Magna's slots bid: Where's Joe DeFrancis?
As the slots bid by the biggest horse racing interest in Maryland crumbled last week, one key player in the last decade's fight over expanded gambling was noticeably absent: Joe DeFrancis. The former owner of Laurel Park and Pimlico and the former head of the Maryland Jockey Club, was for years the face of the slots fight here. But he has been slowly pushed out of the racing industry over the last several years by Magna Entertainment Corp., which bought the tracks seven years ago.
But apparently Magna couldn't push him out entirely. He secured a deal with Magna that guaranteed him a hefty percentage of the proceeds from any slots at the tracks for years without requiring him to put up any of the required investment in return. Gadi Dechter and Laura Smitherman reported Sunday:
According to people familiar with the situation, Magna continued to negotiate to the 11th hour with DeFrancis, a contentious figure in Annapolis who secured a hefty cut of any eventual proceeds when he sold his stake in the Maryland Jockey Club, owner of Pimlico and Laurel.
DeFrancis hails from a storied family in the horse racing industry and has been a major player in Annapolis on the slots issue. As the debate was heating up in 2002 and 2003, he contributed $225,000 to a national group, the Democratic Legislative Campaign Committee, controlled by Senate President Thomas V. Mike Miller, an aggressive slots proponent.
Maryland's slots legislation imposes one of the highest tax rates in the country. So if Magna could not renegotiate DeFrancis' share of slots proceeds, the company would be left with a slim profit margin - if any. "It's common knowledge that that agreement needed to be reworked; it was a significant impediment," Foreman said, adding that Magna Chairman Frank "Stronach wasn't going to do a deal that made DeFrancis a rich man and left nothing for him."
So after all these years, what does DeFrancis have to say? A deal that gives him and his sister a big chunk of the slots proceeds, as if it's the family's birthright, seems now like a pretty dumb thing for Magna to agree to. On the other hand, the fact that DeFrancis hung onto it to the end may well mean he gets nothing -- and the tracks that were his family's legacy could well be shut out of the gambling expansion that he's pitched as their savior for years.