By Lisa Rein
Washington Post Staff Writer
Thursday, November 29, 2007; B01
Penn National Gaming, the Pennsylvania-based casino operator, yesterday pulled out of a deal to buy Rosecroft Raceway in Prince George's County, citing the track's exclusion from legislation authorizing a referendum on slot machine gambling in Maryland.
A spokesman said Penn National faced an "uneven playing field" that would have siphoned Rosecroft customers to racetracks at Laurel and Ocean Downs, which could get thousands of slot machines under the bill approved last week by the General Assembly.
"The door was completely closed to us," said Eric Schippers, Penn National's vice president of public affairs. "We never imagined the state would have created a situation where you had haves and have-nots."
Penn National is one of the country's largest gaming companies, with 19 casino-style operations and racetracks in the United States and Canada, including Charles Town Races & Slots in West Virginia.
The deal's collapse leaves in doubt the future of the long-struggling harness racetrack, which has lost business to tracks in neighboring states where slots have fueled higher purses. But Rosecroft's owner pledged yesterday to continue the Fort Washington track's curtailed schedule of 84 live racing days a year as it seeks another buyer.
"Business and racing are down," said Thomas Chuckas Jr., chief executive of Cloverleaf Enterprises. "But we're not talking about closing our doors."
Chuckas said Penn National officials made it clear when they signed a binding letter of intent last summer and put down $1 million that their acquisition of Rosecroft was not contingent on slots.
"They made a commitment to the horsemen, the Maryland Racing Commission and elected officials to proceed with or without gaming," he said. "This is unwinding everything."
Penn National had lobbied hard during the recent three-week special legislative session for a piece of the slots measure, which authorizes a referendum next November on legalizing 15,000 machines in Baltimore and Allegany, Anne Arundel, Cecil and Worcester counties. Schippers said the company had hoped Rosecroft would be included with Laurel in Anne Arundel and Ocean Downs in Worcester, the only racetracks eligible for slots licenses under the bill.
"The governor originally campaigned on slots at the racetracks," Schippers said of Gov. Martin O'Malley (D). He said lobbyists for Penn National "tried to educate legislators as to what this could mean for Prince George's County and the state" but found few receptive. Schippers said Penn National would have generated $42 million in taxes for Prince George's alone if Rosecroft had slots.
The company faced persistent opposition to slots in Prince George's. "When we met with them, we made our position pretty clear," said Del. Jay Walker (D-Prince George's), whose district includes Rosecroft. "We were not for any type of gaming at Rosecroft."
Complicating the political situation for Penn National was Rosecroft's proximity to National Harbor, the massive development rising along the Potomac River. National Harbor developers have objected to slots at Rosecroft.
Rosecroft would not lose out entirely if the referendum passes next year. The track would share up to $100 million in projected gambling revenue for racing purses, split between harness and thoroughbred tracks. The bill also includes millions of dollars for improvements to Rosecroft and the Pimlico track in Baltimore and to the surrounding neighborhoods.
Schippers would not rule out a possible bid by Penn National for one of the off-track sites in Maryland if the referendum is successful. "We're exploring our options," he said.