10/08/2009 11:00PM

Chickasaw tribe wins auction for Lone Star


A company owned by the Chickasaw Nation has won an auction to purchase the operating assets of Lone Star Park in Grand Prairie, Texas, from the bankrupt racing company Magna Entertainment Corp. with a $27 million bid, according to Texas racing officials.

Details of the transaction are scheduled to be heard by the bankruptcy court overseeing Magna's reorganization on Oct. 14, one week after the auction was held. According to Texas officials, the Chickasaw company, Global Gaming Solutions, won the auction for the operating assets with the $27 million bid it submitted as a "stalking horse" at the beginning of September, suggesting that no other bids were submitted for the track.

Officials of Global Gaming and Magna's bankruptcy representatives did not return phone calls by Friday afternoon.

If the bid is approved by the bankruptcy court, Global Gaming will need to take on Texas partners in order to comply with state laws that require racing licenses to be held by companies in which Texas residents are the majority owners. (Public companies like Magna are not required to comply with the rule.)

Jean Cook, a spokesperson for the Texas Racing Commission, which awards racing licenses, said on Friday that Global Gaming had not yet identified any Texas partners. However, the company is not expected to begin working with the commission until the transaction is approved next Wednesday.

Following that hearing, Global Gaming will need to submit a license application naming its partners and providing other financial information in order to be considered for a license from the commission.

"I think everyone is hoping for closure after Wednesday," Cook said.

If the sale is approved, Global Gaming will have succeeded in purchasing two former Magna properties out of bankruptcy. In September, Global Gaming was the only bidder for Remington Park, a racetrack and casino in Oklahoma City, with a bid of $80.25 million.

The Chickasaw Nation already owns 15 other gambling properties in Oklahoma.

Magna, which filed for bankruptcy in March, purchased the operating assets of Lone Star for $99 million in 2002. The deal did not include title for the land and buildings at the track, and, in its simplest form, represented the acquisition of the track's racing license and the revenue streams provided by events held at the track.

The price paid by Global Gaming indicates that Lone Star's profit is minimal, if the track is generating a profit at all. Most of the value of the track is tied to whether a buyer believes the Texas legislature will authorize slot machines at racetracks sometime in the future.