"The folks in Florida have decided what the better property is, and they're voting with their dollars," said F. Douglas Reed, director of the University of Arizona's Race Track Industry Program. "It's harder for Magna to win them back."

Joe Fath, who covers the gambling industry at T. Rowe Price, said Gulfstream's slots woes could be attributed to Magna's inexperience with casinos.

"The perspective of most people is you build these racinos and put slot machines and they'll just generate money," Fath said. "You have to have a product and good service."

Calabro said Gulfstream is solving its problems, including not having 1-cent and 2-cent slot machines or a variety of machines.

"We're going to make sure while it's smaller, it'll have the same selection and same feel as a Las Vegas or Atlantic City," Calabro said.

Gulfstream is reconfiguring the first-floor gambling space into a horse race and simulcast lounge, reducing the number of slot machines and adding video poker machines, Calabro said.

Gulfstream's declining slots business has taken a significant financial toll on Magna. The company is operating with continuing losses and has more than $500 million in debt, raising doubts about its ability to stay in business, according to an audit by Ernst & Young.

Magna said yesterday that Gulfstream lost $4.2 million in the third quarter because of higher marketing and operating costs for its slots operation.

Magna Chairman Frank Stronach said yesterday that the worries of some Maryland lawmakers are unfounded.

"I have absolutely no worries that MEC will be a great company, so we have no problem to handle things financially, " Stronach said.

hanah.cho@baltsun.com