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Md. commission unanimously rejects 2 slots bids

Laurel Park, Rocky Gap proposals disqualified; track owner Magna asks court to intervene

By Gadi Dechter

February 13, 2009

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State officials threw out yesterday two of six recent proposals for slot-machine casinos at Laurel Park racetrack in Anne Arundel County and Rocky Gap State Park in Western Maryland. The decision increases the chances that a large casino will be built at Arundel Mills mall and opens the possibility of another round of bidding in Allegany County.

Based on advice from the Maryland attorney general's office, the rejected bids were deemed incomplete because they did not include millions of dollars in legally required licensing fees. The seven-member slots panel is expected to decide this year whether to award lucrative gambling licenses to remaining applicants who want to build slots parlors in Baltimore, in Cecil County, adjacent to Arundel Mills and near Ocean City.

Donald C. Fry, chairman of the slots commission, did not allow attorneys for Laurel Park - long considered to be a shoo-in for a slots license - to speak before the unanimous vote. Meanwhile, Annapolis lawyers for the horse track's owners filed a motion in Anne Arundel County Circuit Court asking a judge to intervene, the preliminary legal motion in what could be a protracted court battle.

The commission's action, taken at an Annapolis meeting yesterday, was the first major decision by the appointed panel charged with handing out five casino licenses. Maryland voters decided last year to legalize slots as a revenue source for public schools, and bidders have proposed to install just over one-third of the 15,000 slot machines authorized.

The Cordish Cos. of Baltimore, now the sole bidder for a 4,750-machine license it wants to use at Arundel Mills, welcomed the commission's decision as "obviously the only possible ruling consistent" with state law. "As will become clear," the company said in a statement, "the horse racing industry and tracks like Laurel Park will receive more revenue if a slot casino is operated adjacent to Arundel Mills."

David Cordish, the company's president, has said that he envisions a $1 billion slots and entertainment complex at the mall. The casino would be the state's largest.

But attorneys for Laurel Park are vowing to fight.

"There are many legal chapters yet to be written on this matter," said Alan Rifkin, a partner with the Annapolis law firm representing the racetrack. Laurel Park is arguing that its failure to submit required fees is justified because the state lacks "legal authority" to refund those fees if their application were rejected and that requiring bidders to submit nonrefundable fees is unconstitutional.

The next step is a hearing Feb. 26 in Anne Arundel Circuit Court.

Bonnie Kirkland, an assistant attorney general advising the panel, told members that the bidding rules and underlying law provided "ample evidence" that "it certainly was anticipated and expected" that application fees would be returned to unsuccessful bidders.

Democratic leaders in Annapolis accepted the commission's decision with equanimity. Senate President Thomas V. Mike Miller, who has backed slots at Laurel Park, did not offer support for Magna's argument.

"The rules were made clear to all the bidders," Miller said. "Some of the bidders did not abide by the rules."

Del. Anthony J. O'Donnell, the House minority leader, characterized the slots bidding process as a "mess" and called on Gov. Martin O'Malley to "go back to the drawing board" and figure out "how to put Humpty Dumpty back together again."

But O'Malley said he was not overly "bent out of shape" over lackluster bidding for slots because he expects Maryland to receive $3.3 billion from the federal economic stimulus package. That is more money than the state would have received in the next two years from slots even if bidding had gone "swimmingly," O'Malley said.

Fry said the disqualification of the Rocky Gap bid means that the commission will consider rebidding that 1,500-machine license at some point.

Casper R. Taylor Jr., a lobbyist and former speaker of the House of Delegates, said he hoped that there would be another bid. Taylor, who is from Allegany County, represents bondholders of a financially ailing hotel and resort there that state officials had hoped would be invigorated by slots.

Miller called Magna's failure to secure a slots facility a "major disappointment," because the gambling expansion was envisioned as a way to draw people to Maryland horse tracks. But House Speaker Michael E. Busch said that during 10 years of contentious debate in Annapolis, the slots initiative had evolved beyond "basically an entitlement to racetracks."

Baltimore Sun reporters Julie Bykowicz and Laura Smitherman contributed to this article.

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