- The Washington Times - Saturday, August 23, 2003

The deal seemed like it would rescue the struggling Prince George’s County harness track — a $55.4 million infusion of cash from a racing company to buy Rosecroft Raceway and beef up purses over the next 10 years.

Instead, the buyer, Centaur Inc., finds itself rushing to settle a lawsuit filed by a partner it tried to dump — Delaware North Cos. — looking for new financial backing and state approval by Nov. 1, or the deal falls through.

Centaur says it will meet that deadline. But some on the Maryland Racing Commission, which must sign off on the sale, aren’t so sure.

“Unless they come in very quickly, it would be very difficult to do,” said Commissioner Louis Ulman. “It’s such an important issue that we don’t want to rush it.”

Whether Centaur can meet the sale requirements with Cloverleaf Standardbred Breeders Association depends largely on the outcome of its fight with Delaware North in a New York federal court.

Ruling last month, U.S. District Court Judge William Skretny said Centaur could not sever its partnership with Delaware North because of the Buffalo-based company’s past ties to organized crime.

Unless it wins on appeal, Centaur will likely either have to continue its partnership with Delaware North or back out of the sale.

Centaur expects to have the legal problems resolved and get its financial plan and other paperwork to the racing commission in time, according to spokesman Michael Brown.

“We think we are going to get our agreement settled by then [Nov. 1],” he said. “We are doing everything we can.”

One of two tracks in Maryland with harness racing, Rosecroft was once a popular spot for bettors and horse racers alike. Located near the Woodrow Wilson Bridge, it has drawn people from around the Washington area.

But waning interest in harness racing has hurt the track, which rarely fills the stands and offers purses, which now average about $57,000, lower than other tracks. Its prospects also were hurt by the General Assembly’s decision not to approve slots, although the issue will likely be revived next session.

Indianapolis-based Centaur, which runs casino operations in California and Colorado, along with part ownership in an Indiana track, offered somewhat of a reprieve last fall.

Centaur agreed to pay $55.4 million — $10 million for the track and $45.4 million for purses over 10 years. Centaur had to close the deal by Nov. 1 or lose its $2.5 million deposit and right to buy the track.

This spring, it announced that much of the money would be provided by Delaware North, which would take a 75 percent ownership and leave Centaur with a 25 percent stake.

The deal soon soured. Centaur tried to back out in June to look for new partners. Delaware North sued to hold Centaur to the agreement.

Court records show Centaur was worried that a 1972 racketeering conviction involving a Delaware North predecessor company could doom the deal with state regulators.

Delaware North argued that the conviction was an excuse to back out of the deal and look for new partners.

“It is a pretext that is legally irrelevant,” Delaware North lawyer Terry Conners said of Centaur’s argument.

Documents filed in the case suggest Centaur is looking for a partner that will give it a bigger stake in Rosecroft. Centaur twice tried to convince Delaware North to give it a 50 percent share in the deal to no avail.

Mr. Brown denied the company has other partners ready if it wins the court battle.

“I have not heard anyone say that another partner is lined up,” he said.

Even if Centaur is able to settle its legal problems and go ahead with an application, there may not be enough time for the racing commission to approve a new license.

One of the faster licensing processes the commission undertook was the three months it spent reviewing Magna Entertainment’s application to buy a majority stake in Pimlico Race Track and Laurel Park, Mr. Ulman said.

But that approval involved adding Magna to then-owner Maryland Jockey Club’s existing license. The Rosecroft deal will require a new license, which will likely take more time.

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