Cormony head Samuel Polakoff confirmed in an interview that he spoke with other developers about bowing out so the land could be used for slots rather than a "sportsplex" that included Ravens linebacker Ray Lewis as a partner. Just before the Feb. 2 slots bid deadline, Moldenhauer said, he signed an exclusive deal to negotiate with Cormony, and sealed the transaction in April with another agreement. Financial details have not been made public.
Questions over numbers
Yet despite its enhanced position, Moldenhauer's group faces skepticism over its rosy revenue forecasts from some members of the licensing commission, as well as from industry analysts. The group projects its 3,750 video lottery machines to gross $504 million the first year, yielding $337 million in state taxes and $20 million to the city.
"I want to believe these numbers," said commission member D. Bruce Poole, a former state delegate from Hagerstown, at Wednesday's hearing. "But I'm not so sure that I do."
Joseph Fath, a gaming analyst at T. Rowe Price Group, questioned some assumptions underlying the projections. Moldenhauer's partnership assumes it will make $368 per machine per day in the first year, but Fath said gaming sites in cities "never seem to pull those kinds of numbers."
Fath pointed to Philadelphia Park, a suburban slots facility that he called "well run" and that grossed $356 per machine a day this month, making it the most lucrative of Pennsylvania's 10 slots facilities. The daily average in Pennsylvania is $263.
Also, Fath doubts annual gross revenues in Baltimore would rise over five years, as projected, from $504 million to $651 million. "These things tend not to grow," he said. "They ramp quickly and they stabilize."
After years of rancorous debate, Maryland voters last fall approved a constitutional amendment authorizing 15,000 slot machines at five locations around the state. Officials hope the state will see $600 million a year in gaming, and Baltimore officials added an extra tax that could knock 8 cents off the city's property tax rate.
Nearly a year later, with the state and city budgets under extreme pressure, all slots proposals remain in the planning stages even as other states expand their gambling. Delaware moved recently to allow table games at casinos, a type of gambling not permitted in Maryland.
Moldenhauer stands by his group's Baltimore projections, which he said came from a study by Gaming Market Advisors and were examined by two other firms, including one hired by the city.
