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Panel urges fiscal sweeteners to get casino at Rocky Gap

ANNAPOLIS – The state slots commission urged lawmakers Tuesday to loosen restrictions on the Western Maryland gaming license to spur development of a casino there as the General Assembly opens its 2011 session Wednesday facing a $1.6 billion budget deficit.

The Video Lottery Facility Location Commission’s proposals include allowing gaming firms to own the Rocky Gap Lodge & Resort license in addition to another in the state and waiving up to $3 million in licensing fees.

Other proposed legislative changes would allow slot machines in the lodge permanently, require the casino developer to buy the struggling resort and expand the conference space and ease the requirement to invest $25 million in the property.

“The additional construction of a separate facility adjacent or adjoining the lodge was somewhat of a cost-prohibitive factor,” said commission Chairman Donald C. Fry.

Fry said he and the commission “hope” the owners of casinos in Cecil and Worcester counties and the developer of another casino under construction in Anne Arundel County are interested in taking on the Western Maryland project.

The state did not receive bids for the Rocky Gap twice before, first in February 2009 and again in November 2010. After the first failed attempt, lawmakers attempted to sweeten the pot, lowering the tax rate on gaming revenues at Rocky Gap from 67 percent to 64.5 percent for five years if the license holder also agreed to buy the resort.

This change was estimated to be worth as much as $500,000 a year. A provision would have also allowed the casino developer to set up slot machines in a temporary facility during renovation.

Hoping to find ways to make the license more appealing, Fry and other members of the commission met in the fall with gaming companies that expressed interest in the license but did not submit bids.

The commission did not suggest legislative action to address the Baltimore city license, which is tangled in a legal tussle between the state and Baltimore City Entertainment Group, with a hearing in Baltimore City Circuit Court not likely to take place before late May.

“It’s just a matter of us getting through the legal process before we can proceed” with finding a new developer, Fry said.

The commission will, however, stress the changing mid-Atlantic gambling landscape in its report to lawmakers, who return for the legislative session Wednesday. West Virginia, Delaware and Pennsylvania casinos have all added table games since slots approved by the General Assembly in 2007.

“There’s a threat the state is not going to see the full amount of money it had expected,” Fry said.

The commission will also recommend reviewing other Maryland gaming rules that put casinos at a disadvantage, such as a provision that allows Ocean Downs only a single piano player for entertainment.

The recommendations by the slot commission come as the lawmakers head back to Annapolis to bridge the yawning budget deficit without the aid of federal stimulus dollars that they relied on the last two years.

The painful trimming to be done and years of austerity ahead were the themes of a Democratic pep rally Tuesday.

There, Gov. Martin O’Malley reiterated his pledge to bridge the deficit with cuts rather than tax hikes. He did not, however, say he would oppose tax increases introduced by lawmakers.

“I think all of us need to keep an open mind,” he said.

House Speaker Michael E. Busch, D-Anne Arundel, predicted the four-year term would be more challenging than the one that preceded it.

“We’re going to be doing things we haven’t done before. We’re not going to be living high on the hog,” said Senate President Thomas V. Mike Miller Jr., D-Prince George’s and Calvert. “We’re not going to be eating thighs and breasts. We’re going to be eating gizzards and chicken necks.”

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