02/03/2009 12:00AM

Magna bids for casino license


Magna Entertainment Corp., the owner of Laurel Park and Pimlico Race Course in Maryland, submitted a bid on Monday to a Maryland commission charged with awarding five casino licenses in the state by April.

Monday was the deadline to submit bids for one of the five licenses, which will be evaluated over the next several months by the seven-member Video Lottery Facility Location Committee. The committee was created after voters last year approved a referendum allowing 15,000 slot machines to be installed at five unspecified locations in the state.

Magna, which has lost $400 million over the last four years and is struggling to repay $400 million in debt, is hoping to secure the license that is reserved for Anne Arundel County, where Laurel is located. Donald Fry, the head of the commission, said that six companies had submitted bids for the five licenses, but he said the identities of the companies would not be made public until Tuesday.

Officials of Laurel and Pimlico were scheduled to provide details of the Magna bid on Monday afternoon, but those plans were canceled late in the day.

Voters approved the casino referendum in November. Since then, economic conditions have continued to deteriorate, and many gambling operators have pulled back on projects that were planned prior to the worldwide credit meltdown.

The Maryland bidding process was once expected to attract dozens of potential operators. However, many companies have reduced their expectations for the Maryland gambling market, especially because of the state's 67 percent take of gross gambling profits. The tax rate is one of the highest in the country.

Prior to the Monday deadline, three other companies had indicated they would submit bids: Penn National Gaming Inc., a racetrack and casino operator; the Cordish Cos., a real-estate development firm; and Halsey Minor, an Internet entrepreneur. Minor, who is also a racehorse owner, had said that he would submit a bid for the Anne Arundel license.

Supporters of slot machines in Maryland have estimated that the casinos will generate $600 million annually for the state. The referendum also included requirements that the casinos make $140 million annually in payments to the horseracing industry, in a mix of subsidies for capital improvements and purses.

In addition to the Anne Arundel site, casinos were authorized for sites in the counties of Cecil, Worcester, and Allegany, as well as the city of Baltimore. Although Pimlico is located in Baltimore, the referendum restricted the casino license to the downtown area.

The location committee is expected to award the licenses by April through a fast-track process. The process will include background checks on the companies and an attempt to determine if the bid is financially viable. As a result, it is possible that one or more of the gambling licenses will not be awarded if the state does not believe a bid can succeed.