NEWS
Laurel Racing seeks reinstatement of slots bid
Posted: Tuesday, June 09, 2009 4:52 PM
by John Scheinman
Lawyers for the Laurel Racing Association stated their case before the Maryland Court of Appeals on Tuesday, seeking to have its bid for a license to operate slot machines in the state reinstated.
Led by attorney Michael Berman, the Magna Entertainment Corp. subsidiary argued that there was no written escrow agreement in the request for proposals that provided for a refund of the licensing fees.
The Laurel Racing Association, a subsidiary of the Maryland Jockey Club as well as the bankrupt Canadian racing company, was contesting a Circuit Court ruling that upheld the association’s disqualification from bidding on a license to operate slot machines at Laurel Park.
The organization was disqualified on February 12 from bidding further on one of five operating licenses being awarded in the state after failing to put up a mandatory $28.5-million fee required with the application submission. The company had, however, put up $47,500 for the right to submit a bid.
Berman asked the court justices to reinstate the association’s bid. He said it was unclear whether the $28.5-million would have been refunded had Laurel lost its bid for a slots license as well as whether the money was going to be used by the state while it held the payment.
The state, represented by Austin Schlick, chief of litigation for the attorney general’s office, countered by saying the organization only made claims on the unconstitutionality of the request for proposals after it had been disqualified.
Schlick said the association sought a “special deal,” wanting the Video Lottery Facility Location Commission to “give them special treatment for not meeting their deadlines.”
At the time the fee was due, the organization gave “market reasons why it was not submitting the fee” but not constitutional ones, Schlick said.
Judge Joseph Murphy wondered aloud, however, why the writers of the request for proposals to bid did not make language about refundable fees clearer.
“I can’t imagine thoughtful people putting this together didn’t ask each other, ‘Is this refundable or not?’ ” Murphy interjected at one point in the hearing. “I can’t believe they didn’t discuss this.”
Schlick responded by saying that a fiscal note that accompanied the request for proposals addressed the refund, which the state believes also was implied in the language.
Murphy questioned the ambiguity.
“It’s a gamble, just like a slot machine winner,” he suggested of whether or not there was clear language guaranteeing the money would be refunded to losing bidders.
No timetable has been set on when the Court of Appeals, the highest in the state, might rule in the case.
Laurel had hoped to bid to put 4,750 slot machines at the track. Before being disqualified, it was competing for a license in Anne Arundel County with the Cordish Cos., which plans to build a slot machine casino at the Arundel Mills mall.
John Scheinman is a Maryland-based Thoroughbred Times correspondent
