A Las Vegas-based casino company says it has long had a deal to run a slot machine operation at Maryland's Rosecroft Raceway should state legislators decide to legalize such gambling, according to court papers.
The claim is at the heart of a lawsuit that the company, Park Place Entertainment, has filed against the owners of Rosecroft for allegedly trying to renege on the agreement.
The suit, which seeks $100 million in damages, illustrates the keen interest in getting the right to open a slots emporium at Rosecroft. Just off the Capital Beltway, near Washington, the harness track is considered by gambling experts to be potentially the most lucrative site in Maryland for slot machines.
Park Place Entertainment is one of the world's biggest casino companies.
It owns Caesars Palace, Bally's, the Flamingo and other casinos in Las Vegas, Atlantic City, the Mississippi Gulf Coast and elsewhere.
According to a lawsuit filed this month in Prince George's County Circuit Court, Rosecroft's owners signed an agreement in 1997 calling for a subsidiary of Park Place - Bally's Manager - to receive "significant fees" for managing a slots or casino operation at the track.
But the track owners now say the casino company "has no right to manage Rosecroft once gaming activities are approved at the track" and have told others that the 1997 agreement is "unenforceable," the lawsuit says.
Tom Chuckas, chief executive officer of Cloverleaf Enterprises, which owns the track, and John Davey, Cloverleaf's attorney, did not return phone calls yesterday seeking their response to the lawsuit.
Bally's Manager filed the breach of contract suit Dec. 23, just days after the board of Cloverleaf Enterprises voted to sell Rosecroft to a group led by a veterinarian who has been affiliated with the track for 18 years.
Park Place at one time owned Rosecroft through an affiliate of Bally's until the casino company sold the track to Cloverleaf, which is owned by a group of horsemen.
According to the lawsuit, the terms of the sale included a provision giving the casino company the exclusive rights to manage future slots operations.
The management arrangement was to take effect "on the date on which the governor of the state of Maryland signs the legislation enacting gaming laws or gaming laws otherwise become law in the state of Maryland," the suit says.
The arrangement was to be in effect for five years, with the casino company having an option to extend it for an additional five years, the suit says.
Robert W. Stewart, a spokesman for Park Place, said the company maintains that it has a valid, enforceable agreement and filed suit to protect its interests.
"We believe we continue to have the right to manage the facility if and when the legislature and governor authorize a gaming facility at the track," he said. "That's the purpose of this lawsuit, to assert that legal right."
The suit asks the court to order Cloverleaf to honor the 1997 agreement or to pay $100 million, which Park Place estimates is the value of "management fees and other monetary benefits" it would have received over a period of years.