It's Not Just Racing That's Suffering

Interesting figures from Poker News Daily on the decline in revenue for Atlantic City casinos in 2009. Overall casino "gross win" (what bettors pay, less what the casinos return to the bettors) was down 13.2% from 2008, coming in at $3.9 billion. The drop was spread pretty much equally between slot machines (down 13.1%) and table games (down 13.5%). The slots, by the way, account for roughly two-thirds of Atlantic City casino revenues.

The official explanation, from Casino Control Commission Chair Linda Kassekert, was pretty much what one would expect. Kassekert blamed the weak national economy, growing competition from casinos in neighboring states, and the partial ban on smoking in New Jersey casinos.As for the last of those, all I can say is that it's nice to be able to breathe in a poker room.

Compare to the Atlantic City figures, the recently released numbers for thoroughbred betting handle nationally and for the New York Racing Association (NYRA) don't look quite so bad. Nationally, total handle declined by 9.88% in 2009, as compared to the previous year, while in New York, NYRA's all-sources handle dropped by 10.24% That's not great news, but it somewhat belies the argument that racing is losing handle to other forms of gambling. That may have been the case in earlier years, as new casinos opened across the country and siphoned off players, but now that there are casinos everywhere (except, of course, at Aqueduct, where inept New York politicians continue to stall), it's interesting to see that the trend in casinos' revenues is no better than, and in 2009 at least, even worse than that of race track handle.

NYRA, which accounts for about 18% of total national handle, through its meets at Aqueduct, Belmont and Saratoga, saw betting decline from just under $2.5 billion on 249 racing days in 2008 to $2.2 billion on 250 racing days in 2009. Among the specifics cited by NYRA for the decline were the lack of a Triple Crown possibility for the Belmont Stakes (but all-sources handle on Belmont day was down only 10.2%, the same decline as for the year as a whole); bad weather on Travers Day, when handle declined by 18%; and the rainout of 144 scheduled turf races. As to the last of those reasons, I don't know what the average annual number of races taken off the turf might be, but 144 does seem high. And turf races tend to draw big fields, which always leads to better handle.

Industry wide handle was $12.3 billion last year, down from $13.7 billion in 2008. If we assume that the average takeout rate was 20% (close enough, and it makes the calculations easy), then the total amount flowing to tracks, horsemen, and, increasingly, OTB and ADW operators, was about $2.5 billion, or roughly what Atlantic City brings in just from its slot machines. Purses, interestingly, declined by only 5.6% nationally, though that decline is continuing into 2009, as track operators try to make up for the missing revenue.

I find the numbers to be good news in some ways. If racing's revenues are declining at the same rate, or less, than those of other forms of gambling, just think how much better we could be with some imaginative management, better marketing, and better pricing (takeout). A little imagination might go a long way.

A Wish List for Maryland Racing

Now that Frank Stronach has made a deal with Magna Entertainment's unsecured creditors, it's almost possible to start dreaming of a post-Stronach world, apart from Gulfstream and Santa Anita. While the Magna bankruptcy settlement is not quite a done deal yet -- the minority shareholders in Frank's captive company, MI Developments, not to mention the bankruptcy judge in Delaware, may yet have something to say about it -- and while I wouldn't put it past Frank to come up with a last-minute bid of his own to hang onto Laurel and Pimlico, there is a dim flashlight beam barely visible at the end of a very long tunnel.

So, in the spirit of some other visionary bloggers, let's dream a little about what could be done if somebody who actually cares about racing (i.e., Jeff Seder's Blow Horn Equity) somehow manages to win the auction, set for January 21st, for the Maryland Jockey Club properties.

(As far as I can tell, from the very limited public information available, none of the other bids would place actual real live horse racing at the center of their enterprise, and most of them would involve converting as much as possible of the MJC into real estate developments, while possibly running the Preakness in some football stadium to satisfy the State of Maryland.)

