Owners of Laurel Park racetrack are trying to revive their disqualified bid for slot machines with a last-ditch constitutional claim, but attorneys for the state argued in court yesterday that "market conditions" rather than a legal flaw led to the defective application.
Long considered a front-runner for a lucrative gambling license, Laurel Park was disqualified this month after its parent, financially ailing Magna Entertainment Corp., failed to submit $28.5 million in required slots-application fees.
Attorneys for the track are suing the state, claiming that the failure to pay was appropriate because the fees are technically not refundable and that the entire bidding process constitutes an illegal "forfeiture of property" prohibited by the Maryland Constitution.
"There is no refundability under the clear and unambiguous language" of the gambling law ratified by voters in November, said Alan Rifkin, an attorney for the track and partner in an influential Annapolis law and lobbying firm that positioned Laurel Park for slots, only to see it come up short at the 11th hour.
In more than an hour of impassioned monologue yesterday in Anne Arundel Circuit Court, Rifkin narrated a wide-ranging argument that suggested Maryland bureaucrats might be committing a "felony" if they were to refund fees, and he implored Judge William C. Mulford II to prevent "enormous harm" to Maryland horse racing by preserving Laurel's chances for slots.
Austin Schlick, chief of litigation in the attorney general's office, offered a less emotional rebuttal. He noted that the track lobbied for the precise legislation it now claims is constitutionally "defective"; that it failed to raise the refundability theory before the Feb. 2 deadline; and that it never mentioned such concerns in its actual application.
Laurel is asking the court to overturn the state's disqualification of its bid. Schlick said such an action would "blow up the entire procurement" and delay slots revenues Maryland is counting on for future education funding.
Schlick also counseled Mulford to mind the "canon of avoiding absurd results," in which Rifkin's literal reading of the law could imply "that a whole range of ordinary government actions are illegal," including bank accounts used by the court.
This month, state officials threw out two of six proposals for slot-machine casinos - at Laurel and Rocky Gap State Park in Western Maryland. Both were ruled ineligible for failure to pay required license fees.
The disqualifications increase the chances that a large casino will be built at Arundel Mills mall and open the possibility of another round of bidding in Allegany County.
Laurel's application has not been made public, but in court filings the state revealed that the track, in its bid submission, blamed "market conditions" for its inability to pay the fees by deadline. Hours after the 2 p.m. filing deadline passed, agents for Laurel sent an e-mail to state procurement officers indicating they remained "hopeful" they would submit the fee that day, according to court records.
Canada-based Magna Entertainment, which also owns Pimlico Race Course in Baltimore, is in serious financial straits and has hired bankruptcy attorneys.
After yesterday's hearing, Rifkin said he was "not permitted" to discuss the contents of Laurel's initial application, and he dismissed suggestions that his constitutional claims should have been raised earlier. "You can raise a constitutional question anytime," he said.
Mulford said he expects to rule on the case before March 12, when the state commission awarding the slots license next meets.
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