Slots hopefuls preparing for new bids

Baltimore to be rebid; others want new sites at horse tracks

  • The dome atop the state capital building in Annapolis.
The dome atop the state capital building in Annapolis. (Lloyd Fox, Baltimore Sun )
January 10, 2011|By Julie Bykowicz, The Baltimore Sun

With casinos in Cecil County and on the Eastern Shore up and running, investors are lining up for a chance at potentially lucrative slots licenses in Baltimore and beyond.

At least two groups, one from Canada and another headed by a local attorney, have hired Annapolis lobbyists in preparation for the state's reissuing bids for the parlor planned near Baltimore's sports stadiums, a review of state records shows. With an authorized 4,750 slots terminals, the casino would be one of the state's two largest.

Meanwhile, the operators of Laurel Park and two groups that have bid on the bankrupt Rosecroft Raceway in Prince George's County have their own well-established lobbyists in place to try to persuade state lawmakers and Gov. Martin O'Malley to add new gambling sites to the five locations approved for slot machines in 2008.

Any gaming expansion would require not only legislative backing, but also the endorsement of Maryland voters.

Ultimately, legislative analysts say, slots will bring the state $600 million in new revenue annually. But while the Hollywood Casino Perryville opened last fall, and slot machines at Ocean Downs race track on the Eastern Shore came on line last week, the largest facilities, including the Baltimore casino, have yet to open.

States such as Delaware, meanwhile, have upped the ante by adding table games to their operations.

"Neighboring states have since changed," said Donald C. Fry, chairman of the state slots commission. "If the legislature and elected leaders want to receive the type of revenues they had hoped for when they passed the law, having competitive locations and competitive products is essential. This is a relatively new industry for Maryland. We're going to need to make adjustments along the way."

The slots commission, which meets Tuesday, is expected to make recommendations to lawmakers about ways to stoke interest in Rocky Gap, the Western Maryland site that has yet to attract any bids. The commission also will get an update from the Cordish Cos. on plans to open a temporary casino at Arundel Mills Mall by the end of the year — one that would be bigger than either of the two now open.

Senate President Thomas V. Mike Miller, a Democrat who has long supported slots, said he is particularly concerned about the fate of the Baltimore casino and the city's efforts to attract a qualified bidder. The state's first attempt to issue a license collapsed when the only applicant, the Baltimore City Entertainment Group, failed to pay the necessary fees and submit a plan for the large-scale casino that city and state officials have in mind.

The group, headed by Canadian developer Michael Moldenhauer, appealed the dismissal of its contract, but a state board rejected that argument. Moldenhauer then sued the city, claiming it had unlawfully terminated the land deal for the casino.

The city has filed a motion for summary judgment of the lawsuit, a request for a quick resolution so officials may entertain new suitors for the land. A Baltimore City judge heard arguments last month on the motion and is expected to issue a decision in coming weeks.

The state slots commission will be briefed Tuesday on the status of the city lawsuit and efforts to craft a new proposal.

"I hope the mayor of Baltimore demands immediate action," Miller said in a recent interview. "Nothing positive has happened in the past several years. They need to move forward post-haste."

Miller questioned whether the city's many extra requirements on the original bid, including a profit-sharing fee designated to help reduce residential property tax, have scared away would-be casino developers.

"The city needs to take greed out of the equation and accept compromise," he said.

Baltimore Mayor Stephanie Rawlings-Blake supports the casino project. A spokesman for the mayor said the city is moving as swiftly as it responsibly can.

"There were delays as a result of a failed bidder who has been extremely litigious," spokesman Ryan O'Doherty said. "The city has been very aggressive despite these burdensome legal challenges meant to delay the state and the city from moving the project forward."

The Baltimore Development Corporation, which is leading the city's casino effort, has been working with an independent consultant to update revenue projections, given that developer David Cordish is building a 4,750-machine casino less than 15 miles away.

That research, O'Doherty said, will help the city decide what it can reasonably expect in the way of ground rent or profit-sharing from the casino. Before the state rejected Moldenhauer's bid for the Baltimore license, the city negotiated a deal with his group that was projected to net about $20.8 million in ground rent, property taxes and other revenue the year the casino opened. The city anticipated netting a similar amount each year.

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