Nearly $8 million of Maryland slots money is expected to start flowing to small, women- and minority-owned businesses in May, more than two and a half years after the first casino opened.
The Board of Public Works on Wednesday approved the state Department of Business and Economic Development’s selection of three fund managers for the Small, Minority and Women-Owned Business Account, into which 1.5 percent of gamblers’ losses at slot machines in Maryland’s commercial casinos have been directed since September 2010.
Anne Arundel Economic Development Corp., Largo-based Meridian Management Group Inc. and Salisbury-based Maryland Capital Enterprises Inc. were selected to manage the money, half of which must be loaned to businesses within a 10-mile radius of Maryland’s three casinos in Anne Arundel, Cecil and Worcester counties.
Meridian — a familiar state partner — received $3.5 million to invest, the largest sum allocated from the $7.86 million account. According to state campaign finance records, since 2007, Meridian President and CEO Stanley W. Tucker has donated $26,822.50 to Democratic candidates for state office, including Gov. Martin O’Malley and former Baltimore Mayor Sheila Dixon.
Timothy L. Smoot, Meridian’s senior vice president and CFO, donated $15,146 to Democratic candidates during the same span, according to campaign finance records.
Tucker is also executive director of the Maryland Small Business Development Financing Authority, an arm of DBED that is charged with aiding “economically and socially disadvantaged entrepreneurs,” the department’s website states.
In an interview, Tucker acknowledged a “long-standing relationship” with the state, but said Meridian was chosen for effectiveness.
“We’ve been doing this in the state of Maryland since 1981. So, I think [they] know we have years of experience doing this around the state,” Tucker said. “I think the fact that our experience and the strength of our team and the years we have been doing this, I think they took all of that into consideration with regard to what we’ve been doing. … There are other folks out here who have been doing this as well. We have been creative and innovative.”
Anne Arundel Economic Development Corp., which received the second-largest sum of $3.4 million, is a pseudo-public economic development agency for the county, where Maryland Live Casino at Arundel Mills operates. Maryland Capital Enterprises, near the Casino at Ocean Downs in Berlin, received $1 million.
“Small businesses are the engine that drives Maryland’s economy and we are delighted to have these additional resources to support their growth and job creation in Maryland,” DBED Secretary Dominick Murray said in a statement. “We look forward to working with great partners like the Anne Arundel Economic Development Corp., Maryland Capital Enterprises, and Meridian Management Group to deploy these funds where they are needed most.”
The state is paying the three firms a combined $628,800 to set up the framework necessary to distribute the money. Loans will be distributed yearly going forward, and fund managers are required to reapply to distribute the money each year.
Slots money for small-, women- and minority-owned businesses has sat untouched since Hollywood Casino Perryville opened in September 2010 and began allocating revenue to the fund. After a Board of Public Works meeting last August, DBED officials said the totals were too small to bother with, until recently. Officials also said local firms — with knowledge of the local market — were better suited to distribute the money than DBED.
More than $412 million has been generated from slot machines at Maryland’s three casinos this fiscal year, $6.2 million of which has gone to the Small, Minority and Women-Owned Business Account. The business account receives the smallest distribution from Maryland’s 67 percent tax on slot machines. The bulk of state slots money — 49.25 percent — goes to the Education Trust Fund.
Casinos keep 80 percent of new table game proceeds. The balance goes to the Education Trust Fund.