Let's start with the racing schedule itself. Last year, Pimlico ran only 20 days, on a four-day-a-week schedule in April and May. That's not much use for a major capital facility, even one as rundown as Pimlico. Laurel, in contrast, runs a four-day racing week straight through from September until mid-April. That's worse than the six months straight at Aqueduct that New York horseplayers have learned to loathe. Even with the summer break, when the horses head to Colonial Downs and Delaware before the bullring meet at Timonium, that's too much racing for the state.

Racing needs to shrink. We need fewer horses, fewer tracks, and fewer races. And we need to make the races that we do put on attractive to fans and bettors (two groups that overlap, but are not identical). Here's a possibility: break up the calendar with a fall meet at Pimlico, like Churchill's star-studded fall meet, and the perhaps take a break altogether in December and January. Less live racing, but make sure there was a great, state-of-the-art simulcast facility at each track, so the die-hard bettors could keep coming all year.

Speaking of simulcast facilities, Maryland law would allow the MJC to open additional OTB outlets around the state, subject to local zoning and regulatory approval. Right now there are only three OTBs in the entire state. OTBs owned by the race track, and integrated into its tote system, are a proven success in other locales, so why not build on that in Maryland?

And keep the four-day racing week, but put in some lights and run those Thursday and Friday programs at night, with lots of music, bars, and things for people to do before, after and in between the races. In other words, make the tracks places that people actually want to go to. There are a lot of places around the world where racing has increased its fan base in the past couple of decades. Take a trip to Australia, Hong Kong and Japan and see what they're doing there. A lot of it might translate well into the US scene; the Aussies even speak a distant relative of English, and they've managed to attract a distinctly younger and more female crowd than one sees at any US track. They must be doing something right, and it's only a 12-hour plane ride, so go take a look.

Obviously, the physical plants at Pimlico, especially, and at Laurel need a lot of work. Priority number one is to make the front side attractive, so that people will be happy going there. But not far behind is putting some work into the backstretch. Make sure the barns don't leak, provide some decent housing and facilities for backstretch workers. Get together with local health care agencies to provide decent medical care for backstretch workers. Provide social services onsite and maybe even convince the University of Maryland-Baltimore law school to run a free legal clinic once a week. Work with the state and the city of Baltimore to get money into the neighborhood around Pimlico, and put as many neighborhood residents as possible to work at the track. Football and baseball stadiums get tons of public money, or at least public guarantees of their bond issues, so why shouldn't racing, which has a much much greater economic multiplier effect?

And once we get that improved physical plant, let's make sure it stays new and welcoming to customers. Have lots of customer-service reps who actually want to help; have supervisors checking up on what customers are saying (Doug Donn used to walk around Gulfstream with a clipboard, taking notes, something I haven't seen much of under Stronach's management) say thank you to customers when they leave; make the reserved-seat ticket operation fan-friendly and pro-active (I get calls all the time from theater groups, ballet companies and the symphony -- why not from the race track?). We're in a retail business. That means our success depends on attracting and keeping customers. Has anyone at a major race track thought of that recently?

Once we've got decent facilities, and are treating our customers well, how do we increase handle, capture enough of that handle to support the track and the horsemen, and pay back our investors? There are at least four factors in maximizing revenue from racing: field size, takeout, simulcast arrangements, and OTB/phone betting revenue. Let's look at each of them.

Lots of studies, including some excellent ones by Jeff Seder, show that field size is by far the most important factor affecting handle. A Grade 1 stakes (except for the Triple Crown) with a five-horse field will always pull in less money than a 12-horse mid-level claimer. So how do you get full fields? That's what a good racing secretary does; know your horses, work the horsemen, card races that typically fill. PJ Campo in New York has done a pretty good job in this regard, in a tough situation. He's introduced a lot of allowance/optional claiming races for the better horses, and a lot of conditioned claimers for the not-so-good. True, he often has 25 races on the list, including those in the condition book and a host of extras on the overnight, and it's hard for trainers to know if the race they're pointing at will actually go, but they are running more horses per race in New York now than they did a few years ago.

