Maryland commissioner says Magna Ent. racing ‘in turmoil’

December 11, 2007 5:28 AM
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"It’s the first step. We’re trying to be positive. It’s the first time in a long while I’m optimistic about the future of Maryland racing and the Preakness Stakes. At least this gives us a fighting chance to maintain Maryland racing’s industry and heritage."

””Lou Raffetto Jr., CEO of the Maryland Jockey Club, Nov. 24, 2007, following passage of a slot bill in Maryland.

 

"Lou Raffetto leaving Maryland Jockey Club, effective immediately."

””Magna Entertainment release, Nov. 28, 2007.

 

It’s a jungle out there, and the head tiger bit Lou Raffetto’s head off in one quick bite at the end of last month.

Calling from Austria, Frank Stronach dismissed Raffetto, one of the most popular executives in American racing, and replaced him with Chris Dragone, who has run ill-fated Great Lakes Downs and Portland Meadows for Magna in recent years.

Stronach, displeased with the financial performance of the Maryland Jockey Club in recent years, lowered the boom on Raffetto and the Maryland Jockey Club’s senior vice president of finance, Tony Cobuzzi. He said he had great respect for Raffetto and Joe DeFrancis, the former owner of the Maryland Jockey Club, "but we felt we paid for it and we’d like to maybe change a few things."

Under the slots law as passed — a public referendum next November will vote it in or out — Ocean Downs harness in Ocean City and Laurel Racecourse thoroughbreds between Washington and Baltimore, may get slots, but Rosecroft Raceway, on the Washington Beltway, and Pimlico, home of the Preakness, cannot.

Penn National Gaming, the current giant of expansion in American racing and gaming, bought Rosecroft a few weeks ago, or Rosecroft thought it did. Although Penn National announced publicly that it would acquire the track regardless of the slots vote, once it became clear that Rosecroft would not get slots Penn National nullified the sale under a provision of the contract. It’s acquisitive leader, Peter Carlino, one of the most successful gaming and racing executives in America, set his sights instead on operating a casino recently legalized in Kansas, near Wichita.

But back to Raffetto.

His popularity and firing set off shock waves in Maryland, and rising quickly to his defense were two powerful figures in Free State racing. Racing Commissioner John Franzone was furious. He attacked Magna for its policies, called their racing "in turmoil," and said Raffetto’s dismissal jeopardizied their chances of getting a slots license at Laurel.

Alan Foreman, general counsel of the Maryland Thoroughbred Horsemen’s Association, called Raffetto’s firing "the biggest mistake involving Maryland racing since I’ve been in the industry here."

Stronach, when asked about Franzone’s comment on the move endangering Laurel’s chances for slots, said calmly, "If we don’t get it, we don’t get it." He said Dragone took over "with a fresh mind. He is not beholden to anybody. He will work together with our people and try to do a great job."

With the referendum a year away, Dragone will have to work without slots until 2009 at the earliest, while Pennsylvania and Delaware continue growing their racino operations, and West Virginia plows ahead with table games and more.

New Jersey, meanwhile, faces a crisis that Dennis Dowd, senior vice president of racing for the New Jersey Sports and Exposition Authority’s Meadowlands and Monmouth Park, calls "not a pretty sight." The New Jersey commission ordered the Meadowlands to race 141 days in 2008, without the track knowing how much or if it will receive in subsidy monies from the Atlantic City casinos. They have contributed more than $85 million a year for the last four years, but that agreement expires at the end of the year and the casinos have been balking at terms proposed by the tracks, which have a promise from New Jersey governor Jon Corzine to help them get relief.

While all of this is going on out east, strange developments are taking place in the south, again involving Magna. Its slots operations at luxurious Gulfstream Park are running third of three racinos in Broward county, the only county where slots currently are legal, and the track now is proposing to cut back from 1,200 slots, for which it fought hard, to little more than 500, and rely on poker, which does well in Broward. While the rest of American tracks fight for slots, Gulfstream is giving them up.

It looks like Commissioner Franzone in Maryland had the right word for current events in the east and south: turmoil.