On October 10, the Maryland General Assembly’s Office of Legislative Audits released the results of its fiscal compliance audit of the now-defunct Maryland Thoroughbred Racetrack Operating Authority (MTROA).
The auditors reported “significant instances of noncompliance with applicable laws, rules, or regulations” and “significant deficiencies” in MTROA’s internal controls.
Background
The General Assembly created MTROA in 2023 and tasked it with turning Maryland into “a best-in-class location for Thoroughbred horse racing.” MTROA was to: (i) develop new and existing Thoroughbred racing and training facilities; (ii) enter into agreements, leases, partnerships, or contracts necessary to sustain Maryland thoroughbred racing; and (iii) create a separate body, entity, or holding company to carry out any provisions of the statute.
Only one year later, the General Assembly dissolved MTROA over concerns about its lack of transparency and transferred MTROA’s obligations to the Maryland Stadium Authority and the Maryland Economic Development Corporation. Del. Vanessa Atterbeary, the Chair of the House Ways & Means Committee, said at the time: “We just wanted some more oversight to be able to understand and know what’s going on in real time, which wasn’t happening.”
Consulting Contracts
MTROA entered into 13 consulting contracts during its sole year of existence. The audit found that “MTROA did not ensure that [those 13] consulting contracts were in the State’s best interest and that the [consulting] services were appropriate to pay.” The auditors sampled 5 of the 13 contracts and found that MTROA had spent $1.9 million on them “without seeking competition and without ensuring the reasonableness of the pricing.” Four of the contracts included no “clearly defined deliverables and deadlines,” nor were the invoices related to those contracts properly itemized.
The audit report used one particular contract as an example: “MTROA awarded a $1.1 million contract in June 2024 for consulting services for the design, planning, and development of Pimlico. While MTROA management advised that this vendor was selected because of its specialized experience, MTROA procured this contract without seeking vendors other than the awardee and accepted the vendor’s pricing without assessing its reasonableness.”
Moreover, MTROA said during the audit that “while it was aware that the vendor had made recommendations, it did not have any documentation of these recommendations.” MTROA had already paid this vendor over $400,000.
The auditors recommended that the State “investigate the propriety” of the those consulting invoices, ensure that the services paid for were actually provided, and “recover any unsupported payments.” The Governor’s office responded that “MTROA contracts were terminated [effective] July 2025, and any future services shall be procured . . . in accordance with State procurement laws . . . .” The Governor’s office also said that any improper payments “will be pursued for recovery.”
Operating Contracts
MTROA created a 501(c)(4) non-profit called The Maryland Jockey Club (TMJC) to handle day-to-day racing operations. TMJC took over operations on January 1, 2025.
The audit found, however, that MTROA had never executed a long-term operating agreement with TMJC to apportion roles and responsibilities. Nor had MTROA executed an agreement to govern the terms of the $10 million working capital advance the General Assembly had provided for operations. MTROA told the auditors that it had been working on an operating agreement but that it was “unable to finalize the agreement prior to [MTROA’s] sunset in June 2025.”
The auditors said that “[s]uch agreements are critical for establishing oversight over the $527 million that the General Assembly has committed to the redevelopment of Pimlico and training facilities.”
They recommended that the State complete the long-term operating agreements and referred the Maryland Stadium Authority to similar agreements already in place for Thoroughbred racing in 2 other states. The Governor’s office responded that they were working on finalizing the operating agreements for Pimlico that MTROA should have had in place before January 1, 2025.
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The demolition of Pimlico began while this audit was underway. The Preakness Stakes will move to Laurel Park next year and will run there until the Pimlico redevelopment is complete. When Pimlico reopens, Laurel Park will close.
Read our previous MTROA coverage here:
- New Maryland Jockey Club Board of Directors Announced (May 2025)
- BPW Approves $15 Million Demolition Contract for Pimlico and $4.48 Million Shamrock Farm Purchase Agreement (May 2025)
- Maryland General Assembly Undoes 2023 Legislation re Thoroughbred Racing Operations (April 2025)
- Shamrock Farm Selected as New TB Training Center (Dec. 2024)
- Letter from the MHC President (May 2024)
- Government Relations Report: MHC Letter to MTROA re Open Meetings Compliance (October 2023)
- Governor Moore’s New Thoroughbred Racetrack Operating Authority (July 2023)