By Gadi Dechter and Laura Smitherman , gadi.dechter@baltsun.com and laura.smitherman@baltsun.com|February 08, 2009
Minutes before a deadline for Maryland slots bids, agents for the Laurel Park racetrack waited on a sidewalk outside the State House for word from corporate headquarters in Canada. Two versions of applications sat in a nearby Ford Expedition, and they didn't know which one to turn in.
When the call finally came Monday, the high-priced lobbyists who had worked for years to legalize slot machine gambling appeared crestfallen. Magna Entertainment Corp. executives instructed them to turn in a bid that lacked $28.5 million in required fees - a decision that imperils its chances of winning.
The stunning turn of events left many Magna supporters in Annapolis confused and angered. But to some longtime observers of the company, which owns Laurel Park, Pimlico Race Course and tracks around the country, it appeared to be another in a history of missteps.
"They've had difficulties in Florida, Pittsburgh ..." said House of Delegates Speaker Michael E. Busch. "You have to ask the question: How can a company that has invested so much time and investment here ... then make the determination they're not going to participate?"
The stumble raises fresh concerns about the future of Maryland horse racing - the very industry the slots initiative was conceived in large part to save - as well as prospects for keeping the Preakness Stakes in Baltimore. Some have speculated that without slots Magna would be forced to sell Laurel Park, a prime piece of real estate between Baltimore and Washington, or that the company would move the Preakness, the second jewel of horse racing's Triple Crown.
A week after the company's last-minute decision to forgo paying the fees by the deadline, the answer to Busch's question is starting to take shape.
Magna officials declined to answer questions about its bid, but lawyers for the company have begun laying the groundwork for a court battle that could stall the state's largest casino project, citing a "lack of clarity" over fee refunds. A number of factors likely complicated Magna's bid, according to documents obtained by The Baltimore Sun and people familiar with the company's deliberations.
Zoning not assured
Executives were concerned about whether they would get the application fee back if their slots plans were derailed by a local zoning fight. The financially strapped company also appeared to have trouble finding a reputable gambling operator to partner with in Maryland, and had committed to a problematic profit-sharing deal with Joseph A. DeFrancis, a former owner of Laurel Park.
