3 bids entered for Prince George's casino site

Penn National, Greenwood Racing join MGM in seeking rights

May 10, 2013|By Tricia Bishop, Baltimore Sun

Two more bidders emerged Friday — one a surprise — to compete against MGM Resorts International for the right to build a casino in Prince George's County, which stands with the state to reap millions of dollars from the project.

Penn National Gaming, which operates the Hollywood Casino brand, and Greenwood Racing Inc., which owns Pennsylvania's most successful casino, submitted proposals to Maryland's gaming agency by the 2 p.m. deadline.

The winner is expected to be chosen by the end of the year by the Maryland Video Lottery Facility Location Commission, which will review the proposals. The new casino near the nation's capital would be licensed to open in 2016.

Penn National, which had revealed its plans to bid in an earlier regulatory filing, wants to build a $700 million project to revitalize its aging Rosecroft Raceway harness track in Fort Washington. Greenwood Racing, whose interest became public Friday, proposed an $800 million casino and resort a few miles away on Indian Head Highway.

"It's a little bit of a surprise, but not that surprising," said James Karmel, a gambling analyst and associate professor of history at Harford Community College. "There's such lucrative potential with the Prince George's County casino. It's set up to really be a tremendous revenue producer and profitable for whatever company ends up with the site."

MGM National Harbor dropped off its proposal Thursday for an expected $800 million project to be built beside the Capital Beltway at National Harbor.

All three proposals feature a resort design, with a hotel and spa complementing the casino, and promise to create thousands of jobs.

MGM said it would build a casino on a par with its Las Vegas properties — the MGM Grand, Bellagio, Mandalay Bay and The Mirage — on 20 acres near National Harbor, the waterfront conference center complex on the Potomac River. It would have 140 table games and 3,600 video lottery terminals, or slot machines.

Penn National would offer 500 slot machines at its Hollywood Casino and Resort, which would include an event center along with a poker room and 140 tables. Penn's initial license fee was a fraction of the other two because it plans fewer video lottery terminals: $3 million compared with $21.6 million for MGM and $28.5 million for Greenwood.

Greenwood Racing's Maryland Casino LLC proposed 4,750 slots and 170 gaming tables at a Parx Casino Hotel & Spa, named after its popular Bensalem, Pa., facility just north of Philadelphia.

MGM, which has the support of Prince George's County Executive Rushern L. Baker III, has long been considered the favorite. But Greenwood Chairman Bob Green said his company plans to make a fight of it.

"We expect to win. You don't write checks for $28.5 million on the basis that you're going to lose," Green said. "I think we stack up very well. We are a major operator of gaming on the East Coast, we have a very successful record in operating in a high-tax environment, which takes a very special skill set, and we've proven that with what we've accomplished in the past in Pennsylvania." Greenwood is the state's No. 1 gaming operator in gross revenue.

At stake is hundreds of millions of dollars for the bidding companies and thousands of jobs and tax revenue for Prince George's and Maryland.

The county executive has been vocal in his support of MGM, Baker spokesman Scott Peterson said. "He wants a destination resort at National Harbor, but we also understand that this process is with the state."

The lottery commission is concerned chiefly with the marketability plan of the applicants, Karmel said, "how effective the casino thinks it's going to be making money for itself and for the state."

Other factors include minority hiring and business contracts, traffic impact, job development and how well each company can follow through.

The deal for a Baltimore casino with Canadian-led Baltimore City Entertainment Group fell apart after the project was denied a state slots license in 2011. An appeals court deemed the company "an unsatisfactory bidder," noting a "series of delays and unfulfilled promises."

Las Vegas giant Caesars Entertainment Corp. ultimately won the bid for the casino on Russell Street, where construction recently began. The facility is expected to open next year.

The casinos in Prince George's County and Baltimore are expected to bite into revenue at the Maryland Live Casino in Hanover, which began offering table games last month, Karmel said. But the head start should mitigate the damage.

"Maryland Live is proactive, I think, by way of a pretty strong start to their casino beginning last year and now with the introduction of table games," Karmel said. "They're now effectively building a customer base to try to retain that business."

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