As the sun rose over the mile-long oval at Old Hilltop and the first rays of daylight shot across the infield, bouncing off the glass-fronted grandstand at Pimlico Race Course, two old track hands crossed paths on the asphalt apron below, according to WTOP.

“Merry Preakness,” one said to the other, without even a hint of irony, as the two smiled and kept walking back to their respective jobs in the tough, physical work of the horse trade. Both had been at the Northwest Baltimore track since well before daybreak.

Slow-building excitement was palpable this week at Pimlico as fans and workers alike prepared for Maryland’s grandest thoroughbred celebration of the year: the Preakness Stakes, the second jewel in North America’s Triple Crown of racing.

But on the eve of the 148th running of the Preakness on Saturday, all is not well with the Sport of Kings, whose fortunes have been dimmed by sharply downward trends of late.

Once the most popular spectator sport in the United States, racing is now battling to stay pertinent and afloat amid heavy competition for betting dollars, dramatically waning attendance, the repeated tragedy of horse deaths at tracks nationwide — including at Laurel Park, Pimlico’s sister track — and a struggle for control of the industry in Maryland.

While the sport is not on the verge of going the way of dog tracks and cockfighting, it is facing serious challenges that will likely change the way horse racing is conducted. It is a complicated, multilayered drama whose ultimate resolution will determine the future of racing in the state.

A showdown is brewing in Maryland as state government expands its role in overseeing racing and attempting to jumpstart the stalled improvements at Pimlico and/or Laurel that were approved by the General Assembly more than three years ago.

In its 2020 session, the legislature authorized the sale of $375 million in bonds for capital improvements at the two mile-long tracks, but the bond sale, contingent on the approval of certain still-unsigned agreements, has yet to take place. Since then, cost estimates have nearly doubled, as any sort of progress has ground to a halt.

“The appetite of the state to continue to do this dance is very limited,” said one official. “I think people … are fed up.”

In addition, there is a very real question in the racing industry and among state officials as to whether thoroughbred racing at two tracks can be supported in Maryland, and there has been a push in recent months to consolidate year-round racing at one track, rather than two. Although Laurel Park was once touted as a potential “supertrack” in the state, the focus has now shifted to Pimlico, though that would require finding a location for a training facility and more than 1,000 additional horse stalls.

Against that backdrop is a looming deadline for a negotiated agreement between the track owner-operators — the Canada-based Stronach Group’s Maryland racing subsidiary — the Maryland Thoroughbred Horsemen’s Association, which represents owners and trainers, and the Maryland Horse Breeders’ Association. Their current agreement, already extended from Dec. 31, 2022, is set to expire at midnight June 30.

The Stronach Group, which does business as 1/ST and operates here under the Maryland Jockey Club name, has yet to apply to the Maryland Racing Commission for approval of any live racing or simulcasting days past June 4, either at Pimlico or Laurel Park, fueling speculation as to what the next move be.

The Racing Commission is required to award 180 live racing days each year to Laurel and Pimlico — with a minimum of 40 going to Pimlico — though there are circumstances that can allow those number to be lower, through mutual agreement of the commission and track owner.

With the clock ticking on the operations agreement, the General Assembly this year created the Maryland Thoroughbred Operating Authority, a panel with sweeping powers that would keep racing operating, should the negotiations reach an impasse. Appointments to the new board, which comes into existence June 1, are expected to be made very shortly.

The state apparently already has the legal authority to take the tracks through eminent domain under a 2009 section of Maryland law governing business regulation — Md. Business Regulation Code Section 11-521, “Condemnation of Private Thoroughbred Racing-Related Property for Public Use” — but such condemnation is viewed by most as a somewhat unrealistic “nuclear option.”

Aside from some back-and-forth about whether and how long the expiring agreement might be extended, the focus of recent negotiations has been a Maryland Jockey Club proposal for the horsemen and breeders to give up a greater percentage of their share of purses — racing’s prize money — to offset the cost of track operations, people with knowledge of the discussions said.