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May 07, 2010

Penn National joins MID in Maryland Jockey Club


Wyomissing, PA (Sports Network) - Penn National Gaming and MI Development (MID) announced Friday morning the establishment of a joint venture to own and operate the Maryland Jockey Club.

The Maryland Jockey Club conducts thoroughbred racing at Pimlico Race Course and Laurel Park, and maintains Bowie Race Course as a training facility. The announcement comes just eight days before the running of the $1 million Preakness Stakes at Pimlico.

"Our involvement in Pimlico, home to one of thoroughbred racing's crown jewels, the Preakness Stakes, and Laurel Park, is consistent with Penn National's strategy of expanding and diversifying our portfolio of pari-mutuel operations and presence in key markets," Peter M. Carlino, chief executive officer of Penn National, said. "We look forward to working with MI Developments on the redevelopment of surplus real estate assets at the Maryland Jockey Club, as well as collaborating with the local horsemen and community members and leaders in Baltimore and Laurel to support their efforts to continue delivering a high-quality racing experience at these two historic racing venues."

The future of thoroughbred racing in Maryland has been under question since Magna Entertainment declared bankruptcy last year. Magna, a subsidiary of MID, operated the Maryland Jockey Club.

"This transaction is consistent with our plan to enhance the returns of our racing and real estate assets and pursue other opportunities, including the potential for gaming, to benefit the value of the Maryland Jockey Club," said Dennis Mills, MID's vice chairman and chief executive officer. "Penn National is a strong partner with complementary pari-mutuel, real estate and gaming industry expertise as well as a strong financial position. We look forward to working with Penn National, the racing industry and local regulators to develop business models that will ensure the ongoing success of these high quality assets."

The transaction must be approved by the Maryland Racing Commission while other customary closing conditions must also be satisfied.

Just last week Maryland Governor Martin O'Malley, Attorney General Doug Gansler, Baltimore City Mayor Stephanie Rawlings-Blake and Tom Chuckas, President and COO of the Maryland Jockey Club, announced a settlement agreement that ensures the Preakness will remain in Maryland.

Under that agreement Maryland waives its statutory right of first refusal to buy the Preakness Stakes and parent company MID agrees that it will not move the Preakness from Maryland. The agreement also specifically states:

MID agrees that the Preakness Covenant will be binding on MID's successors and assigns; The State of Maryland and MID agree that any disputes about the agreement, including a dispute about the Preakness Covenant, will be decided in a Maryland court; The parties acknowledge that money damages would not be a sufficient remedy for breach of the Preakness Covenant, and agree that Maryland is entitled to specific performance and injunctive or other equitable relief as a remedy for a breach of the Preakness Covenant; and Nothing in the Agreement alters or negates the State's statutory, police, or regulatory power.

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