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Tuesday, July 26, 2005

Wink and a Nod

- Magna has announced that they intend to concentrate on their “core” assets, so if you’re near one of their tracks that is not on this list, be afraid, be very afraid.

The core operations are Gulfstream Park in Florida, Santa Anita Park and Golden Gate Fields in California, Pimlico and Laurel Park in Maryland and Lone Star Park in Texas. Additional tracks that can be licensed to add slot machines because of recent changes in state laws are Remington Park in Oklahoma and The Meadows in Pennsylvania.

That leaves Portland Meadows in Oregon and Thistledown in Ohio as non-core tracks. [Toronto Globe and Mail]
And interestingly, though not surprisingly, the new $100-million (U.S.) track that Aurora, Ont.-based MEC wants to construct near Detroit was not a core asset. I imagine those in Detroit who approved that deal, which I thought was dubious from the start, must not be happy. Folks in Maryland must be relieved to see their tracks on the list, though I imagine they must be skeptical. To give you an idea of the potential profit difference between slots and non-slots tracks, consider that Magna recently sold Flamboro Downs to pay down some debt, and the company noted that the track’s profit could have increased by between $2-million and $4-million in the next two years.
Profit at Remington Park, however, could rise by between $20-million and $25-million, he said, while results at The Meadows could jump by between $50-million and $60-million. And if slot machines go into Gulfstream, profit there could rise by between $60-million and $80-million.
What’s Magna trading at now? Meanwhile, according to Vic Zast of MSNBC, the rumor mill up at Saratoga is churning, and is coming up Churchill Downs.
..rumors hang around like bats in the attic in a small town such as Saratoga Springs, and in recent weeks, the talk has been that Magna Entertainment, despite its powerful lobbying effort, is out as a potential operator [of NYRA], and Churchill Downs, flush from its sale of Hollywood Park, is the front-runner for the franchise. The fear of the town wags is that Churchill Downs, while sensitive to the ethic of tradition, is not preservationist, and more than one set of imaginary blueprints for the rumored new air-conditioned, marble-floored clubhouse casino on the first turn has cropped up in the worrisome minds of the faithful. [MSNBC]
Well, considering what Magna has done to Gulfstream, perhaps that fear is misplaced. Churchill did draw criticism of its recent renovation at its home track, with some unhappy that the twin spires are not as prominent as they once were.

- Entries will be taken today for the Hambletonian, and the eliminations will be on Saturday night. It will cost $12,500 for anyone who wants to challenge favorite Ken Warkentin.
Dreamers among the owners have to look at Ken Warkentin's last start, July 15, when he came from fifth place at the half to circle the leaders and draw away to victory with a sizzling 1:52.3 mile.

That clocking gave notice to all concerned that the Jimmy Takter trainee will be at his peak for this Saturday's elimination heats, which will determine the 10 finalists. [Newark Star-Ledger]
Classic Photo has done nothing wrong and also figures to be formidable, as well as the clear second choice. Of course, they all have to stay flat and get past the eliminations. Another contender is Southfork, who appeared to run second to Ken Warkentin in that one’s big win; but sharp-eyed observers, which does not include me, may have noticed that he switched to a pacing gait in the last 50 yards, and he was DQ’d.

- After calling just two witnesses, the prosecution in the bribery retrial of executives of Rhode Island’s Lincoln Park has rested. Two executives, Daniel Bucci and Nigel Potter, are accused of trying to bribe the then-Speaker of the state House Speaker John Harwood via payments to the track’s general counsel Daniel McKinnon, who was Harwood’s law partner. The defendants claim the proposed payments, which could have eventually reached $4 million, were merely bonuses. The state says otherwise.
At [the first] trial, Potter testified that he made about $520,000 in salary and bonuses in 2000 and Elliott made about $275,000. Prosecutors noted that the combined $800,000 in compensation to Wembley's two top executives was less than the $1 million proposed bonus to McKinnon. [Providence Journal]
The track was looking to increase the number of slot machines, as well as to block the approval of a competing casino, and the prosecution alleges that the payments were to facilitate those objectives, and presented a trail of written memos and faxes.
"I firmly believe that McKinnon's firm should be given a six figure check," Bucci wrote. "We would have gladly paid, at any time, in the last eight years, seven figures to accomplish what we have achieved."

"A wink is as good as a nod to a blind man and these people would never put their hand out," Bucci wrote. "I think we have an obligation. I think we've ignored it; and I think we may have reached a point where the extra mile is not going to be walked."
"I suggested (following your requests for recognition of McKinnon past contribution as well as further commitment) that we should pay McKinnon's law practice a 'retainer' of $500k in 2001 and 2002," Potter wrote. "If the strategy is successful and extra machines (1000+) are implemented in 2002 we would consider increasing the retainer to $1m for each of 2003/2004/2005. Similarly if no additional machines are achieved then the $500k p.a. for 2001 and 2002 would cease."[Providence Journal]
The defense starts their case today, and it was good enough for a hung jury the first time. McKinnon did not accept the payment and neither he nor Harwood have been charged.