Another idea is to create additional big days for Maryland racing. Right now, there's Preakness weekend and, to a far lesser extent, the Maryland Million in the fall. What about theme days, of the kind that have worked well in Florida, where Calder's Summit of Speed and Stronach's(!) Sunshine Millions have done well. Why not get together with the other mid-Atlantic tracks and have a real mid-Atlantic championship series, with qualifying races at all tracks and the final championship day rotating among, say, Philadelphia, Monmouth, Delaware and the (new) Pimlico fall meet?

The Maryland tracks are in the middle of historic steeplechase country. Why don't we have more jump races at the tracks. They're great spectacle, even if you might not get quite as much betting handle, at least until the bettors get used to them.

In much of the world, it's common to have 14, 16 or even 20 horses per race, especially on the spacious turf courses that are common overseas. That makes for terrific per-race handle. At Laurel and Pimlico, it would probably take some major rebuilding of the track to accommodate bigger fields, but it's worth thinking about. There's room at Pimlico to extend a turf course into parking lots that are used once a year. Let's at least do a feasibility study.

What about takeout? The evidence is, to say the least, inconclusive. Laurel has experimented with a lower (14%) takeout on its Pick 4 bet, but no North American tracks have tried a serious experiment with the 10-12% takeout that horseplayers' groups recommend. Why not give it a fair shot? As HANA has often pointed out, lowering takeout keeps bettors in the game longer, makes them feel better, and even allows some good handicappers to make a little money. And if you do lower the takeout, promote it like crazy. Make sure everyone in the racing world knows that Laurel is the cheapest place to bet in all of North America.

One reason that tracks, and horsemen, have been hurt by simulcasting is that they've essentially been giving away the rights to their product -- the races -- for almost nothing. While simulcast fees have crept up a bit in the past few years, they're generally still far from the model espoused by horsemen's organizations, under which one-third of the takeout would go to the track sending the signal, one-third to that track's purse account, and one-third would be left for the simulcast outlet.

There's no quick and easy solution to the simulcast mess. And the increasing monopoly power of Churchill Downs Inc.'s TrackNet operation, especially if its merger with YouBet goes through (it's being opposed by a number of unhappy YouBet shareholders), the combined operation will sit like a colossus over US simulcasting operations, with Churchill on both sides of the negotiating table, as track owner and, more relevant for its bottom line, ADW bet-taker. The legal obstacles may be immense, but a more sensible solution would be to take the existing mid-Atlantic coalition, that negotiates with simulcast outlets, and turn it into an ADW operation of its own. Failing that, the post-bankruptcy MJC could form its own integrated betting operation, with the tracks, its wholly owned OTBs, and its own phone and internet betting operation, along the lines of, say, NYRA Rewards in New York.

An integrated betting operation would mean that the track, and the horsemen, would get the same cut from OTB, phone and internet betting in Maryland that they do from dollars actually wagered at the track. Not a panacea, but a start.

Any and all of these changes will be more likely if the new track management in Maryland acts like a good citizen and gets involved, not just with the stake-holders in the industry, but with the state, with Baltimore, with Anne Arundel County. Get out and be visible, go to the charity events, volunteer on some public task forces. I know that Jeff Seder plans to put together some visionary programs for the poor, mostly African-American area that surrounds Pimlico. That sort of community involvement should be, but probably isn't, a condition of taking over the MJC.

And don't forget to take care of the people who put on the show. Have someone in track management who's actually out there in the mornings, talking with trainers, finding out what's bothering them, and who sits down with the horsemen's and breeders' organizations regularly. Don't institute new rules without consulting the horsemen first -- NYRA's arrogance really shows itself on this issue -- even if you have to decide that maybe the new rule has to go ahead over their opposition. Negotiate a fair contract with the horsemen, one that provides lots of upside potential for everyone, and that encourages cooperation more than it threatens punishment.

And, in the wake of Stronach's "management" style, don't forget the basics of running the enterprise. Make sure people know what they're supposed to do, and see that they do it. Set measurable objectives, and keep track of whether they're met. There's been so much bad management in American racing that even just getting the basics right would be a huge improvement.

At least half of these ideas probably will turn out to be unworkable or unsuccessful. But racing has been mired in do-nothingism so long that the imprtant thing now is to try. Some of the ideas WILL work, and when they do, Maryland Racing will be a lot more fun, and maybe even profitable.

