By DYLAN WAUGH
ANNAPOLIS (Feb. 27, 2009)—An attorney for the Laurel Racing Association said in court Thursday the group's recently-disqualified Laurel Park slots bid should be reconsidered for one of Maryland's five slot parlor licenses, questioning the constitutionality of state law.
The bid was tossed out by the state slots panel on Feb. 12 for failing to include millions in required licensing fees. The Laurel Racing Association claimed it withheld the money because it doubted the state's ability to legally issue refunds to bidders whose bids were rejected or failed to gain zoning approval.
The "defective" law does not allow the state to give refunds, making the bidding process unconstitutional, said Alan Rifkin, an attorney representing the racing association and its parent company, the Maryland Jockey Club.
"The language is clear," Rifkin told Anne Arundel Circuit Court Judge William Mulford II. "There is no refund ability."
Austin Schlick, an assistant attorney general, said the state is allowed under the law to refund failed licensing fees and would not look to hold onto the money.
But Rifkin was not convinced.
"They're trying to do the right thing but the law is not going to let them," Rifkin said. "You're not allowed to give it back."
The judge is expected to rule within three weeks.
The fates of horse racing "cultural icons"—Laurel Park and Pimlico, home of the Preakness Stakes—are in jeopardy if the bid is not reconsidered, Rifkin said. Maryland Jockey Club owns both racetracks.
Schlick argued that the governor-appointed Maryland State Board of Contract Appeals should rule on the issue instead of the court. He also said Laurel Racing Authority should have questioned the refund provision before the Feb. 2 deadline for slots bids.
The suit was filed on Feb. 12, the same day the bid was dismissed by the slots commission. The attorney general's office filed a motion to dismiss the case on Monday.
"If you have a problem ... file by Feb 2," Schlick said. "They didn't do that."
Rifkin deflected the charge, saying there is no time constraint for raising a constitutional question.
Laurel Racing Association, a subsidiary of Canada-based Magna Entertainment Corp., expected its bid for 3,000 slot machines at Laurel Park to challenge the 4,750-machine Arundel Mills Mall proposal by Baltimore-based Cordish Cos. for the Anne Arundel County slots license.
The state Video Lottery Facility Location Commission received six bids for the five slots licenses approved in a November referendum. Bidders were required to pay $3 million for every 500 slot machines requested.
The bidder for the Allegany County license also failed to include the licensing fees with its Rocky Gap slot parlor proposal, leaving the state with only four complete bids for fewer than half of the 15,000 terminals allowed under state law. That bidder has not filed a legal challenge.
The suit could cost the state millions of dollars if it delays the commission's ability to make final decisions on the remaining bids and might cause other applicants to drop out of the bidding, Schlick said. The commission is not expected to make any rulings for several months.
Capital News Service contributed to this report.