Miller: Throw out the slots bids
It's not too suprising that MIke Miller, the most dedicated slot machine gambling advocate Maryland has ever known, would be pretty upset this week by the way things are going. Not only did the bidding for slots licenses bring tepid results, it looks like his long-standing allies at the Maryland Jockey Club (and corporate owner Magna Entertainment Corp.) could find themselves shut out of the action based on their largely inexplicable failure to include the licensing fee with their slots bid. His call to throw out the bids and start over has brought us back to the old familiar Mike Busch vs. Mike Miller (with Gov. O'Malley somewhere in the middle) fight that we've been seeing for years.
But a closer look at Miller's comments gives a sense of what might be going on beneath the surface. MIller is blaming Busch for including the site Magna's competitor has picked, Arundel Mills Mall, in the slots bill in the first place. But he's also blasting Magna's advisers, saying the company "needs a new set of lawyers. ... Whoever advised them to handle the matter the way they did in my opinion adversely affected their ability to obtain a license."
Magna's advisers in Maryland are from the Rifkin firm, one of the highest (if not the highest) of high-powered Annapolis lobbying firms. They simply do not bungle things like this.
(Clarification: Rifkin represents the Maryland Jockey Club, a subsidiary of Magna, and not Magna itself. Nonetheless, I suspect the fine folks at that firm may have mentioned to corporate HQ that the strategy was problematic.)
Rather, what seems more likely is that we're seeing a split between the Toronto executives at Magna and the long-standing horseracing set in Maryland, specifically Miller's closest ally in the industry, Joe DeFrancis. Miller and DeFrancis have worked hand-in-hand over the years, and DeFrancis has funneled untold thousands of dollars to Miller's various campaign funds, which have helped cement the senator's longstanding hold on power.
But DeFrancis is a polarizing figure, with many others in Annapolis blaming him for failing to keep horseracing viable as a business on its own. He and Busch, for example, aren't exactly close. DeFrancis and Magna haven't seen eye-to-eye of late either. Magna bought out DeFrancis and his sister, Karen, for $18 million in 2007 and replaced him as head of the Jockey club. Later, the company forced him off its board and replaced the well-respected Lou Raffetto as president of the jockey club.
That didn't mean DeFrancis was out of the slots business, though. Far from it. He and Karin still have a deal that would give them a large slice of any slots profits at Magna's Maryland tracks for years into the future. That's millions that Magna would have to give away to the DeFrancises without them putting up any money in return.
Prospective slots bidders who didn't have that kind of arrangement are already wary of the high tax rates and investments Maryland is requiring, given the economic climate. You could see how Magna would be ambivalent about Maryland under the circumstances. And you could also see why Miller would be upset to see his long-time partner in the slots fight shut out of the action in the end.