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Slots Panel Ready to Move on, Laurel Park Bidder Keeps Fighting

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By Dylan Waugh
Capital News Service
Tuesday, March 12, 2009

ANNAPOLIS - A day after a judge upheld the state slots commission's decision to toss out the Laurel Park slots bid, the commission Thursday took steps toward moving on with its four remaining bids while the Laurel Racing Association vowed to keep fighting to revive its proposal.

The Video Lottery Facility Location Commission announced its choice of PricewaterhouseCoopers to serve as a consultant during the evaluation of the remaining bids. The commission hopes to start working with the firm in time for its next meeting, expected to be after April 15.

Meanwhile, an attorney for Laurel Racing announced plans to appeal the ruling from the Circuit Court for Anne Arundel County in an effort to get the commission to entertain its bid to install 4,750 machines at Laurel Park racetrack.

"Laurel Racing has determined today to take an appeal from the Court's decision regarding the inference of a refundable initial license fee," said Alan Rifkin, an attorney for Laurel Racing Association, in a statement.

Laurel Racing plans to officially file the appeal in the next few days.

Before plans for the appeal were made public, the state's representative from the original Feb. 26 court hearing told the commission he expects the judge's ruling to withstand any challenge.

"We do believe that if challenged, the decision would be affirmed," said Austin Schlick, chief of civil litigation for the attorney general's office.

Laurel Racing has argued the state cannot legally issue refunds for required license fees to bidders whose bids were rejected or failed to gain zoning approval. Laurel Racing did not include the $28.5 million required with its bid for fear the money would not be returned if the bid was not selected, thus leading the state to disqualify it.

In his statement Thursday, Rifkin reiterated that argument.

"A reasonable bidder could only rely on the actual language in the statute, which did not permit a refund," Rifkin said.

Laurel Racing has also appealed to the governor-appointed Maryland State Board of Contract Appeals.

Laurel Racing's parent company, Canada-based Magna Entertainment Corp., expected its bid to challenge the 4,750-machine Arundel Mills Mall proposal by Baltimore-based Cordish Cos. for the Anne Arundel County slots license.

The other remaining bids are for 500 terminals each in downtown Baltimore and Cecil County and 800 machines at Ocean Downs in Worcester County.

The commission isn't expected to make any decisions on the bids until the fall.

The state also tossed out a proposal to put 750 slot machines at Rocky Gap State Park in Allegany County because that developer also failed to include the required license fee.

Magna declared bankruptcy last week and is scheduled to be delisted shortly from the Nasdaq composite index and the Toronto Stock Exchange. Magna also owns Pimlico Race Course, the home of the storied Preakness Stakes.

Magna's financial troubles and the prospect of Laurel Park failing to land a slots license has some questioning the health of the sport in Maryland.

"Racing itself is in jeopardy," said Senate President Thomas V. Mike Miller Jr., D-Calvert.

Miller said he is especially worried about the future of Laurel Park which, along with Pimlico, could be up for sale.

"I think it's in danger of being lost to mixed-use development," Miller said. "It's a very valuable piece of property."

Rifkin, in last month's court hearing, warned that not considering the Laurel Park slots bid could do great harm to horse racing "cultural icons" Laurel Park and Pimlico.

While Magna plans to keep its day-to-day operations intact throughout the bankruptcy proceedings, there is speculation about the state's long-term ability to retain the Preakness.

The state legally has the first right of refusal if the rights to the Preakness are offered for sale. Miller didn't comment directly on whether the state would invoke such rights, but said the state will help keep the second leg of the Triple Crown in Maryland.

"We're going to do everything we can to keep Preakness," he said.


Copyright 2009 University of Maryland Philip Merrill College of Journalism

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