Maryland Moves to Acquire Preakness Stakes Intellectual Property for $85 Million

The state of Maryland has committed to purchasing the intellectual property associated with the Preakness Stakes and Black-Eyed Susan Stakes by matching an $85 million offer previously made by Churchill Downs Inc., Governor Wes Moore’s office announced on Thursday.

To finance the acquisition, Maryland will issue 30-year bonds through the Maryland Economic Development Corporation (MEDCO). The debt service on these bonds will be managed by the nonprofit Maryland Jockey Club (TMJC), which oversees day-to-day racing operations within the state. According to the Governor’s office, the debt will be backed by future revenues generated from the Preakness Stakes and Black-Eyed Susan events, including wagering, ticketing, and sponsorship income.

Governor Moore emphasized the significance of the races, stating, “The Preakness Stakes is more than just a race; it is a cornerstone of Maryland’s history, culture, and economy.”

This decision effectively concludes a complex chapter in Maryland’s racing history, which has been marked by shifting ownership and operational challenges.

Mark Anthony Thomas, CEO of the Greater Baltimore Committee, highlighted the strategic value of the acquisition: “Acquiring the Preakness intellectual property secures one of Maryland’s signature assets and creates an opportunity to generate even greater economic value through tourism, business investment, sponsorship, job creation, and cultural activity.”

The intellectual property issue arose from a prior agreement negotiated by the Maryland Thoroughbred Racetrack Operating Authority (MTROA) and the Stronach Group (operating as 1/ST Racing). While this agreement allowed 1/ST to exit Maryland and transferred ownership of Pimlico Race Course to the state, it permitted 1/ST to retain ownership of the Preakness Stakes intellectual property.

Under that arrangement, Maryland’s track operator held an exclusive license to conduct the Preakness and Black-Eyed Susan races but was obligated to pay 1/ST a base annual fee of $3 million, increasing by 2.5% each year, plus 2% of the total wagering handle from Preakness weekend. With the 2026 handle estimated at approximately $130 million, this would have resulted in an additional payment of $2.6 million, totaling $5.6 million for the year.

The MTROA was unexpectedly dissolved by the Maryland legislature in 2025, two years ahead of schedule. A subsequent report criticized the authority for lax cost controls and noncompliance with legal requirements. Furthermore, a major asset acquisition by the MTROA—the Shamrock Farm intended as a Thoroughbred training center—was rejected by the Maryland Stadium Authority as unsuitable.

On April 21, Churchill Downs Inc. announced it had entered into a definitive agreement to acquire the intellectual property rights, including all trademarks, related to the Preakness Stakes and Black-Eyed Susan Stakes. This announcement surprised Maryland’s racing community, with insiders describing the move as “blindsiding.”

Some stakeholders expressed concern, recalling Churchill Downs’ closure of Arlington Park and fearing similar outcomes. Others remained hopeful, citing Churchill’s successful stewardship of the Kentucky Derby, which has grown into a globally prominent event under their management.

Given the state’s substantial investments in revitalizing Pimlico Race Course and establishing a new training center, Maryland’s leadership viewed securing the Preakness intellectual property as essential to ensuring the long-term economic viability of the local racing industry. Governor Moore underscored these “historic investments” in his statement.

The expected debt service on the bonds will approximate the annual payments that would have been made under the licensing agreement, totaling roughly $200 million over 30 years. Essentially, Maryland has transitioned from a lease-based arrangement to owning the intellectual property outright, akin to swapping a lease for a mortgage on one of horse racing’s most prestigious events.

Frank Vespe, founder and publisher of The Racing Biz, has extensive experience in the horse racing industry and provides ongoing coverage of developments in Maryland and beyond. He can be reached at frank@theracingbiz.com or followed on Twitter @TheRacingBiz.