Others up ante as Md. slots idle
Delays mire local casino projects, as nearby states look to expand gambling
As neighboring states move to expand gambling, Maryland slot-machine projects are mired in financial and political uncertainty and only one casino development is on schedule. (Baltimore Sun photo by Jed Kirschbaum / October 8, 2009)
In West Virginia, Charles Town Races and Slots just 75 miles west of Baltimore plans to offer poker, roulette and other table games as early as the summer after winning voter approval this month.
In Pennsylvania, Gov. Edward G. Rendell pushed state lawmakers last week to speed approval of table games, warning that if they did not expand casino gambling, more state workers could be laid off.
But in Maryland, only one casino development is on schedule a year after bidding for five available slots licenses began.
Proposed slots emporiums in Baltimore and Anne Arundel County, which were expected to be the biggest moneymakers, are mired in financial and political uncertainty. And a slots casino near Ocean City has been delayed indefinitely by asbestos and structural problems.
The setbacks have implications not only for gamblers but for the strapped state budget and promised economic development around the planned casinos. Further delays in the projects in Baltimore and Anne Arundel could prompt a state slots commission to reject license applicants or to revoke those already granted and reopen bidding for those locations.
Frustration has grown, prompting some to call for a fix by the General Assembly, which debated slots for years before approving a plan in 2007, long after gambling in neighboring states was solidly entrenched.
Maryland's Senate president, Thomas V. Mike Miller, a longtime slots proponent, said he wants to hear from the slots commission about ways to draw casino developers to Rocky Gap State Park, an approved slots venue for which no qualified bidder arose. Miller also raised the possibility of asking voters in 2010 to approve a new slots site in Prince George's County at the National Harbor, Rosecroft Raceway or an equestrian center in Upper Marlboro.
"Something has to happen other than inaction," said Miller, a Prince George's County Democrat.
The snags in Maryland come as gambling venues have spread along the East Coast, providing a combined $2 billion last year for state coffers in Pennsylvania, Delaware, West Virginia and New Jersey.
The number of slot machines in the region at places that include Atlantic City, horse tracks and Indian reservations has nearly doubled, to about 114,000, in the past eight years, said William R. Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.
But in some states, gambling proceeds have been slipping, so many places are legalizing table games as a way to bring in more revenue. In West Virginia, voters in Jefferson County approved a referendum allowing the new games alongside 5,000 slot machines at Charles Town. Table games might soon appear in Pennsylvania as well as Delaware, where the state Legislature has authorized them at racinos but hasn't worked out specifics.
Maryland voters approved slots gambling at five locations in November 2008 after boosters said the facilities would generate $600 million in tax revenue to benefit education as well as funding for the horse-racing industry. The money is needed more than ever, as state officials look to close an expected $2 billion shortfall between spending and revenue for the budget they must adopt next April.
Four of those sites drew qualified bidders, and since then, those developers have touted their casino plans as economic engines and creators of jobs.
But the developers have run into snags.
Last week, the Cordish Cos., a Baltimore developer that wants to build an emporium with 4,750 slots at Arundel Mills mall, secured a state license but not the necessary local zoning. The Anne Arundel County Council met Monday night but did not vote because too few members were available - the latest of several postponements.
And the Baltimore City Entertainment Group, which is seeking to build a casino with 3,750 slot machines near the downtown stadiums, did not produce updated plans on Thursday, as the group had indicated to the slots commission that it would do. Neither did the group pay $19.5 million in required licensing fees.
The Baltimore group, headed by Canadian developer Michael Moldenhauer, has promised for months to reveal a mystery investor. The group indicated last week that it is in advanced negotiations with an investor, but Moldenhauer declined to say who. The group has paid an initial $3 million in fees for 500 machines, but such a small venue is likely to be rejected by city officials who want enough revenue to significantly reduce property taxes.
William M. Rickman, who owns the Ocean Downs racetrack, has been awarded a state license to put 800 slots at the Eastern Shore facility. But in a letter this month, he told the slots commission that a projected Memorial Day opening would be pushed back for an undetermined amount of time because of "unexpected" conditions.
Workers have found "serious corrosion" in the grandstand, a steel structure that dates to 1948, complicating a planned renovation, according to Rickman. He also wrote that workers have found "substantial asbestos," which caused them to halt demolition in part of the project and that they are waiting for the State Highway Administration to approve a traffic study.
The only Maryland slots parlor on track is in Cecil County, where Penn National Gaming Inc. plans to open a casino with 1,500 machines in Perryville in late October. Penn National, which also owns Charles Town Races and Slots, has begun work on the foundation.
Officials hope to have a new round of bidding for a license at Rocky Gap in Allegany County, where the state owns a struggling resort hotel. A bidder in the first round in February was disqualified for failing to pay licensing fees.
But it is unclear whether state lawmakers would change the terms to draw more interest, and whether other sites could be rebid. A tepid response in the first round was blamed by some on the recession, which made it difficult to raise capital, and by others on restrictive terms that required major capital investment and imposed one of the highest tax rates in the nation.
House Speaker Michael E. Busch, an Anne Arundel Democrat, said it is "highly doubtful" that the Assembly will make changes to the slots program in the three-month session that begins in January. He said that delays have been minimal.
Donald C. Fry, chairman of the slots commission, said the panel plans to discuss possible recommendations to the legislature but has not made any decisions. He said the group is unlikely to address the tax split. Four bidders submitted proposals at that rate, he said.
Commission member Robert R. Neall, a former state senator and Anne Arundel county executive, said the group might recommend lowering the required capital investment at the Rocky Gap facility. Developers are now expected to spend $25 million for every 500 slot machines.
Neall noted that the state might get better proposals in Baltimore if the site is rebid in this improved economic climate. But he said it is difficult to determine when to toss out a bid and move on. "It's really uncharted territory," he said.
Baltimore Sun reporter Julie Bykowicz contributed to this article.