MID Reports Loss in Advance of Key Meeting

MI Developments reported a loss of $76.68 million on racing and gaming in 2010.

MI Developments reported its racing and gaming business lost $76.68 million in 2010, with a loss of $47.29 million for the fourth quarter of last year, the company reported March 10.

MID obtained the racing and gaming assets in the spring of 2010 from Magna Entertainment Corp., which had filed for bankruptcy. MID primarily is a real estate company that served as parent company of MEC; both were controlled by Frank Stronach.

MID shareholders will meet March 29 in Toronto, Canada, to vote on eliminating the “dual-class share structure” of MID in exchange for Stronach personally taking over the racing and gaming assets, which include Golden Gate Fields and Santa Anita Park in California; Gulfstream Park, the Palm Meadows Training Center, and a development surrounding Gulfstream in Florida; the Maryland Jockey Club properties of Laurel Park, Pimlico Race Course, and the Bowie Training Center; Portland Meadows in Oregon; the XpressBet.com advance deposit wagering system; and AmTote.

Stronach has hired Greg Avioli, who is leaving Breeders’ Cup as chief executive officer, to oversee MID's racing and gaming assets effective the first week in April.

MID in its earnings report said the 2010 figures begin April 30, when it took over the transferred MEC assets.

“The net loss from our core business during 2010 was also attributable to the national trend of declining pari-mutuel wagering activity,” the earnings report said.

In May 2010 MID entered into a joint venture with Penn National Gaming Inc. whereby PNGI acquired 49% of the MJC’s racing operations and 51% of its Maryland real estate and gaming venture (called Laurel Gaming LLC). Under the agreement, MID manages the racing assets, and PNGI would manage the gaming assets.

With Laurel seemingly out of the running for a slot machine license, PNGI is working with MID to terminate the agreement. According to MID, PNGI paid $23.3 million to enter the joint venture.