Magna leaving Michigan

Magna Entertainment Corp. does not plan to apply for racing dates in 2008 at its Great Lakes Downs racetrack in Michigan, citing ongoing business losses at the track, according to a release from the company Thursday.

On Wednesday at a meeting with the Michigan Horsemen's Benevolent and Protective Association, the company informed trainers and owners that the 2007 meet would be the last at the track unless it is sold or leased to another operating group, according to Gary Tinkle, the executive director of the Michigan horsemen.

"It didn't come as a total surprise," said Tinkle. "We were aware that they had been losing money for years on the track, and we're just appreciative that Magna made such a strong go at it."

Although Magna officials did not return phone calls on Thursday, the company's statement said it "very much regrets the decision to discontinue operating Great Lakes Downs, which will affect the lives of many people involved in the racing industry." The statement said that Magna expects to post a $1.8 million pre-tax loss for Great Lakes in 2006.

"MEC cannot continue to subsidize horse racing in Michigan with no prospect of future profitability," the statement said.

Magna's statement went on to say that "should the regulatory environment become more conducive to horseracing in Michigan and permit race track operations to compete on a level playing field, MEC would be prepared to reconsider this decision."

Great Lakes opened in 1999, one year after Michigan's only other Thoroughbred track, Detroit Race Course, closed its doors. It was purchased by Magna for an undisclosed price in 2000 during the company's rapid expansion phase. Since then, the track has failed to turn a profit, including a $1.6 million loss in 2005, though Magna has held on to the track in the hopes that legislation would be passed allowing slot machines or casino-type gambling at Michigan racetracks. Currently, there are 22 casinos in the state.

Great Lakes is scheduled to run a 100-day live meet this year from May 5 to Nov. 6, on a Friday through Tuesday schedule. Tinkle said that Magna asked the horsemen to consider accepting fewer racing days this year in an effort to cut costs.

Magna, the largest racetrack operator in the U.S., has lost hundreds of millions of dollars over the past four years, and late last year it sold perhaps its most valuable property, a harness track in Pennsylvania that will soon operate slot machines, for $200 million in order to help pay down a half-billion debt load.

In 2002, Magna purchased land in Romulus, near Detroit, and announced plans to build a $200 million track. The plans were shelved when Magna did not get commitments from the state for casino gambling at the site.