Potential slots operators have expressed concern that Maryland would not have enough money for first-class terminals.
The General Assembly, in rules governing the program, set aside 2 percent of slots proceeds to cover operating costs, including machine procurement. Seeking greater regulatory control, lawmakers directed that state lottery officials obtain the slots machines and run the central computer for the five authorized slots sites.
The law dictates that any other money for operations would come from the state budget. Analysts estimate that total operating costs when the casinos are fully functional would be $65 million a year, while 2 percent of the proceeds would generate only $27 million.
Donald C. Fry, chairman of the Maryland slots commission, said officials had to work to convince operators that the state will choose machines wisely. Many states, including Indiana, allow operators to purchase their own machines.
"Obviously, with our setup in Maryland, the operators had concerns they may not get the best machines or that the leases would be too long as to make it difficult to get fresh ones," Fry said.
He said operators "wanted assurances that Maryland is going to expend the necessary funds" to get top-notch machines, adding that the state has allayed those fears. "They all seem very satisfied that we're on the same page," Fry said.
Executives with the largest proposed casinos - in Anne Arundel County and Baltimore, which both face significant hurdles in gaining approval - said they are confident the state will acquire top-level machines. They also say there are advantages to having the state, rather than operators, doing the buying.
Paul Micucci, a principal in the Baltimore City Entertainment Group, which plans a 3,750-machine facility near the city's sports stadiums, said Maryland has purchasing power that individual operators would not.
Joseph Weinberg of the Cordish Cos., which wants to build a 4,750-terminal site near Arundel Mills mall, said the state seems to be "approaching procurement in a very intelligent, methodical way."
Maryland's lottery director, Buddy W. Roogow, said the request for bids will be broad, giving manufacturers the ability to sell or lease to the state, which will then distribute machines to licensed operators.
How Maryland will pay for the machines in the first few years has yet to be determined. The state could defer payment until the machines start generating money, some industry experts say.
