The financial health of Magna Entertainment Corp. could become part of the debate about legalizing slot machines in Maryland, as supporters and detractors ready for a statewide referendum in November.
MEC, owner of Laurel Park and Pimlico Race Course, posted a fourth-quarter loss of nearly $43 million, dropping its shares to 50 cents in the past two weeks and prompting notification from NASDAQ that it could be delisted from the exchange if it doesn’t get its shares up to $1 by August.
Racing officials have been monitoring MEC because the company could be in line for a lucrative license if voters legalize slots. Laurel has been mentioned as a probable location for slots.
The Maryland Racing Commission has asked MEC to detail its finances at a meeting the week of March 16.
“I think if they’re in financial disarray, it would be difficult to put Magna in,” racing commission chairman John Franzone told the Baltimore Daily Record.
Slots opponents said MEC’s woes could figure in their campaign. “We’re certainly going to point that out—that we’re giving this lucrative thing to that kind of company if it’s passed,” said W. Minor Carter, a lobbyist for Stop Slots Maryland Now.
However, Frederick Puddester, a former budget secretary whom Gov. Martin O’Malley appointed to chair pro-slots group For Maryland, For Our Future, said MEC’s financial status is not the issue.
“From my perspective, this referendum is less about the racetracks and who operates them,” Puddester said. “This is more about education. I don’t see any other way to generate $70 million to $80 million to fund the state budget (other than increasing taxes).”