Magna says slots license fee is in escrow
Company that owns Laurel Park failed to submit $28.5 million with application
By Dan Schwind
dschwind@patuxent.com
Posted 2/05/09
Magna Entertainment, the Canadian racing company that owns Laurel Park, is in jeopardy of being disqualified from bidding for a license to operate slot machines at the track.
Under the name Laurel Racing, Magna filed a bid application Monday with the Maryland Video Lottery Facility Location Committee to operate 4,750 machines on the grounds of the racetrack. The company failed to include the $28.5 million license fee due with the proposal.
Today, however, Magna announced in a press release that it had placed $28.5 million in an escrow account at an undisclosed Maryland bank in the name of Laurel Racing Association, Inc.
Magna further stated that it would transfer that money to the Maryland Video Lottery Terminal Facility Location Commission — which, ultimately, will determine which bids are awarded licenses — if the commission agrees to refund the fee in the event that Laurel Racing is granted a license but is denied the proper permits and zoning to operate slots by local authorities.
The Cordish Cos., a Baltimore-based real estate company, also submitted a bid with designs on installing 4,750 slot machines at a facility in Arundel Mills mall. Cordish included the $28.5 million fee with its application.
The future of slots at Laurel Park was thrown into doubt by the state of Magna’s application. The Maryland Video Lottery Facility Committee, which will award the five slot machine operating licenses approved by voters in a constitutional amendment referendum last November, will meet Feb. 12 to determine the status of the bid, according to a story in the Thoroughbred Times, a horse racing industry publication. The committee’s procurement director, Robert Howells, as well as the state attorney general’s office, are expected to advise the committee on a ruling.
Magna officials declined to comment. In a press release from the company issued Monday night, Chairman Frank Stronach said, “We believe that locating the video lottery facility at Laurel Park will help preserve Maryland’s thoroughbred industry.”
The day after its initial application, which only called for the installation of 3,000 machines at Laurel Park, Magna amended its bid and “filed a complete application and looks forward to the bidding process,” according to company spokesman Mike Gathagan. The amended proposal did not include the application fee.
Magna was one of six bidders for five slot licenses available around the state. Along with the site in Anne Arundel, licenses are available in Allegany, Cecil and Worcester counties, as well as the city of Baltimore.
The state also authorized 2.5 percent of slots revenue to go toward fixing up the racetracks in the state, as long as owners matched the funding. All of this figured to benefit Magna, which has lobbied for the legalization of slot machines in the state to help the racing industry compete against competition in Delaware, Pennsylvania and West Virginia, which have slots at their tracks.
One other bidder, Empire Resorts Inc., of New York, also failed to include a license fee. The company was the lone bidder for a license at the Rocky Gap resort in Allegany County.
Slots opponents in the area were encouraged by the news that Magna may have damaged its chances to acquire slots at the track.
The Rev. Kevin McGhee, pastor of Bethany Community Church in West Laurel and an activist with the group Stop Slots Maryland before the referendum vote, said he was “encouraged about the possibility of not having them in Laurel.
“But I don’t know if it’s good news for the state,” he said. “The better news for the state would be if the (Anne Arundel) County Council and county executive would just say they won’t allow slots in Anne Arundel County. I want slots out of Maryland, but I would be very encouraged if we can keep them out of Laurel.”
McGhee said he contacted Anne Arundel County Council member Jamie Benoit, who opposed slots during the referendum vote, in an effort to muster enough votes to halt any zoning that would permit the building of a slots facility.
Benoit said he would vote against any proposal to allow slot machines in the county, but he didn't believe there was enough support on the council to reject a slots proposal.
If the vote allowing slots was close, Benoit said, County Executive John Leopold, who in the past has opposed slot machines, could veto the bill.
But Leopold indicated he would not stand in the way of a slots facility, saying it would bring in needed revenue.
“I have been a long-standing opponent to slots, because that’s my philosophy,” Leopold said. But the voters have spoken, and I do not think it would be appropriate to step on the voice of the people.”
