Bryan P. Sears//Daily Record Government Reporter//October 21, 2013
//Daily Record Government Reporter
//October 21, 2013
The chairman of the commission that will award a casino license for a site in Prince George’s County said a proposal by Penn National Gaming Inc. to share hundreds of millions of dollars in profits with the community if it’s built at Rosecroft Raceway raises a number of unanswered questions.
Donald C. Fry, chairman of the state Video Lottery Facility Location Commission, said Penn National’s decision to “give 100 percent of the profits” of a new casino back to a number of organizations in Prince George’s County was not revealed until the group toured Rosecroft Raceway on Monday.
Fry declined to comment on the specific plan but said the commission has several questions about it.
“We’re limited by state law on how we can make this decision,” Fry said. “We’ll have to see if their new proposal fits into any of those criteria.”
Penn National is one of three applicants seeking to build a new casino approved for Prince George’s County. MGM Resorts International is going after the same license — its preferred location is National Harbor —and so is Greenwood Racing, which has proposed a hotel, casino and entertainment site in Fort Washington.
Penn National, based in Pennsylvania, currently operates the Hollywood Casino Perryville and Rosecroft Raceway in Fort Washington. The company wants to build a 308,000-square-foot casino that includes a 258-room hotel and event space, at a cost of about $700 million.
Penn National officials discussed the plan Monday during a public meeting at Friendly High School in Fort Washington but added few new details beyond a statement released earlier in the day.
If Penn National’s bid is approved, Tim Wilmott, the company’s president and chief operating officer, said it could open the casino by July 1, 2016, the first day allowed by law.
Initial details of the proposal include:
“We believe this will provide something unique,” Wilmott said.
In the earlier statement, Wilmott said the money would “fund currently unfunded elements of the new hospital system, provide tools necessary for the county’s education system to attract and retain educators and to support the neighbors closest to us and most impacted by our proposed development. This profit-sharing proposal will touch each and every resident in Prince George’s County.”
It is not clear how the company is defining what constitutes a profit.
Although Penn National currently operates the Hollywood Casino in Perryville, state law passed in 2012 prohibits any gaming company from holding the license to more than one casino in the state.
Accordingly, Wilmott said, Penn National will split into two publicly traded companies on Nov. 1, Penn National Gaming and Gaming and Leisure Properties Inc. The casino in Perryville would be transferred to Gaming and Leisure Properties Inc. and pay a licensing fee to Penn National Gaming in order to continue operating under the Hollywood Casino brand name.
Under the proposal for the Prince George’s County facility, the 125-acre parcel that includes Rosecroft Raceway and the proposed casino would be owned by Gaming and Leisure Properties but Penn National Gaming would hold the license and manage the property.
The company would contribute 100 percent of the profit after taking into account all operating expenses, management fees, lease fees, interest and other expenses, Wilmott said.
“We’ll get a percentage off the top and a percentage off the bottom as part of our fee structure,” Wilmott said, adding that the arrangement would be “adequate to our shareholders.”
Committee members asked for details about those percentages. Following the meeting, Fry said the group would take confidential estimates of profit provided by Penn National and “attempt to back into those figures.”
The site visit to Rosecroft Raceway was one three visits that will occur this week. On Friday, the commission will visit the National Harbor site favored by MGM Resorts International.
Gordon Absher, vice president of public affairs for MGM Resorts International, declined to comment directly on Penn National’s amended proposal.
“We look forward to Friday when it will be our opportunity to share our vision for National Harbor,” Absher said.