Gambling machines inside the entrance of Arundel Mills's… (Karl Merton Ferron, Baltimore…)
Eleven years have passed since the Cordish Cos. broke ground on their first casino venture, a project with the Seminole tribe of Florida.
Since then, the Baltimore-based developer, which builds and runs urban retail and entertainment venues, has been involved with at least four other gaming sites across the country.
But after a handful of lawsuits, false starts and soured partnerships, only one property remains in the company's gambling portfolio: the Maryland Live casino, scheduled to open Wednesday at Arundel Mills mall.
The short life spans of Cordish's prior casino undertakings raise the question of how long the developer will maintain a stake in Maryland Live, especially if the company fails to stop a large gambling facility from being built in Prince George's County. Less than two years ago, when Cordish won the right to build Maryland Live, the company did not expect to have to compete against a comparable casino less than an hour to the south that could eat into its pool of gamblers and profits, analysts said.
"We obviously came into this based on the rules that were set down by the state in terms of the market areas that would be available, so we'd hope that those ground rules will continue to be the rules under which we all play," said Joe Weinberg, managing partner and president of gaming for Cordish.
Next month, the Maryland General Assembly is tentatively scheduled to decide whether a license should be granted for a 4,750-slot facility at National Harbor.
"If anything changes in the environment that we don't have control of, we'll have to look at it at that time," Weinberg said Thursday.
With a footprint the size of three average Walmart stores, the casino, entertainment and dining complex in Hanover is the first that Cordish will operate and own outright. Cordish did not have an ownership stake in any of its previous gambling ventures.
Maryland Live will be the state's largest casino when it opens Wednesday with 3,200 machines, including video slots and electronic table games. By October, the number of machines will grow to 4,750. The facility will have six restaurants and 1,500 employees. Cordish has invested $500 million in the project.
"Since 2009, you've seen a pretty strong commitment on the part of the Cordish Cos. upfront to build the biggest casino in the state," said James Karmel, a gambling analyst and associate professor of history at Harford Community College.
Cordish's long road to Maryland Live's launch presented plenty of opportunities for the company to lose interest — a competitor's lawsuit, a referendum battle and permit appeals —and it didn't, Karmel notes.
"We certainly have approached the project as a long-term hold for us," Weinberg said.
The Arundel Mills casino should prosper because of the affluence of the surrounding areas, said Brian T. McGill, managing director for casino gaming and lodging for the equity research arm of Janney Capital Markets, based in Philadelphia.
But Cordish, and both analysts, say that approving another license so soon after Maryland Live's opening could significantly cut profits for the Anne Arundel casino, which needs time to develop a customer base.
If Maryland Live fails to bring in the bucks — a foreseeable risk considering Maryland's 67 percent casino tax and the rapid saturation of the Mid-Atlantic gambling market — it would only make good sense for Cordish to cut its losses, said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
"At the end of the day, they've got to do what makes sense for them, business-wise," Schwartz said.
In 2001, around the time Cordish cut the ribbon on Power Plant Live, its Inner Harbor entertainment complex, the company began to feel the pull of gambling industry profits.
Cordish agreed to build two casinos in Tampa and Hollywood, Fla., for the Seminole tribe. Cordish also would run all nongambling operations at both, including hotels, stores and entertainment.
"As we kind of got under the tent, seeing how some of these companies operated, we felt we had a real strategic advantage in really understanding how gaming could be maximized by making it a component of an overall entertainment experience," Weinberg said.
The $455 million Florida casinos were completed in 2004. David S. Cordish, the company's chairman, called their openings "the proudest accomplishment in the 90-year history" of Cordish Cos., according to articles at the time in The Baltimore Sun.
The casinos quickly became among the most profitable in the United States, but they also drew the attention of the Internal Revenue Service. The agency questioned how the tribe structured its payments to Cordish and said the use of tax-exempt bonds to finance construction was suspect.
When the Seminoles were forced to refinance the projects with taxable bonds in 2005, the tribe moved to end its 10-year contract with Cordish.