Faulty bid on slots blurs Md. horse racing's future

Laurel Park owner's difficulties stir fears about Preakness' fate

Even with a complete application, Magna's bid for a slots license would have likely faced especially strong scrutiny. The company's ability to operate a gambling business has long been questioned by some state and industry officials. Laurel Park's loss widened to $4.3 million in 2007, up from $3.6 million the year before, according to audited financial reports submitted to the Maryland Racing Commission.

The company also has had trouble with its slots operations. Its largest slots casino, at South Florida's Gulfstream Park, lost $15.8 million in 2007, financial documents with the Florida Department of Business and Professional Regulation show. To operate, Magna is surviving on cash infusions from its parent, MI Developments, a real estate company. It provided a loan of up to $50 million late last year to Magna.

The day after the Maryland bid deadline, Magna's chief appeared in Laurel before the Maryland Racing Commission. Stronach was "extremely concerned" about his company's incomplete application, said John B. Franzone, chairman of the racing commission, but also "absolutely, unequivocally" determined to maintain Magna's support of Maryland horse racing and the Preakness.

The loss of the Preakness had been so dreaded that Maryland's gambling law was written so that Magna would share in some slots proceeds only if it kept running the race in the state. The tracks would still be eligible for purse subsidies if Magna maintained a certain number of racing days in Maryland.

Still, Franzone said Magna's major stumble down the stretch this week - and its formidable competition from the well-heeled Cordish Cos., which also offered a bid in Anne Arundel - is "devastating" to the state's horsemen who badly wanted a casino at a major track to bolster the fading industry's fortunes.

"Nobody has more of an investment in North American racing than Frank Stronach," said Franzone. "And when it's finally time to hit pay dirt ... it's just very unfortunate."

Baltimore Sun reporter Hanah Cho contributed to this article.