Good luck, Jeff.

Surprise: Good Guys Are Maryland Stalking Horse

I've learned on good authority that Blow Horn Equity LLC has emerged as the "stalking horse" bidder for the Maryland Jockey Club properties (Laurel, Pimlico and the Bowie training center) that will be sold at auction in bankruptcy court on January 21st. Frankly, that's the best possible news for Maryland racing, though it may not be enough to overcome the obstacles to success that Maryland politicians, Frank Stronach and the De Francis family have created through their collective mismanagement.

A "stalking horse" bid in this sort of auction is one that the seller -- in the case Magna Entertainment -- is committed to accepting, unless someone else shows up with a better offer at the time of the auction. The fact that Magna has accepted the Blow Horn bid at least averts the threat that Stronach himself would cobble together a bid at the last minute to try to hold on to Laurel and Pimlico.

As I reported earlier, Blow Horn, headed by Jeff Seder of EQB, Inc., is the only one of six reported bidders for the MJC properties that is likely to have the welfare of the Maryland horse racing and breeding industries as its primary concern. The other bidders are either interested in slot machines, or in converting the tracks into real estate developments. It'd be nice to have folks running the tracks whose primary interest is in racing.

Of course, the ongoing saga of the Anne Arundel county slot machine license still hangs over the MJC deal. As of now, devloper David Cordish has the license, and has zoning approval from the county legislature to go ahead with a slots palace at his Arundel Mills mall, up the road from Laurel. As has been widely reported, there's a powerful petition drive underway to have that zoning approval revoked, and a movement as well to go back to the beginning in the licensing process, so the new owner of Laurel, whoever that turns out to be, could make the sensible bid, supported by a cash deposit, that Stronach refused to make when the license was first put up for bids.

David Cordish could still come up with a bid that offers more cash than the "stalking horse" offer, since he might calculate that the value of Laurel as real estate -- rather than a race track -- and the profits he could make from his slots license, if it's not revoked, are worth more than the value of a pure race track play. But the Blow Horn team has been doing its homework, and certainly is prepared to put more into Maryland racing than any of the other bidders. Let's hope they get the chance.

Pity the Poor Trainer

The New York Racing Association (NYRA) cancelled racing today, because of very cold temperatures and high winds. No disagreement with that decision; I was at the barn area at Belmont this morning, and it was way too cold to be out in the open on a horse. Some trainers did send their horses to the training track, much to the discomfort of the exercise riders, but many chose just to jog them in the shedrow, away from the wind. Even that wasn't exactly a day at the beach.

But what's incomprehensible about the decision is that it was only announced after 7 am, AFTER trainers had to send their horses for the early scheduled races over from Belmont to Aqueduct in the NYRA van for the horses' mandatory six-hour stay in the detention barn. Every trainer who had horses in the first few races today therefore had to load those horses onto the van, send a groom with them, and then wait around until van, horse and groom returned, after the cancellation was made official.

For many trainers, this is a big deal. Since the detention barn system was instituted a couple of years ago, most trainers have begun charging their owners a fee, somewhere around $100, to cover the added cost of sending someone to be with the horse in the detention facility ("gulag") before the race. But when races end up being cancelled, it's pretty hard for the trainer to bill that "raceday fee" to an owner. The trainer ends up just paying for extra help, or for overtime to cover the work that the groom over at the detention barn can't do back at the trainer's shedrow.

There's no reason NYRA couldn't have announced today's cancellation before the first van left Belmont for Aqueduct, or even last night. It's not as if the weather forecast changed significantly between 5 am, when trainers started getting horses ready, and 7 am, when the decision was announced. Trainers and their workers get up early and are at the barn by 5:00 or 5:30 am; it's only simple courtesy and respect for the folks who put on the show for someone at NYRA to do the same.

Today's little fiasco merely highlights the difficulties that the detention barn system poses. It significantly increases costs for owners and trainers, and the mandatory six-hour stay in a strange barn often unnerves horses, resulting in uncharacteristically poor performance. And it's something that can't be worked on by schooling, the way a horse's behavior in the paddock, or at the starting gate, can be.

