A new audit says the short-lived state agency created to steer the future of Maryland’s Thoroughbred horse racing industry lacked sufficient oversight over the expenditure of millions of dollars in public money.

The Maryland Thoroughbred Racetrack Operating Authority, or MTROA, existed for just two years. Lawmakers set it up in 2023 to take charge of reviving Pimlico Race Course in Baltimore and building a new training center. By mid-2025, it had been dissolved, with its duties handed to the Maryland Stadium Authority (MSA) and the Maryland Economic Development Corporation (MEDCO).

An October 10 report by a key legislative agency found “significant deficiencies” in the MTROA’s internal controls and “significant instances of noncompliance with applicable laws, rules, or regulations.”

Specifically, the audit found that the MTROA failed to have proper controls over a $10 million transfer it made to the nonprofit it created to oversee day-to-day racing, the new Maryland Jockey Club (TMJC), or over contracts it entered for various other tasks.

The Office of Legislative Audits (OLA) reviewed MTROA’s finances and operations from June 2023 through its June 2025 demise and found two main problems: the agency never signed a formal operating agreement with TMJC and it handled consulting contracts in ways that made it hard to know whether the state got its money’s worth.

Lawmakers created MTROA after years of debate over how to modernize Maryland’s racing industry and aging facilities. The authority’s mission was to keep the state “best-in-class” for horse racing, plan new or renovated venues, and ensure the sport’s future was on solid footing.

The MTROA was led by a nine voting-member board of directors chaired by Greg Cross, the partner-in-charge of the legal firm Venable’s Baltimore office. The board was supported by five staff members, including executive director Marc Broady, and in fiscal 2025 the MTROA spent approximately $13.5 million, less than 5% of which was for salaries and benefits, according to the audit.

The MTROA developed the so-called Pimlico Plus Plan, which calls for racing to be consolidated at Pimlico Race Course, which would in turn be supported by a training center, subsequently identified as Shamrock Farm in Carroll County.

The legislature’s approval of the Pimlico Plus Plan was not without controversy of its own, with members of the Senate Budget and Taxation Committee decrying the rush to pass the legislation and amending it to create greater transparency and accountability.

A “hot potato,” Senate President Bill Ferguson (D) called it at the time.

In 2024, the Board of Public Works approved the transfer of Pimlico Race Course from its private owner, 1/ST Racing, to MTROA for $1. The deal also allowed racing to continue at Laurel Park while Pimlico was being rebuilt.

That fall, MTROA set up a new, nonprofit version of the Maryland Jockey Club (TMJC) to handle day-to-day racing operations on the state’s behalf. On January 2, 2025, MTROA gave the new organization $10 million in working capital to get started.

While state law enables the issuance of $400 million in bonds to support the Pimlico Plus Plan, the MTROA’s sunset – unexpectedly early – is prior to any of that. According to the legislative audit, the MTROA’s primary activities included analysis and identification of the preferred operating model for Maryland racing, development of the Pimlico Plus Plan, execution of various agreements to carry out the plan, the transfer of funds to TMJC, and oversight of various contractors working on the planning, design, and development of Pimlico.

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What the Audit Found

1. Missing Written Agreements

The audit’s biggest concern was that no written contract was ever finalized between MTROA and TMJC. Contracts would have set forth both a long-term operating agreement between the nonprofit and the government agency and governed the treatment of the $10 million transfer.

That absence of the latter means uncertainty as to whether the funds should be seen as a grant or a loan.

OLA warned that the lack of a formal agreement could cause serious problems down the road. With a massive state expenditure in the offing – and what has been a money-losing racing operation for more than a decade now backstopped by the taxpayers – it is critical to obtain fiscal clarity.

“[A long-term operating agreement’s provisions] would also include the State’s role with the TMJC’s budget process, financial and operational reporting, insurance policies and coverage, naming rights, and default scenarios,” the audit added.

2. Weak Oversight of Consulting Contracts

The second major issue involved consulting contracts worth nearly $2 million. MTROA was exempt from most state procurement laws, but it was still supposed to have its own internal rules for hiring vendors. It never created them, the audit found.

Auditors reviewed five large contracts and found:

• None was competitively bid, so there’s no proof the state got the best price. In one $1.1 million contract, the audit says that the MTROA neither sought vendors other than the awardee nor assessed the reasonableness of the vendor’s proposed pricing.
• Four lacked clear deliverables or deadlines. One contract included as a deliverable “continuous and intense focus” until the project’s end.
• Invoices were vague, offering little detail about the work performed before payments were made.

Without documentation or performance benchmarks, OLA said there’s no assurance taxpayers got fair value for the $1.9 million spent. The audit called for future contracts to include competition, specific goals and timelines, and detailed billing. It also recommended investigating past invoices and recovering any questionable payments.

Because MTROA no longer exists, the Office of the Governor responded to the audit. Officials agreed with most of the findings but disputed whether the $10 million given to TMJC should be called an “advance” or loan. They said state law didn’t define it that way but acknowledged that an agreement should have been in place before TMJC began operating.

The Governor’s Office said a new operating agreement is being developed and should be finished by January 2026.

On the contracting issues, the state fully agreed. MSA and MEDCO have already suspended a number of MTROA’s old contracts and are now handling all future procurements under normal state rules. MSA has launched an internal audit to determine if any improper payments were made and to recover them if necessary.

When the General Assembly decided this past session to sunset the MTROA early, one key delegate said that legislators sought “some more oversight to be able to understand and know what’s going on in real time, which wasn’t happening.”

The OLA report appears to shed light on what she meant.