Maryland gambles $500M on horse racing as industry shrinks, costs rise

BALTIMORE - Maryland is committing more than half a billion dollars to rebuild Pimlico Race Course and try to preserve its horse racing industry, a gamble made as the project's costs balloon and its expected returns remain uncertain as the sport shrinks.

The plan calls for $400 million to build a new Pimlico in northwest Baltimore's Park Heights neighborhood, and another $120 million to convert Laurel Park, 25 miles away, into a year-round horse training center.

State and industry leaders say rebuilding Pimlico and Laurel is key to saving Maryland racing - an industry woven into the state's identity, farm economy, and hopes for reviving Park Heights.

But its success depends on an untested venue and unknown future demand - underscoring the uncertainty surrounding the project's long-term return.

The Pimlico rebuild is being financed through bonds issued by the Maryland Stadium Authority, to be repaid largely with state lottery revenue, along with some casino funds. Since the project began, the overall cost has climbed - the work at both tracks was budgeted at $375 million in 2020 - and the state's annual borrowing costs have risen nearly 60%.

Records reviewed by The Baltimore Sun show the cost of financing the Pimlico rebuild has risen - from about $17 million to as much as $29 million - meaning taxpayers will pay substantially more each year to build essentially the same facility envisioned in earlier plans.

"This is a significant public investment, and we should be honest about the fact that its success is not guaranteed," said state Senate Minority Leader Steve Hershey.

The middle leg

Gov. Wes Moore and other supporters say the Preakness - the middle leg of racing's prestigious "Triple Crown" series - draws visitors and positive national attention to Baltimore. Pimlico's faded old grandstand is now demolished, and the barns flattened, but the track once hosted champions such as Secretariat and Seabiscuit.

"I would argue, from the standpoint of public policy, it's a lot more efficient and a lot cheaper to preserve an existing asset than to try and create a new asset," said Joe De Francis, former majority owner and CEO of the Maryland Jockey Club, which operated Pimlico and Laurel.

By committing so much money, the state is also effectively asking taxpayers to weigh tradition against cost. The sport is as much a part of the state's identity as blue crabs and the Chesapeake Bay.

The multi-year rebuilds come as horse racing nationally is contracting and facing greater competition from online gambling. Smaller racetracks have closed or curtailed operations in recent years, even as marquee events such as the Kentucky Derby retain popularity.

"I don't think that it's a worthwhile investment from an economic standpoint," said Dennis Coates, a UMBC economics professor who has often questioned whether public subsidies for sports venues pay off economically. "Take that $400 million and distribute it in that neighborhood, and I think you get a lot more revitalization in the neighborhood than will ever happen by spending it on fixing the track," Coates said.

Another economist, Victor Matheson, says the state of horse racing should signal the need for caution. "It's hard to know exactly what role horse racing has anymore," said Matheson, a professor at the College of the Holy Cross. "It's not just that every state has a casino and a lottery. Almost all of them have sports betting, and sports betting is in your pocket. The monopoly that horse racing had on gambling has been falling apart since the 1970s," he said.

The project's backers say in response that the Pimlico plan envisions more than racing - such events as farmer's markets, proms and weddings - that don't rely on racing. They say Maryland could lose the Preakness without the Baltimore track because Laurel's footprint isn't big enough to host such a big race, at least not permanently.

This Preakness, which will be held at Laurel on May 16 while Pimlico is being constructed, is scheduled to return to Baltimore next year.

Horsemen paying a share

Records show Maryland horsemen - including horse owners and trainers - are contributing $5 million per year to help pay debt service. That money comes from the horsemen's share of casino slot revenues under state law. The $5 million would otherwise go toward purses, the prize money paid to winners.

Under this agreement, the horsemen are required to cover any operating losses of the nonprofit that runs Maryland's thoroughbred racing.

The industry has substantial "skin in the game," said Alan Foreman, longtime counsel to the Maryland Thoroughbred Horsemen's Association. "The new Pimlico gives Maryland racing the opportunity to compete and grow," he said. "There will be an aura and curiosity factor when Pimlico opens. The challenge for the industry will be to sustain and grow this interest."

But while the state controls Pimlico, it doesn't own the trademarks and branding tied to the Preakness. Those rights were recently purchased by Churchill Downs, the Kentucky-based company that also owns the Kentucky Derby.

"Obviously, this is an issue," said Matheson, the professor. If the state had the rights to sell Preakness merchandise, "that would go at least some of the way to covering the $400 million," he said.

Laurel misstep

This year's Preakness at Laurel will be much smaller and more exclusive than Baltimore's Preakness, which was shared by celebrities and concertgoers in the occasionally rowdy infield.

The state's recently approved $48.5 million purchase of Laurel for its horse training hub follows a misstep.

