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Baltimore City Entertainment Group files federal lawsuit

Baltimore City Entertainment Group asked a federal court Tuesday to intervene in its long-running legal battle to derail the state’s second attempt at finding a developer to build a slots parlor in Baltimore.

BCEG’s suit, filed in the U.S. District Court, seeks an injunction to stop the bidding process for the city slots license and to force the state to amend or reissue its requirements for the casino project.

Led by Canadian homebuilder Michael Moldenhauer, BCEG alleges the call for proposals “discriminates in favor of bidders and subcontractors owned by racial minorities and women, and against bidders and subcontractors owned by white males.”

The Video Lottery Facility Location Commission and its six members were named as defendants in the suit. Chairman Donald C. Fry, who was on vacation and out of the state, wrote in an email late Tuesday afternoon that he had not yet seen the lawsuit.

The General Assembly passed an extension of minority contracting goals this year for the state’s fledgling gaming industry that set a goal of 25 percent of spending on gaming projects be directed to businesses owned by women or minorities, known as minority business enterprises, or MBEs.

Attorney General Douglas F. Gansler advised O’Malley not to sign the bill — SB 638 — into law because, he wrote, there was not sufficient evidence the minority carve-out is needed in Maryland slots procurement.

“If you choose to sign this bill, it should not be implemented unless and until a study validates the need for such a remedy and a program narrowly tailored to reflect the results of that study is enacted,” Gansler wrote.

The law took effect June 1.

Fry’s commission, in documents seeking a casino developer published in April, set its own MBE goal of 35 percent for the Baltimore project.

The BCEG suit argues the MBE requirements are misplaced in the slots industry because they cover the casino owners’ spending on construction and other development costs that are not paid for out of the state’s coffers. MBE requirements typically cover contractors’ spending of state dollars.

BCEG was the only bidder for the Baltimore license in 2009, but the slots commission threw out the bid after the group’s financing fell through and submission of a full $22.5 million license fee and final proposal were delayed.

BCEG has lost two appeals, most recently in Baltimore City Circuit Court in June, and has another one pending before the Court of Special Appeals. The federal lawsuit represents another avenue for BCEG to disrupt the process and is an indication that Moldenhauer is considering bidding on the license for a second time.