Panel urges slot changes for Maryland 

Posted: 7:00 pm Sun, February 21, 2010
By Robbie Whelan
Daily Record Business Writer

The commission set up by Maryland to award slot machine gambling licenses is urging state lawmakers to consider making substantial  statutory changes in the state’s gaming laws to generate more revenues.

In a Feb. 11 letter from Video Lottery Facility Location Commission Chairman Donald C. Fry to Sen. President Thomas V. “Mike” Miller, House Speaker Michael E. Busch and Gov. Martin O’Malley, the commission endorsed a change in state law that would allow individual owners to hold stakes in more than one Maryland casino, and outlined a series of proposed changes to the requirements for a slots license at Rocky Gap State Park in Allegany County.

“While the state was very fortunate to receive proposals from several financially viable companies for the licenses awarded to date, the general economic downturn has significantly impacted the financial condition of gaming companies,” the letter said. “In light of the current economic situation of many gambling companies … the General Assembly may wish to review the statute prohibiting a business entity from holding more than one license. … These changes could provide additional flexibility for the receipt of proposals for the Baltimore City and Allegany County locations.”

The letter also addressed the possibility of redefining “ownership” in one of the casinos as holding a 5 percent stake, rather than the current 10 percent. This change would allow the state to conduct more thorough background investigations of the parties interested in bidding to run the state’s casinos, the commission said.

Another change would allow the commission to waive its requirement that institutional investors in the casino projects provide filings detailing their financials.

Maryland voters approved the issue of slots gambling licenses at five locations across the state in a 2008 referendum. Since then, the state has hit multiple hurdles in trying to get the 15,000 slot machines up and running and the much-needed revenue they would produce.

Only three of the five sites have been licensed, and the slots committee said the earliest the state can expect to see a casino open is this fall. Rocky Gap, in Allegany County, did not receive any bids, and a partnership bidding on the Baltimore City site was rejected last month after it failed to come up with additional licensing fees for the larger casino it wanted to build.

Maryland’s slots took another blow on Feb. 4, when a coalition against the development of a facility at Arundel Mills filed a petition of nearly 24,000 signatures. The petition calls for a referendum that would allow voters to decide whether to allow slots near the mall, which is one of the state’s three licensed sites.

The commission briefly touched on the issue of allowing Vegas-style table games at Maryland gambling facilities, a proposal that has gained traction in recent weeks after bills to legalize table games were introduced both in the House of Delegates and the State Senate.

The bills come as Delaware, Pennsylvania and West Virginia work to establish recently approved table games.

O’Malley and Busch have been opposed to focusing on table games when the state has yet to see a slots casino open. In contrast, Miller has been a vocal advocate of adding gaming to generate revenue.

“We need to move forward,” Miller said this month. “Slots should have been up and running by now.”

In the Feb. 11 letter, the commission also took up the recommendations first voiced by a group of state delegates from Western Maryland at a Jan. 22 slots commission meeting, which call for the state to require the bidder on the casino license to purchase Rocky Gap Lodge, a state-owned facility near the West Virginia border. Another proposed change would allow slots temporarily at the lodge, should a bidder want to operate a casino there while a larger facility is being built.

The Western Maryland delegation also urged the state to adopt a less stringent revenue-sharing agreement at Rocky Gap. Under the current law, casino operators must pay the state 67 percent of gross gaming revenues, but lawmakers asked that that contribution be cut in half.

Fry rejected this suggestion.

“While the commission does not suggest a change in the operator share of the revenues at this time, a statutory change allowing VLT’s in the lodge temporarily until a permanent facility is constructed would provide an additional incentive to an applicant for a Rocky Gap license,” he wrote.

A spokeswoman for Busch, the Speaker of the House, said Friday that he trusted the recommendations of the slots commission as an “arms-length commission that has the appropriate expertise” to decide the issues.

“Given the fact that there wasn’t a responsive bid for Rocky Gap, the Legislature is open to changes,” she said.

Capital News Service contributed to this article.