Leopold added that he is drafting zoning ordinances to allow slots and that he would ensure that they would maintain the infrastructure and emergency services for county residents regardless of slots locations.
This story has been updated.
Under the name Laurel Racing, Magna filed a bid application Monday with the Maryland Video Lottery Facility Location Committee to operate 4,750 machines on the grounds of the racetrack. The company failed to include the $28.5 million license fee due with the proposal.
Today, however, Magna announced in a press release that it had placed $28.5 million in an escrow account at an undisclosed Maryland bank in the name of Laurel Racing Association, Inc.
Magna further stated that it would transfer that money to the Maryland Video Lottery Terminal Facility Location Commission — which, ultimately, will determine which bids are awarded licenses — if the commission agrees to refund the fee in the event that Laurel Racing is granted a license but is denied the proper permits and zoning to operate slots by local authorities.
The Cordish Cos., a Baltimore-based real estate company, also submitted a bid with designs on installing 4,750 slot machines at a facility in Arundel Mills mall. Cordish included the $28.5 million fee with its application.
The future of slots at Laurel Park was thrown into doubt by the state of Magna’s application. The Maryland Video Lottery Facility Committee, which will award the five slot machine operating licenses approved by voters in a constitutional amendment referendum last November, will meet Feb. 12 to determine the status of the bid, according to a story in the Thoroughbred Times, a horse racing industry publication. The committee’s procurement director, Robert Howells, as well as the state attorney general’s office, are expected to advise the committee on a ruling.
Magna officials declined to comment. In a press release from the company issued Monday night, Chairman Frank Stronach said, “We believe that locating the video lottery facility at Laurel Park will help preserve Maryland’s thoroughbred industry.”
The day after its initial application, which only called for the installation of 3,000 machines at Laurel Park, Magna amended its bid and “filed a complete application and looks forward to the bidding process,” according to company spokesman Mike Gathagan. The amended proposal did not include the application fee.
Magna was one of six bidders for five slot licenses available around the state. Along with the site in Anne Arundel, licenses are available in Allegany, Cecil and Worcester counties, as well as the city of Baltimore.
The state also authorized 2.5 percent of slots revenue to go toward fixing up the racetracks in the state, as long as owners matched the funding. All of this figured to benefit Magna, which has lobbied for the legalization of slot machines in the state to help the racing industry compete against competition in Delaware, Pennsylvania and West Virginia, which have slots at their tracks.
One other bidder, Empire Resorts Inc., of New York, also failed to include a license fee. The company was the lone bidder for a license at the Rocky Gap resort in Allegany County.
Slots opponents in the area were encouraged by the news that Magna may have damaged its chances to acquire slots at the track.
The Rev. Kevin McGhee, pastor of Bethany Community Church in West Laurel and an activist with the group Stop Slots Maryland before the referendum vote, said he was “encouraged about the possibility of not having them in Laurel.
“But I don’t know if it’s good news for the state,” he said. “The better news for the state would be if the (Anne Arundel) County Council and county executive would just say they won’t allow slots in Anne Arundel County. I want slots out of Maryland, but I would be very encouraged if we can keep them out of Laurel.”
McGhee said he contacted Anne Arundel County Council member Jamie Benoit, who opposed slots during the referendum vote, in an effort to muster enough votes to halt any zoning that would permit the building of a slots facility.
Benoit said he would vote against any proposal to allow slot machines in the county, but he didn't believe there was enough support on the council to reject a slots proposal.
If the vote allowing slots was close, Benoit said, County Executive John Leopold, who in the past has opposed slot machines, could veto the bill.
But Leopold indicated he would not stand in the way of a slots facility, saying it would bring in needed revenue.
“I have been a long-standing opponent to slots, because that’s my philosophy,” Leopold said. But the voters have spoken, and I do not think it would be appropriate to step on the voice of the people.”
Leopold added that he is drafting zoning ordinances to allow slots and that he would ensure that they would maintain the infrastructure and emergency services for county residents regardless of slots locations.
This story has been updated.
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