10/22/2009 11:00PM

Tribe wins Lone Star bid

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A company owned by the Chickasaw Nation on Friday prevailed in a second auction for the operating assets of Lone Star Park by outbidding Penn National Gaming Inc. for the Magna Entertainment-owned business, according to officials involved in Magna's bankruptcy.

Global Gaming Group, a wholly owned subsidiary of the Chickasaws, bid $47,857,000 for the assets, which includes a lease on the Dallas-area racetrack and its racing license, according to Magna's lead bankruptcy attorney, Brian Rosen. The property itself is owned by the city of Grand Prairie.

Magna Entertainment, which filed for bankruptcy on March 5, is currently seeking to dispose of most of its racing properties as a way to pay down hundreds of millions of dollars of debt. Its largest creditor, MI Developments, is its parent company.

On Oct. 7, Global Gaming bid $27 million for Lone Star's operating assets in an auction in which it tendered the only bid, according to court papers. However, Magna's creditors' committee petitioned the bankruptcy court to reopen the bidding after Penn National informed Magna's bankruptcy advisors that it would be willing to pay $40 million for the assets.

Magna bought Lone Star's operating assets in 2002 for $99 million. The value of the stake has eroded sharply since the deal was struck, largely because of the track's struggles to turn a profit. In court papers filed this week, Magna said that it has had $44 million in operating losses at the track in the past seven years.

Although Chickasaw officials did not return phone calls on Friday, officials for the tribe have said that they were interested in Lone Star in order to protect their casino properties in Oklahoma and to capitalize on a local circuit with Remington Park in Oklahoma City. Global Gaming purchased Remington from Magna for $82 million two months ago, and the tribe itself owns and operates 13 casinos in Oklahoma. Several of the Oklahoma casinos are located along the border with Texas.

David Hooper, the executive director of the Texas Thoroughbred Association, said the Chickasaws would be welcomed by horsemen in Texas because owners and trainers believe the tribe will not abandon the track as long as casino gambling remains in play in the state. Texas racing interests are lobbying legislators to introduce a bill authorizing slot machines at racetracks when the legislature is next scheduled to meet in 2011.

"I'm sure they want to protect their investment should [slot machines] come to Texas," Hooper said. "And obviously they must think that's worth $48 million."