs.

“The way we are financing something that is good for one class of horsemen is potentially taking money away from another class of horsemen,” Del. Jason Buckel, the Western Maryland Republican minority leader, said during House debate Monday. He called the standardbred industry the “redheaded stepchild of the horse racing world” that doesn’t get sufficient support or attention.

Supporters of the bill reminded lawmakers that they created the Maryland Thoroughbred Racetrack Operating Authority last year that came up with the plan for Pimlico and the thoroughbred industry. And it builds on a plan crafted in 2020 that never was executed.

“This is years of work that this legislature put in,” said Del. Dalya Attar, a Democrat whose Baltimore district includes Pimlico.

Despite opposition, the bill passed the House 104-34.

The bill is sitting in the Maryland Senate, where it needs to overcome a procedural hurdle before getting a full airing before senators. The bill was the subject of spirited debate in a closed-door meeting of Democratic senators on Tuesday, Ferguson said.

Ferguson said senators need to determine if the state takeover plan and bill are “in the best interest of the industry and the communities surrounding the tracks and the communities that would be losing the tracks.”

Ferguson would not offer a timeline for the Senate’s consideration of the bill. The end of the General Assembly’s annual legislative session is approaching at midnight Monday.

“We’ll do the best we can and try to hammer it out. ... We will navigate a way forward. We’ve got seven days to do so, and we’ll see if we get there,” Ferguson said Tuesday.

Baltimore Banner reporter Brenda Wintrode contributed to this story.

Pamela Wood

pamela.wood@thebaltimorebanner.com

Pamela Wood covers Maryland politics and government. She previously reported for The Baltimore Sun, The Capital and other Maryland newspapers. A graduate of the University of Maryland, College Park, she lives in northern Anne Arundel County.

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