Penn National Backs Out of Rosecroft Bid

On November 29th, 2007, almost two weeks ago after Maryland legislators excluded Rosecroft Raceway from a list of locations that might receive some slot games, Penn National Gaming announced yesterday that it has dropped from their intention to buy the harness racing track in Prince George's County.

The organization, which owns the Charles Town Races and Slots in West Virginia and some gambling locations in the U.S. and Canada and announced their intention to buy the Fort Washington standard bred racing track this fall, just as Governor Martin O'Malley was beginning his bid to push the slot machines.

The organization insisted in public testimony that it was committed to the racing track for the long term, regardless of whether the slot machines will be legalized or not. But after the session ended with Rosecroft being excluded of Maryland's gaming expansion, the company decided to back out of the deal.

Officials of Prince George County have long criticized the slots plan for their community and the exclusion of slot machines at Rosecroft helped gather votes of the county's legislators for a gaming expansion. The legislature voted to put a question regarding the constitutional amendment on November 2008 vote allowing up to fifteen thousand slot machines in five different areas: Baltimore City and Allegany, Anne Arundel, Cecil and Worcester counties. That would permit slot machines at Laurel Park and Ocean Downs racing track but not at Rosecroft or Baltimore's Pimlico Race Course.

Rosecroft Chief Executive Officer Thomas Chuckas Jr. commented that with Penn National out of the bidding process, the harness racing track's owner, Cloverleaf Enterprises will continue to operation as usual. But the owners will have to take into consideration the changes in the coming years.

Sen. J. Lowell Stoltzfus, an Eastern Shore Republican who is against slot machines, tried to put down Rosecroft in the bill but commented that it was mainly to remove another horse racing track, Ocean Downs. Tom Cooke, the president of the Cloverleaf Standardbred Owners Association commented that he is disappointed that the company is backing out of the business deal. But he said that it could be a good chance for a community-based collaboration to bid for the track and take advantage of the benefits that Rosecroft will receive if the slot machines are approved.

Up to $20 million annually in slots profits would be allocated to subsidizing horse racing purses if the voters approve the gaming referendum. Even without the slot machines at Rosecroft, that still puts the horse racing track in a good position.

Jeffrey C. Hooke, a financial consultant who has reviewed the gaming industry, commented that he expects Rosecroft will survive without the slot machines and without Penn National Gaming. Hooke said that Charles Town is Penn National's most financially viable property and most of its profits come from Maryland and from the other parts of Northern Virginia that are more convenient to a possible slot machines site at Laurel.

Monday, 10 December 2007
Cindy Alfonso