In 2025, Maryland spent $4.5 million to buy Shamrock Farm in Carroll County and turn it into the training center now intended for Laurel.

But last December, the Carroll County Board of Commissioners wrote to the Maryland Stadium Authority outlining concerns with the Shamrock Farm project, including traffic impacts, water management, electric demand and impacts on nearby property values.

The project collapsed because of environmental restrictions and runaway costs, and the state shifted attention to Laurel instead. The episode led to state lawmakers questioning whether the state had fully vetted Shamrock Farm before buying it.

In February, stadium authority official Gary McGuigan said during a Maryland Racing Commission meeting that the state-created operating authority that purchased Shamrock Farms did so "without doing proper due diligence," according to the official meeting minutes.

It's hard to predict how different the Preakness might look in a new Pimlico. The infield - known for concerts and raucous parties as well as fancy hospitality tents - will remain the same, and there will be more parking. But the grandstand will be smaller, temporary seating will be brought in, and racing officials say it's too soon to predict whether the event will come close to drawing more than 100,000, as was reported by race organizers in the past.

‘Be prepared to reassess'

Sen. Hershey questioned the plan because, among other reasons, it splits racing operations between Pimlico and Laurel, "and requires horses to be transported daily for racing."

He said there should be clear performance benchmarks - such as attendance targets and economic impact figures - tied to the projects, and that the state "needs to track outcomes carefully and be prepared to reassess if the expected benefits do not materialize."

The 2024 legislation approving the rebuild - overwhelmingly approved by the Democratic-controlled General Assembly - transferred Pimlico from the Stronach Group, its previous owner, to a state-created nonprofit.

Asked why the bill did not contain any Pimlico performance benchmarks, a Moore spokesperson referred a Sun reporter to prior statements from his administration projecting the new track will support more than 500 jobs and become the centerpiece of a state industry that sustains more than 28,000 jobs and helps drive the state's economy.

‘Tremendous economic impact'

In today's dollars, the Pimlico investment is roughly comparable to what Maryland spent to build Oriole Park at Camden Yards in 1992 and M&T Bank Stadium in 1998. The legislation authorizing the stadiums did not include performance benchmarks, although consultants and policy groups have conducted economic impact studies on the venues over the years with varying conclusions.

State and racing officials said there will be numbers - such as bond ratings, handle, and visitor spending - from which to evaluate the track's success.

The handle is the amount wagered on races. Bonds are rated on the reliability of the state-backed revenue streams supporting them, but not on whether the racetrack itself succeeds.

"We believe it will have a tremendous economic impact not only from measurable on-track attendance and handle, but also through community indicators," said Bill Knauf, president of the Maryland Jockey Club, the nonprofit track operator. "With year-round activity on the property, we expect increases in hotel room occupancy, restaurant traffic, and attendance on non-race days, including concerts, community meetings and other forms of entertainment."

Bill Cole, a former head of the Baltimore Development Corporation who helped negotiate the original Pimlico plan, said he remains "very hopeful that the types of amenities they're creating there will draw people in who want to come and have dinner and also maybe watch a race."

But even industry insiders acknowledge Maryland racing's daunting challenges.

"It faces issues confronting the entire industry," said Foreman, the horsemen's group counsel. He lists those issues as "a declining foal crop, intense competition for fewer horses within the region, handle that is flat, and intense competition for the entertainment and gambling dollar."

Once it fully opens, Pimlico will host about 120 racing days a year instead of the dozen or so it was staging before construction began last year.

Community shares in profits

Under the rebuild plan, 10% of Pimlico's year-round profits will be fed back into the community.

Because the new track is untested, it's unclear how much revenue will ultimately flow back to the community.

On a recent weekday, Yolanda Jiggetts, CEO of Park Heights Renaissance, the neighborhood nonprofit overseeing revitalization, stood near the corner of Park Heights and W. Belvedere avenues. At her back was the massive Pimlico construction area.

Historically, much of the community hasn't felt like the race is "for them," Jiggetts said.

She and others said the community hasn't been waiting around for Pimlico-related money before proceeding with renewal projects. But they hope that even the promise of a new track will help attract private investment.

"I think it's fair to say investment in the community would not be taking place to the extent that it is if there was a fire sale of Pimlico," said Del. Sandy Rosenberg, who represents the area.

Jiggetts' checklist of projects - local-owned eateries, a 60-plus unit housing development on W. Belvedere, medical clinics, and housing nonprofit organizations - is viable through fundraising efforts from the city and state levels, irrespective of Pimlico.

"All of this was happening, regardless. While we're doing all this other renovation, we don't want that aging dinosaur sitting there," Jiggetts said, referring to Pimlico.

Copyright 2026 Tribune Content Agency. All Rights Reserved.

This story was originally published May 3, 2026 at 2:33 AM.