11/05/2008 12:00AM

Maryland voters say yes to slots

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Voters in Maryland on Tuesday overwhelmingly supported a ballot measure authorizing 15,000 slot machines at five locations in the state, according to local reports, a vote that will provide approximately $140 million in subsidies annually to the horse racing industry.

The referendum will allow casinos in Baltimore City and the counties of Anne Arundel, Cecil, Worcester, and Allegany. Laurel Park is located in Anne Arundel.

According to provisions in the referendum, Thoroughbred and Standardbred horsemen will receive $100 million a year in purse subsidies from casino revenues, regardless of where the casinos are located. The state’s four racetracks will receive $40 million annually in subsidies for capital expenditures.

The measure was heavily supported by the state’s racing industry, which has been in a freefall for years. Most Maryland racing industry officials contended that the sport would have withered and died over the next several years without the subsidies.

Laurel Park and a sister track, Pimlico Race Course, are owned by Magna Entertainment Corp., the struggling racetrack operator. Magna’s stock shot up on Monday and Tuesday in anticipation of the passage of the referendum.

A state gambling commission is expected to award the licenses over the next six months. It will likely take 18 months after the licenses are awarded before a casino opens. The subsidies will not begin to be distributed until the slot machines are operating.

Magna will have several options with Laurel Park. The company could sell Laurel and Pimlico outright in a plan to reduce its $550 million debt – $200 million of which came due this year but has not been repaid. Magna could also attempt to secure the license for Laurel on its own. In addition, Magna could sell the casino rights at Laurel.

Pimlico is not a candidate for the casino in Baltimore.

In a statement released on Wednesday morning, Magna said that it “expects to pursue a [slot-machine] license for Laurel Park as soon as practicable.”

In other ballot measures on Tuesday, voters in Massachusetts passed a referendum banning dog racing, effective in 2010. The vote will force the state’s two dog-racing tracks, Raynham-Taunton and Wonderland, to close. Wonderland is a partner in the state’s only Thoroughbred track, Suffolk Downs. The referendum was pushed by a group that contended that dog racing is cruel.

In Arkansas, voters approved a measure that will allow the state to create a lottery. The measure could have some impact on the state’s two parimutuel facilities, Southland Greryhound Pak and Oaklawn Park, which have dominated the market for gambling in Arkansas. Both tracks also operate a type of video-gambling device that allows bettors to wager on races that have already been run.

In Ohio, voters rejected a measure that would have allowed one privately run casino to open halfway between Cincinnati and Columbus. Voters in Ohio have rejected four separate measures seeking expanded gambling in the state since 1990.