A Maryland state commission rejected a proposal Thursday to give the company that owns the Laurel Park horse racing track a license to put in slot machines, prompting a lawsuit by the track’s owner.
Magna Entertainment Corp., a Canadian-based company, is suing to keep its bid alive.
The company has also entered into an agreement with the Maryland Attorney General’s Office for the state to hold onto its bid until a court can hear the company’s case.
“There are many legal chapters yet to be written on this manner,” said Alan M. Rifkin, an attorney representing one of Magna’s subsidiaries.
To secure a license, Magna was required to submit a $28.5 million fee for its bid to put 4,750 machines at the Laurel Park track.
But the company balked at paying without assurances that it would get the money back if it couldn’t obtain all the necessary zoning and permits.
Magna lost millions of dollars last year and owes hundreds of millions more to creditors.
On Thursday, the seven-member commission voted unanimously to reject Magna’s bid, as well as a bid by a company seeking a license to put slot machines in Rocky Gap State Park.
A procurement official and an assistant attorney general told the commission it could not legally consider bids without licensing fees.
There are four remaining bids for licenses, including a bid from the Baltimore-based Cordish Co. to put 4,750 slots in a mall in Anne Arundel County.
Maryland voters approved a constitutional amendment last November to allow the state to license up to 15,000 slot machines.
But the loss of the Rocky Gap bid means that only 5,800 machines are being requested.
The commission’s decision to reject two bids is another blow to state lawmakers and Gov. Martin O’Malley’s plan to offset a projected $2 billion budget deficit with revenues from slot machines.
Earlier estimates expected the state to pull in $1.3 billion slot machines by 2013.
