Maryland Exercises Right of First Refusal to Acquire Preakness Stakes Intellectual Property, Blocking Churchill Downs’ $85M Bid

The state of Maryland has formally exercised its right of first refusal to acquire the intellectual property (IP) rights associated with the Preakness Stakes and the Black-Eyed Susan Stakes, two cornerstone events in the horse racing calendar. This action directly challenges an $85 million bid submitted by Churchill Downs Incorporated in April.

Under Maryland business regulations, the state holds a statutory right to match any competing offer for the IP rights of these races, which are currently held by 1/ST Maryland LLC. The statute requires only that the state match the highest bid, not exceed it, and Maryland has done precisely that.

Governor Wes Moore highlighted the significance of the Preakness Stakes, stating in a press release, “The Preakness Stakes is more than just a race: It is a cornerstone of Maryland’s history, culture, and economy. This decision secures a vital asset for our state, allows Maryland to shape its horse racing destiny, and by leveraging the Preakness’s iconic status and partnering with industry experts to enhance the fan experience, preserve Maryland’s position as a key power player in the Triple Crown for generations to come.”

Held annually at Pimlico Race Course in Baltimore, the Preakness Stakes is the second leg of the Triple Crown, traditionally run two weeks after the Kentucky Derby. The Black-Eyed Susan Stakes, a race for fillies, is also part of this IP acquisition.

Churchill Downs, which owns the Kentucky Derby, had appeared poised to consolidate its hold on the Triple Crown by acquiring the Preakness IP. Following its April announcement of the $85 million offer, the company anticipated closing the deal shortly after the race. However, Maryland’s exercise of its right of first refusal has stalled those plans.

Bill Carstanjen, CEO of Churchill Downs, acknowledged Maryland’s position, stating, “It’s understandable that Maryland wants Preakness IP as a state-owned asset.” He further expressed the company’s commitment to collaboration, saying, “We remain committed to working with the Governor and other elected leaders and horse racing constituents in Maryland to fully realize the potential of a redeveloped Pimlico and Preakness Stakes within the Triple Crown and the broader sports and entertainment landscape.”

The state’s acquisition aligns with its broader involvement in Maryland’s horse racing industry. Maryland already owns Pimlico Race Course and is in the process of purchasing Laurel Park Race Course, thereby consolidating significant control over the region’s racing venues.

Importantly, the acquisition of the Preakness IP will not be funded by Maryland’s general fund. Instead, Governor Moore’s office confirmed that the purchase will be financed through the issuance of a tax-exempt revenue bond. This debt will be serviced by future revenues generated from the Preakness Stakes and Black-Eyed Susan Stakes, including wagering, ticketing, and sponsorship income.

Maryland is concurrently investing in the redevelopment of Pimlico Race Course. In 2024, the Maryland General Assembly authorized the Maryland Stadium Authority to issue $400 million in bonds for this purpose. The redevelopment aims to transform Pimlico into the permanent home of Maryland Thoroughbred racing, increasing the number of racing days from approximately 15 to over 100 annually and supporting more than 500 jobs.

This strategic move by Maryland ensures state control over two of the most prestigious horse racing events in the United States, preserving their legacy and economic impact within the state while limiting Churchill Downs’ expansion of its Triple Crown portfolio.