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Pro-slots raised over $7 million

Slots supporters, led by horse racing and gambling interests in the Mid-Atlantic region, raised eight times as much money as their opponents in their successful campaign to persuade voters to allow slot machines in Maryland, according to campaign finance reports released yesterday.

Slots supporters raised nearly $2.7 million in the final sprint of the campaign and more than $7 million total. They spent most of it on television ads, which contended that slots would benefit education funding, according to finance reports covering Oct. 20 to Nov. 18.

Barbara Knickelbein, co-chairwoman of No Casino Maryland, said slots supporters "bought voters with deceptive advertising."

"They told voters that if we don't have slots, your taxes are going to go up," said Knickelbein, who added that she and her husband donated to the Marylanders United to Stop Slots committee right before Election Day. "They used the fear factor, and it was a very persuasive sales strategy."

On Nov. 4, Marylanders approved a constitutional amendment, by a margin of 59 percent to 41 percent, permitting 15,000 slot machines at five locations in the state. Profits will be split among gambling companies, the government and the horse racing industry.

The campaign finance reports released yesterday show that the largest donors to the pro-slots committee Maryland For Our Future were two companies that plan to seek slots licenses. The owners of Laurel Park in Anne Arundel County donated $3 million, and Penn National Gaming, which wants to run slots in Cecil County, gave $2 million.

Yesterday, Magna Entertainment Corp., the Canadian owner of Laurel Park and Pimlico Race Course, announced an agreement with its parent company that includes money for a license application for slots at Laurel Park.

Opponents raised about $940,000 during the campaign and relied on a larger number of small- to medium-size donations. Many of those donors, which included churches, had moral and economic concerns about gambling - primarily that it attracts people who can least afford to lose.

According to campaign reports filed by Marylanders United to Stop Slots, the largest anti-slots ballot committee, James Robinson, a Baltimore native and founder of a movie company, gave $300,000 through his private foundation and his company, Morgan Creek Productions.

Magna said yesterday that it has entered into an agreement with parent MI Developments to reorganize and emerge as a stand-alone company. The relationship between Magna and MID has been a source of discontent for MID shareholders, who want the company to stop financially supporting the money-losing racetrack operations.

MID owns nearly 60 percent of Magna. Under the plan, MID would no longer have an ownership interest in Magna, which would eventually be controlled by Magna founder and CEO Frank Stronach's investment vehicle. MID would be barred from investing any more funds into Magna without the approval of minority MID shareholders.

A special shareholder meeting is expected in the first quarter of 2009. Magna owes MID more than $200 million; the repayment date has been extended to March 31. Until the special shareholder meeting, MID is providing a new loan of up to $50 million to Magna so that the racetrack company can continue to operate.

Magna is also receiving up to $75 million to fund its license application for slots at Laurel Park and to build a slots facility if it is approved.

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