12/17/2002 1:00AM

Magna reveals slots-split deal


Magna Entertainment will receive as much as 50 percent of any track revenue from slot machines at Laurel Park or Pimlico Race Course during the first 10 years that any machines are up and running, according to a recent document Magna filed with the Securities and Exchange Commission.

When it was negotiating an agreement to buy majority shares in the two tracks earlier this year, Magna set up a partnership it to manage any future slots operations. In addition to Magna, the slots partnership includes the partners Magna bought out in Laurel and Pimlico, Joe and Karin De Francis, who remain minority owners in the two tracks.

Under the deal, Magna will get 35 percent of the partnership's pre-tax earnings from slots during the first five years of operation. The remainder will be split by the De Francises and the tracks' three other former partners, the Laurel Guida Group, Leucadia Investments, and Martin Jacobs.

Magna's cut will rise to 50 percent during the next five years, and then to 60 percent in the 10 years after that. After 20 years of operations, Magna will get all the money that the partnership earns from slots.

Slot machines are not currently legal in Maryland, but governor-elect Robert Ehrlich has said he supports allowing them at racetracks as a way of raising money for government.