- The Washington Times - Friday, February 27, 2009


An attorney for the Laurel Racing Association went to court Thursday to argue that the group’s dismissed Maryland slot machine license bid should be reconsidered. An attorney for the state said the group simply failed to play by the rules.

The dispute stems from a required upfront payment of $3 million per 500 requested slot machines that the state required by a Feb. 2 deadline. The group submitted a bid but failed to include the $28.5 million fee for its proposal to put 4,750 machines at the Laurel Park horse-racing track.

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Alan Rifkin, who is representing the group, said the fee was not included because it’s unconstitutional for the state to require an upfront payment when it is powerless to guarantee the money could be refunded under the law that was passed.

Mr. Rifkin also said that expecting a company to submit a $28.5 million fee with no way of getting the money back in the law was “a commercially unreasonable proposition.”

Laurel Racing, which is a subsidiary of Canada-based Magna Entertainment Corp., was concerned about being able to get a refund in the event local zoning rules impinged on its ability to put a slots parlor at the horse-racing track in Anne Arundel County.

“The word refund doesn’t exist,” Mr. Rifkin told Anne Arundel Circuit Court Judge William Mulford II.

Austin Schlick, an assistant attorney general, said the law does not preclude the possibility of a refund. He also said the group had a chance to challenge how the bidding process was outlined in the state’s request for proposals.

Mr. Schlick also said the group indicated that it wasn’t putting up the money because of market conditions. He told the judge that the company continued to indicate it planned to pay the licensing fee, even a day after the deadline had passed.

“They promised it on February 3 and then stopped promising it,” he said.

Laurel Racing is seeking a court injunction that would allow its bid to be reconsidered. Judge Mulford has three weeks to make a decision.

Earlier this month, a state commission in charge of granting five slot-machine licenses dismissed two of the six submitted bids that were submitted. A bid by New York-based Empire Resorts, which wanted to put slot machines at Rocky Gap State Park, in Allegany County, also was dismissed after it failed to include $4.5 million for 750 machines.

A constitutional amendment approved by voters in November allowed for as many as 15,000 slot machines at five locations. But the nation’s recession and developer reluctance with the overall plan brought bids for just 6,550 machines. That means Maryland has only collected about $39.3 million in upfront fees from bidders for slots, instead of the $90 million that fees for 15,000 machines would have brought in to help fight the state’s budget problems.

The sites that received bids are in Anne Arundel, Cecil and Worcester counties and Baltimore city.

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