Slots debate eyes finances of racetracks

BALTIMORE (AP) — The financial health of a Canadian company that owns two racetracks in Maryland could become part of the debate over legalizing slot machines, as supporters and detractors ready their campaigns for November’s statewide referendum.

Magna Entertainment Corp., owner of the Laurel Park and Pimlico racetracks, posted a fourth-quarter loss of nearly $43 million, dropping its shares to 50 cents in the last two weeks and prompting notification from NASDAQ that it could be delisted from the exchange if it doesn’t get its shares up to $1 by August.

Racing officials have kept an eye on Magna, since the company could be in line for a lucrative license if voters make slots legal. The Maryland Racing Commission asked Magna to detail its financial situation at a meeting next week.

“I think if they’re in financial disarray, it would be difficult to put Magna in,” racing commission Chairman John B. Franzone told the Daily Record of Baltimore. “I think Laurel is a place of gambling now, and it has the infrastructure to support [slots]. … I think if Magna is in stable shape, to me, they’d be the 99 percent odds-on favorite. If it implodes, then [the licensing] could be up for grabs.”

Slots opponents said Magna’s woes could figure in their campaign. W. Minor Carter, a lobbyist for Stop Slots Maryland, said Magna’s Gulfstream Park, in Florida, is one of the company’s worst-performing venues. The racetrack began operating slot machines there in November 2006 and has lost money ever since, according to company filings.

“Certainly, it’s a record that speaks for itself right now,” Mr. Carter said. “We’re certainly going to point that out, that we’re giving this lucrative thing to that kind of company if it’s passed.”

However, Frederick W. Puddester, a former budget secretary who Gov. Martin O’Malley, a Democrat, appointed chairman of the pro-slots group For Maryland, For Our Future, said Magna’s financial status is not the issue.

“From my perspective, this referendum is less about the racetracks and who operates them, because that’s something that’s only going to play out if it passes,” he said. “This is more about education. I don’t see any other way to generate $70 million to $80 million to fund the state budget,” other than increasing taxes.