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Magna Files for Bankruptcy

The saga of Maryland’s slot machines just got a little more torrid, and the terminals have not even been installed yet! The parent company of one of the sites earmarked for having slot games installed has just filed for bankruptcy. Magna Entertainment Corp. of Canada owns the Laurel Park Racetrack, a sagging horseracing establishment. Magna filed a Chapter 13 bankruptcy petition yesterday, citing the need for “comprehensive financial restructuring.” The company’s assets are worth just about one billion dollars, and it owes some nine hundred fifty-nine million dollars to as many as thirty thousand creditors.

Magna CEO and chairman Frank Stronach blamed the wide-reaching American recession, the worldwide credit crunch, and the decline of the state and national housing markets as reasons why the company was in such dire straits. Stronach stated that MEC has “far too much debt and interest expense.” Now, many are wondering if the bankruptcy filing might have signed the death knell for the idea of bringing slot machines to Laurel Park.

Magna was the sole bidder for the contract to install slot machines at Laurel Park. Its proposal was shot down by a committee of the Maryland Gaming Commission because Magna did not submit a twenty-eight million dollar fee for its bid. Magna is suing the state, calling the bidding process unconstitutional. Stronach assured patrons that Laurel Park would remain open for “business as usual” during the proceedings, and refused to rule out the future possibility of bringing slot game terminals to the horseracing track.

Back to March 2009 Archive.