www.baltimoresun.com/news/maryland/politics/bal-md.slots10jun10,0,4884537.story

baltimoresun.com

Laurel Park wants slots rebid

Terms of licensing fees are at issue

By Laura Smitherman | laura.smitherman@baltsun.com

June 10, 2009

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Lawyers for the Laurel Park racetrack asked Maryland's highest court Tuesday to restore its disqualified proposal for a slots casino license, suggesting the state would be better off restarting a bidding process that has fallen short of expectations.

A slots license selection commission tossed out a bid from Laurel Racing Association in February because the company didn't submit the $28.5 million in mandatory licensing fees. A legal team for the track argued in the Court of Appeals that the company was concerned that there was no guarantee it would get the money back if it didn't win a license.

Alan M. Rifkin, a lawyer for Laurel Racing Association, told reporters outside the courthouse that the "best outcome" would be to reopen bidding with the understanding that licensing fees would be refundable.

"This has been a catastrophe for the entire state," Rifkin said, adding that more bidders would emerge and likely pledge to build bigger casinos if uncertainty surrounding licensing fees were dispelled. "They'll raise more money, and they'll protect the Preakness."

State officials received bids this year for less than half of 15,000 machines envisioned by lawmakers who crafted the program as a way to generate much-needed revenue for state coffers and to help the ailing horse-racing industry.

Austin C. Schlick, an assistant attorney general, said Laurel Racing could have raised its legal concerns before the bidding deadline and now is seeking "special treatment."

Officials may open another round of bidding in Allegany County where a proposal to open a casino at Rocky Gap State Park was tossed out, also for failure to submit licensing fees. But whereas that was the only applicant there, Baltimore-based The Cordish Cos. has submitted a proposal to build a casino in Anne Arundel County, where Laurel Park is located. Only one license is allowed per county.

Meanwhile, Penn National Gaming Inc., the sole bidder for a license in Cecil County, has indicated it's exploring a partnership to operate a casino at Laurel Park if county officials don't adopt a zoning change that would allow the project to proceed Arundel Mills mall.

And Laurel Park's owner, Magna Entertainment Corp., has landed in bankruptcy, a situation that could limit its options for undertaking a casino development.

Rifkin said slots are "critically important" to the future of Laurel Park and the Preakness Stakes, a high-profile race at Magna-owned Pimlico Race Course, and that slots proceeds slated to augment race purses might not be enough to keep the racetracks running.

Schlick noted that state officials invited Laurel Racing to submit supplemental information with other bidders by an April deadline, so its proposal could be considered if the company prevailed in court. But the company failed to do so, effectively taking itself out of the running, he said.

Michael Berman, an attorney for Laurel Racing, said the company didn't want to compile detailed supplemental information, including a financing plan, with the uncertainty surrounding the process.


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