Vicious cycle of Corporate Welfare

A deal being brokered by Governor O'Malley to subsidize the owners of the racetracks was succinctly described by Jay Hancock of the Baltimore Sun.

Horse tracks seek even bigger trophy from taxpayers

Penn Gaming spends millions upon millions of dollars through the Maryland Jockey Club that delays slot proceeds to the Horse Racing Industry and then wants subsidies? How can they justify spending over 11 million dollars on Rosecroft racetrack if the rest of the tracks are losing money? Penn Gaming only offered unaudited financial statements. Financial statements that include payments to lobbyists such as Sean Malone, payments to attorneys to block casino development, payments to put a referendum on the ballot to stop and then steer casino license to their location. 

The subsidy as crafted by O'Malley's staff gives the owner of the tracks the money that was supposed to be used to fix the tracks. The owners are all out of Maryland so basically, the subsidy is just Maryland money that is thrown across the border to Pennsylvania and Canada. There is no incentive to fix the business plan, in fact this subsidy is a dis-incentive. Fix the business and the subsidy goes away. In three years, if casinos are not built at the tracks, Penn Gaming will abandon the properties and move on to their next victim. 

The president of Penn Gaming has stated unequivocally that Penn Gaming is not in the business of running racetracks or even supporting racetracks. Have we not learned anything from the TARP business of the past few years? Add milestones, conditions, clauses on these subsidies. Don't just require the Maryland Jockey Club and Penn Gaming to show pretend financials. If Penn Gaming is serious, make them put up Pimlico and the Preakness as collateral.