03/01/2002 12:00AM

Magna-Suffolk talks stall

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Negotiations between Suffolk Downs and Magna Entertainment on a lease agreement have hit several snags in recent weeks, several racing officials said Friday, delaying and possibly disrupting the deal.

One of the sticking points centers on the possibility of gambling machines being legalized in Massachusetts during Magna's lease of the track, the officials said.

Robert O'Malley, one of the owners of Suffolk, would not comment on details of the negotiations, but said that they had stalled because of "things that are on our side of the equation." O'Malley said he was confident the two sides would ultimately reach an agreement.

Magna officials did not return phone calls on Friday.

When Magna began talking to Suffolk about leasing the track a year ago, gambling machines were not being considered on any political level. But, as in many other states, support for expanded gambling has resurfaced in Massachusetts this year as a way of closing a budget deficit brought to the fore by the recession.

"It was an issue that was ignored," said one official involved in the negotiations. "The current agreement now has to recognize that possibility."

Suffolk's current owners would likely seek a cut of any revenues from expanded gambling if slots or other gambling machines were legalized during Magna's lease.

The lease agreement would allow Magna to operate Suffolk for three years, with two additional one-year options, officials said. Under terms of the original deal, Magna would have paid Suffolk $20 million for the lease, but that figure may have changed in the latest negotiations.