02/12/2009 12:00AM

Magna bid for Laurel slots dismissed


The Maryland commission assessing bids to operate slot machines in the state on Thursday morning tossed out two of the six bids submitted earlier this month to build casinos, including the proposal by Magna Entertainment Corp. for a slot-machine parlor at its Laurel Park.

The commission determined that the Magna bid and another submitted by Empire Resorts, a New York-based company, for a casino near Rocky Gap State Park were incomplete because they did not include a licensing fee.

The commission required bidders to submit a fee equal to $3 million for every 500 slot machines the company wanted to operate. For Magna, that total was $28.5 million.

The unanimous vote by the seven-member commission was taken after the panel was advised in a letter from the attorney general's office that the commission "does not have discretion to consider a proposal for a . . . license if the proposal was submitted without the requisite . . . fee."

The commission's chairman, Donald Fry, did not allow attorneys for Laurel Park to speak before the vote. Meanwhile, other attorneys representing Magna Entertainment, a Canadian firm, filed a motion in Anne Arundel County Circuit Court Thursday asking a judge to intervene if Maryland's slots commission rejected its bids.

After the meeting, Fry said the commission would consider a "rebidding" of the slots license for Rocky Gap because there were no qualified applications for a casino there. The Cordish Cos., a Baltimore-based real-estate development company, submitted an alternate proposal for the Anne Arundel site, and is now the only bidder left in the running for the county. The Cordish Cos. included a $28.5 million license application fee with its bid.

Maryland voters authorized 15,000 slot machines at five locations last fall. But this month's bids included valid requests for fewer than half that number, raising uncertainty about Maryland's ability to collect $600 million yearly in slots tax revenue to use toward future budgets.

The injunction request, filed on Thursday morning, calls the entire bid process "constitutionally defective" and asks the court to prevent Magna's bid from being thrown out without a full court hearing. The motion also seeks to prevent the commission from taking any action to disqualify Laurel Park for at least 10 days if an injunction is granted.

When it submitted its bid, Magna "protested and challenged" the non-refundable $28.5 million license fee, the attorneys representing Magna stated in its motion.

Magna was and still is willing to pay the fee to the state in the form of refundable "earnest money," the motion stated, but the company viewed the requirement of a non-refundable fee as unconstitutional.