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February 9, 2009

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.

Posted by Andy Green at 7:27 AM | | Comments (2)
        

Comments

the state would be better served issuing a slots license to cordish than to magna. cordish understands what it takes to make a business venture successful whereas magna continually shows it has no idea how to do things the right way. and to give money to joe defrancis and his sister who took over for their late father frank who built up racing so well only to have his nitwit kids run the business into the ground would be a joke.

DeFrancis AND his sister are the reason slots should NOT go to Magna. They are responsible for the racing downfall in Maryland. They were greedy and wanted to take all they could.
His father is rolling over in his grave.

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Annie Linskey covers state politics and government for The Baltimore Sun. Previously, as a City Hall reporter, she wrote about the corruption trial of Mayor Sheila Dixon and kept a close eye on city spending. Originally from Connecticut, Annie has also lived in Phnom Penh, Cambodia, where she reported on war crimes tribunals and landmines. She lives in Canton.

John Fritze has covered politics and government at the local, state and federal levels for more than a decade and is now The Baltimore Sun’s Washington correspondent. He previously wrote about Congress for USA TODAY, where he led coverage of the health care overhaul debate and the 2010 election. A native of Albany, N.Y., he currently lives in Montgomery County.

Julie Scharper covers City Hall and Baltimore politics. A native of Baltimore County, she graduated from The Johns Hopkins University in 2001 and spent two years teaching in Honduras before joining The Baltimore Sun. She has followed the Amish community of Nickel Mines, Pa., in the year after a schoolhouse massacre, reported on courts and crime in Anne Arundel County, and chronicled the unique personalities and places of Baltimore City and its surrounding counties.
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