In his first appearance before a General Assembly committee that could soon decide on enormous profits for his company, the head of a Canadian-based racetrack chain said yesterday that he could rebuild Pimlico Race Course within two years if lawmakers authorize slot-machine gambling.
Jim McAlpine, president and chief executive officer of Magna Entertainment Corp., said that if legislators approve slots at racetracks, the revitalization of the home of the Preakness could begin immediately and be completed in about 24 months.
"For sure, Pimlico needs a total rebuild," McAlpine said. Revenues from slots would accelerate the company's present timetable, he said, allowing Magna to borrow money against gambling revenues for construction.
Magna agreed in July to purchase a controlling interest in the Maryland Jockey Club, which owns Pimlico and Laurel Race Course. Since the agreement, Republican Robert L. Ehrlich Jr. was elected governor, pledging to add slot machines to four state racetracks to help balance the budget and boost the racing industry.
McAlpine made a presentation on racing and slots yesterday to the House Appropriations Committee in Annapolis, along with Joseph A. De Francis, president and chief executive of the Maryland Jockey Club.
The two men faced questions about recent disclosures that De Francis and his sister, Karin, could collect a share of slots profits for two decades - even after they have sold their interest in the tracks.
Del. Howard P. Rawlings of Baltimore, chairman of the Appropriations Committee, said the revelation could raise problems for slots legislation. Some lawmakers might compare the deal to a proposed conversion of CareFirst BlueCross BlueShield to for-profit status, which includes millions of dollars in bonuses for executives, Rawlings said.
But De Francis said his agreement with Magna has no impact on how much money would flow into state coffers. The partners would split whatever profits remain after all expenses, he said, including money for racing prizes, Maryland's share for the state general fund, and payments for loans, advertising and other costs.
Ehrlich has talked about charging an upfront licensing fee that could yield $200 million to $400 million for next year's budget.
Once slots are fully in place at the four racetrack sites, he estimates they could generate $800 million a year for Maryland's treasury. But that would require huge slots emporiums with nearly 3,500 slot machines at each track.