Casino operator, harness tracks strike deal in Md.

June 01, 1995|By Frank Langfitt and Ross Peddicord | Frank Langfitt and Ross Peddicord,Sun Staff Writers

In a bold move aimed at muting opposition to casino gambling in Maryland, a nationally known casino operator has forged a partnership with the state's harness-racing industry.

Bally Entertainment Corp. of Chicago struck a deal last night with the association representing the state's harness horsemen

that could give the firm 50 percent ownership in Maryland's two trotting tracks.

The deal marks the first public venture by a casino into the state. And casino and horsing interests said yesterday that it appears to split the major opposition to proposed casino gaming in Maryland -- the horse industry -- because it gives the harness horsemen a financial incentive to support gaming legislation.

"It clearly sends shock waves through the racing industry," said Alan Rifkin, a lobbyist who represents the Maryland Jockey Club, which owns the Laurel and Pimlico thoroughbred tracks.

Bally has "been able to accomplish through their proposal what scores of well-heeled lobbyists have been unable to accomplish and that is shake the foundation of the horse industry's opposition to gaming," he said.

The board of the Cloverleaf association, which represents the state's 1,400 Standardbred owners and trainers, voted 25-3 last night to accept the deal. As a part of the agreement, Bally would provide a $4 million loan to Cloverleaf to complete its acquisition of Rosecroft and Delmarva Raceways from Colt Enterprises.

If the state legislature votes to legalize casinos here, Cloverleaf would offer Bally a 50 percent ownership in the tracks, which the casino company would manage.

The company would be expected to seek a license to operate casinos at both tracks. And the horsemen would get 50 percent of the casinos' profits.

"They are professional entertainment managers," said Joe Thomson, a Cloverleaf board member. But "we still own the track," he said.

Casino promoters portrayed last night's decision as a boost to their efforts to legalize gaming next year.

"It's a huge step forward, because it neutralizes one of the elements of the opposition," said Gerard E. Evans, an Annapolis lobbyist who represents Harveys Casino Resorts, a gaming company based in Lake Tahoe, Nev.

"It turns an opponent into a proponent. We can use all the friends we can get."

Maryland's horse racing industry is widely regarded as the largest and, so far, most organized opposition to casino gaming in the state. Harness racing makes up about 25 percent of the horse industry, according to racing officials. The remainder is thoroughbred racing, which operates at Pimlico Race Course and Laurel Park.

Last night's deal would need the approval of the Maryland Racing Commission before Bally could become an owner of the tracks.

Commission member Allan C. Levey said last night the deal seemed the most favorable possible for the horsemen, who are trying to take over the nearly bankrupt trotting tracks. "It's

actually a great compromise," Mr. Levey said. "This is the best deal that could have happened," he said.

Lingering last night was the question of what Joseph A. De Francis, who operates the thoroughbred tracks, will do in the wake of the Bally deal. Mr. De Francis has vehemently opposed casino gaming, but has also said that if it comes to Maryland, the horse industry must be involved.

Bally Entertainment is one of the nation's larger casino companies and the first to bid publicly for property in Maryland.

Bally owns two casinos in Atlantic City, Bally's Grand and -- at an address made famous by the Monopoly board game -- Bally's Park Place. The company also owns casinos in Las Vegas and Mississippi. In 1993, its gross profits were about $400 million, according to the Smith Barney gaming almanac.

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