By now, it's probably impossible to undo the detention barn, even though other methods of preventing illegal drugging -- better testing, more security patrols, cameras in the trainers' own barns, just for example -- would probably be cheaper and less disruptive. NYRA has too much invested in the current system, both in money and in public relations. But if we're going to be stuck with the system, the least NYRA could do would be to help trainers avoid needless trips to the detention barn when there's not going to be any racing.

Angelos Joins Jeff Seder in Maryland Bid

Blow Horn Equity LLC, headed by Jeff Seder, who founded and runs the bloodstock advisory firm EQB, Inc., has just announced that Baltimore Orioles owner Peter Angelos and family will be joining forces with Blow Horn Equity to bid for the Maryland Jockey Club properties now owned by Magna Entertainment. The auction is scheduled for January 8th in federal bankruptcy court.

According to a press release issued this afternoon, the joint Blow Horn Equity - Angelos family bid will go forward despite the ongoing uncertainty over whether the slot machine license earmarked for Anne Arundel County, where Laurel Park is located, will be awarded to developer David Cordish's Arundel Mills shopping center, just up the road from Laurel. The slots license had been intended for Laurel, but Magna generalissimo Frank Stronach decided he could ignore the rules and didn't pony up the required deposit with his application. As a result, the state had no choice but to accept the competing bid from Cordish, a decision that has now been confirmed by the Anne Arundel county government.

While the bidders would certainly like to have the slots decision overturned -- and Angelos is a prominent player in Maryland Democratic circles -- they say the bid is based on racing, not slot machines. Of course, the MJC properties -- Laurel, Pimlico and the Bowie training center -- are worth a lot less without the operator's share of the slots revenue.

Angelos is a Baltimore trial lawyer who got rich representing plaintiffs in major asbestos, tobacco and diet-pill cases. In 1993, he led the investor group that purchased the Baltimore Orioles, and in 1998 he bought the 237-acre Ross Valley Farm in Baltimore County for his thoroughbred breeding and racing operation.

With Angelos' financial muscle, plus the private equity funds pulled together by Jeff Seder in Blow Horn Equity, the group seems in position to make a credible bid at the bankruptcy auction.

Let's hope so; they're the only potential bidders I can see who actually know something about racing.

There They Go Again - NYRA Takes on NY State

New York State Comptroller Tom DiNapoli, the state's chief fiscal officer, has subpoenaed the books and records of the New York Racing Association (NYRA), as first reported in the NY Daily News, and later in the Blood-Horse. Like many others, DiNapoli is presumably curious as to how NYRA spent the money that it received from the state as it came out of bankruptcy in 2008.

As NYRA points out in its press release, hurried onto its website late this afternoon, the Comptroller's apparent surprise that NYRA is now running out of money is a little disingenuous. The original bankruptcy rescue plan anticipated that slot machines -- approved by the NY Legislature back sometime in the Jurassic (well, actually, it was 2001) -- would be up and running at Aqueduct by April of 2009. As we all know, that hasn't happened, and the blame lies largely in Albany, where the hapless "leadership" of the State Senate, together with the incompetence of the Governor's office and the business-as-usual non-action by Assembly Speaker Shelley Silver has meant that we don't even have an operator named for the Aqueduct slots operation, much less shovels in the ground or slot machines actually operating.

So it's not surprising that money is tight at NYRA. Handle is down, as elsewhere in the country, and purses are being cut, beginning with the upcoming 2010 Aqueduct meet. NYRA CEO Charlie Hayward may well be correct when he says that NYRA will run out of money sometime this Spring; the Belmont spring meet always loses money, because of the expensive stakes schedule that makes the meet such an artistic success. Over the years, NYRA's big money-making meets have been Saratoga and, somewhat surprisingly, the Aqueduct winter meet, the latter probably because purses are low, and the meet has an excellent off-track following, at OTBs and across the country at other tracks and ADWs. So it's likely that NYRA will limp through the winter (I certainly hope so; my partnership has two nice NY-breds who'll be running at Aqueduct), and maybe even make a small profit. But, come April, with the Belmont opening in sight and no slots at Aqueduct, another transfusion of dollars seems inevitable.

