Filling the void at Rocky Gap

Our view: Sweetening the terms for a Western Maryland casino is a smart move

March 31, 2011

Rocky Gap, the state-owned resort hotel in Western Maryland, has gorgeous views. It has a golf course designed by Jack Nicklaus. It has special deals on its restaurant meals — kids under 10 staying there eat free. What it doesn't have is an operator who wants to run a slots casino there.

So Maryland lawmakers are doing what sellers do when they are having trouble luring buyers: They are sweetening the deal. This week, the Maryland Senate passed a measure that would cut the state's take on gambling revenue from the site to 50 percent for 10 years, rather than the 67 percent that operators of other Maryland casinos pay.

The Senate deal-making did not stop there. Instead of having to build a separate casino at Rocky Gap, the proposed arrangement would allow the developer to put slot machines in the hotel. Finally, the Senate would loosen ownership restrictions so that an operator who already has one casino in the state could also run Rocky Gap. A twofer, you might say.

The House has yet to take up the matter, but lawmakers there also appear inclined to offer some incentives to a prospective Rocky Gap operator, though perhaps not as many as the Senate would. House leaders have some unease about the duration of the rate cut and the prospect of having one owner being able to operate two facilities.

One solution to the length of the rate cut that has been floated in the House is to make the last five years of the 10-year cut conditional. The idea would be that the discounted rate would stay in effect only if the average winnings at Rocky Gap did not exceed those at other sites in the state. This seems reasonable. As for the twofer part of the deal, it should stay. Although we are generally reluctant to allow one entity to own multiple slots licenses, it makes sense here. Given the utter lack of interest in Rocky Gap so far, we need to do whatever possible to attract bidders. Furthermore, changing the terms of the deal on one slots site is somewhat unfair to those who already bid on and secured licenses for others; allowing them the chance to bid on Rocky Gap as well would solve the problem.

Ever since Rocky Gap opened 12 years ago, it has had trouble drawing customers and making ends meet. A pet project of Allegany County's Casper R. "Cas" Taylor Jr., then the speaker of the House of Delegates, the resort was supposed to draw throngs of tourists and help ease Western Maryland's steep unemployment problem. The crowds have not come — the resort, near Cumberland, is about 130 miles from Baltimore and Washington — and the resort has reportedly been losing money.

It's not altogether clear, even with the modifications the Senate approved, that Rocky Gap is a great deal. If Rocky Gap was inherently a prime location as a mass tourist destination, it wouldn't be struggling as much as it is. In an email exchange with The Sun this week, David Cordish, who is building the state's largest slots parlor at Arundel Mills Mall, said he might be interested in the site under the Senate's terms, but he said he looked on the idea as a "public service" project, not a money-maker.

That may be a bit of an exaggeration, but there's some truth to it. Maryland's other slots sites were selected to maximize revenue for the state. They are near major population centers, a thriving tourist destination and on the route Marylanders are already taking to play the slots in Delaware. But Rocky Gap made the list in hopes that slots would redeem the state's earlier investment in a resort that shows no signs otherwise of becoming profitable.

Part of the reason for that is that Rocky Gap represents something of a mismatch. Western Maryland's chief draw has traditionally been among outdoor types — people in search of their inner Thoreau — not those looking for a luxury resort. The House and Senate should be able to work out their differences and come up with a deal that invites robust bidding for the casino, one that will eventually draw gamblers, inveterate indoors types, to Western Maryland.

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