But if that's so, then why can't Charlie Hayward and Steve Duncker (NYRA Chairman), just open up the books to the state comptroller and show the reality? The state has been a very good friend to NYRA, and it seems, to say the least, a bit ungrateful not to cooperate with a perfectly reasonable request to take a look at the books and see what happened to the state's money since NYRA emerged from bankruptcy.

In its press release -- obviously drafted by a lawyer, not anyone with the slightest political sense -- NYRA makes three points: (1) the money it received from the state through the bankruptcy process wasn't a "bailout," but was really payment for the land underneath the race tracks; (2) NYRA's already regulated by lots of different agencies, so there's no need for the Comptroller's office to poke around in the books, and besides, 11 of the 25 NYRA Trustees are, one way or another, appointed by the government; and (3) there's a NY constitutional prohibition on the Comptroller's auditing of not-for-profit corporations; that job falls to the state's attorney general (Andrew Cuomo) as part of his responsibility for supervising charities.

Let's take these one at a time. First, the land. In the bankruptcy proceedings, NYRA always claimed that it owned the land. The state, through its lawyers, originally took the position that, thanks to prior bailouts, NYRA was already, in effect, a state agency, so that the land already belonged to the state. That issue was never decided by any court. In the end, NYRA agreed to turn over the real estate deeds to the state, and the state agreed to pump lots of money into NYRA. That's all. How each side characterized the transaction doesn't mean that's the legal reality of it. At best, NYRA's claim here is unproven.

Next, what about the claim that NYRA is already regulated enough? The simple answer is, so what? In its press release, NYRA notes that it's subject to oversight and regulation by the NY State Department of Taxation and Finance, by the State Racing and Wagering Board, and by a mostly comatose organization called the State Franchise Oversight Board. You know what, I don't see any reference to, say, the Securities and Exchange Commission, the State Lottery Division, or a whole host of other possibly irritating state agencies. That's not to say that NYRA should be regulated by more entities, but, hey, you're in the gambling business; regulation comes with the territory. Presumably NYRA does have financial records, and presumably they show that it's been conducting its business in a reasonable fashion. If not, then the $125,000 a month that NYRA has reportedly been paying its "integrity monitors." the law firm of Getnick and Getnick, would represent a colossal waste of money. Saying no to the Comptroller just makes you look guilty; if NYRA has nothing to hide, why not just open the books?

Third, NYRA relies on a recent decision by the NY Court of Appeals, the state's highest court, that said the Comptroller did not have the authority to audit the operations of not-for-profit charter schools, even though those schools were receiving public money. That may well be correct, as a matter of law. As a matter of politics, it's among the stupidest positions NYRA has ever taken, perhaps rivaled only by the decision in the 1970s not to operate off-track betting. As every decent lawyer knows, just because you may be right on the law doesn't mean you should go to court. Sometimes the best policy is the one that improves your long-term position, not the one that vindicates every single legal "right" that you might claim.

Cooperating with the Comptroller will, if I'm right about NYRA's finances, show conclusively that NYRA does need more money -- a situation attributable entirely to the state's own delay in getting the slot machines started. I can't imagine why NYRA would not want to do that. Unless, of course, there's something to hide. And, if NYRA's right on its legal claim that the proper oversight authority is the Attorney General, not the Comptroller, will NYRA then comply with a subpoena from Andrew Cuomo for the same books and records that it says Tom DiNapoli can't have? Somehow I doubt it.

Charlie and Steve: you guys have got to stop listening to the lawyers. Just do the right thing.

A Bid That Could Save Maryland Racing

Details have not yet been made public of the initial bids, submitted last week, for the assets of the Maryland Jockey Club -- Laurel, Pimlico and the Bowie training center. And the final auction -- assuming anything's ever final in the ongoing saga of the Magna Entertainment bankruptcy -- won't be held until January 8th. We know that bids are in from real estate developer Carl Verstandig, partnering with a California gaming company, from the Cordish Co., which operates the Arundel Mills mall near Laurel, and from the De Francis family, whose prior stint at the helm of the MJC was somewhat less than stellar. And we suspect that, one way or another, Farnk Stronach will try to hang onto the tracks, either using his personal money or, if he can get away with it, using funding from one of his tame subsidiary corporations, at the usual expense of minority shareholders.

For those of us who would like to see racing continue, and even thrive, in Maryland, none of these bids exactly makes the heart go pitty-pat. Stronach and Joe De Francis have already demonstrated their incompetence, and both Cordish and Verstandig are completely unknown quantities in racing; one always suspects that a developer buying a race track is a lot more interested in its real estate value than in the racing itself.

But there is one bid that might actually make a difference. Blow Horn Equity LLC, headed by Pennsylvania horseman Jeff Seder, announced today that it had submitted a fully funded bid for the MJC properties. It's one of the more exciting ideas that I've seen for actually reviving racing.

Jeff is the founder and CEO of EQB, Inc., a racing advisory service and bloodstock agent based in southeast Pennsylvania. EQB has pioneered the use of a number of scientific techniques for analyzing race horse prospects, including heart scans and, for the two-year-old sales, gait analysis using slow-motion video. Jeff and his colleague Patti Miller have advised most of the country's leading owners, and have selected for purchase many many Grade I and Breeders Cup winners. There's more on EQB, Jeff and Patti here.

[Disclosure: I'm a friend of Jeff's and Patti's and, for the past several years, have played a minor role in their selection of yearlings at the Keeneland September sale.]

he Blow Horn Equity proposal -- the company is named for the highly dangerous Blow Horn Corner near the EQB office -- is funded by private equity, and, like the De Francis proposal, is based on having slot machines (or, if you prefer, video lottery terminals) at Laurel Park. Both bidders assume that the award of a slots license to the nearby Arundel Mills mall can be derailed, either by having the county government refuse zoning permission or by the state's reopening the licensing process. The only reason the license wasn't awarded to Laurel in the first place is that Frank Stronach thought he was above the law and didn't bother to submit the required cash deposit with his bid. Even without specific knowledge of the bids for the MJC, there's substantial opposition to awarding the license to Arundel Mills, which already has a pretty high incidence of crime, not likely to be lessened by the presence of the slot machines.

Under the Blow Horn Equity proposal, a temporary slots facility, with 2,375 machines, could be up and running within six months' of the award of the license, and a full-scale casino would be ready within three years. Considering that New York has now been waiting more than eight years for slot machines at Aqueduct, that's not a bad timetable. Estimated revenue from the slots, to be shared between the state, purses and the breeding program, would be $350 million in the first two years and up to $500 million once the full-scale casino was operating. Even a modest portion of that for purses and for breeders would probably keep Maryland racing alive and healthy.

What makes the proposal exciting, though, is that Jeff is one of the few people in racing who's able to think outside the very small box of received ideas. He's had substantial business experience, as CEO of a textile company and of a Southern California department store chain, in each case engineering turnarounds that left floundering companies newly profitable. And he has a far better record as a money manager, for trusts and pension funds, than most of the folks on Wall Street. He's also a pretty smart guy, with a B.A., a law degree and an M.B.A., all from Harvard, and over 30 years of involvement in scientific analysis of race horse performance.

Jeff's also the founder of the Big Picture Alliance, a foundation that trained over a thousand inner-city Philadelphia teens in video and film techniques and produced over 250 films, not to mention the effect it had on keeping a good number of those kids in school and on the path to productive lives. One can guess that he'd have some useful ideas for involving the similar population in Baltimore that lives around Pimlico.

At this point, I haven't discussed with Jeff any specific ideas for upgrading the Maryland tracks, or for attracting new racing fans. I do know that, if any of the bidders for the MJC properties are able to come up with new ideas that will reinvigorate the spot, he's the one most likely to succeed. Let's hope the bankruptcy court comes to the same conclusion.