As video game casinos continue to pop up around Maryland – the most recent opening just miles outside Ocean City earlier this month – the status of Baltimore slots remains in limbo.
City officials say they aren’t accepting bids for a Baltimore venue until a string of legal issues stemming from the last, and only, licensee are cleared. That bidder, the Baltimore Entertainment Group, has been involved in two separate legal quarrels with the slots commission and the city. The commission terminated the group’s contract for failing to meet fee deadlines, prompting the group to file an appeal with the state and sue the city.
Donald Fry, chairman of the Video Lottery Facility Location Commission, said the state should make a decision in the case against the commission within the next few months. He is confident they will rule in his favor. “We hope to be in a position to rebid as soon as possible and we are waiting to have just a little more legal certainty before we issue a new request for proposal,” he said.
A spokesman for Mayor Stephanie Rawlings-Blake said the city’s suit should be settled within a matter of weeks.
Marylanders green-lighted five slot parlors to open throughout the state during a 2008 voter referendum. Yet, only two have opened, the Hollywood Casino in Perryville and the Casino at Ocean Downs, five miles outside Ocean City.
The Baltimore casino, with a maximum of 3,750 slot terminals, will open on a city-owned lot south of M&T Bank Stadium on Russell Street. Baltimore is the only jurisdiction to require a slots parlor on city grounds. Mayoral spokesman Ryan O’Doherty said the requirement allows the city to generate funds by leasing the land, creating a “real potential for property tax relief.”
The Baltimore Development Corporation has hired an independent consultant to evaluate revenue projections and determine a competitive lease asking price, O’Doherty said. The requirements may mirror the previous proposal, he added, but it was important to craft a competitive new contract to attract bidders.
Projected revenue for the Baltimore casino is contingent upon the details of the winning contract, but Sen. Catherine Pugh, D-40, says the city will collect about $12 to $20 million in state tax revenue. Maryland casinos must give the state 67 percent of their profit.
Maryland`s first casino, the Hollywood Casino in Perryville, has generated $27.5 million in revenue since it opened in September. When the five slot parlors are intact, they are expected to bring the state $600 million a year.
Once the slots commission releases a request for Baltimore proposals, potential licensees have roughly 13 weeks to respond and submit a $3 million initial licensing fee and $25 million in construction costs for every 500 machines.
Fry, whose office chooses the operator, said the selection process could take 6-8 months as the slots commission conducts an extensive reviewing process, including criminal background checks. He said he hopes to expedite the process.
Commission officials say they are constantly receiving inquiries from potential investors curious when the bidding process will begin. “There does seem to be a renewed and increased interest in the Baltimore City location and we are very hopeful that when we are in a position to rebid that we will have a number of bids that qualify,” Fry said.
O’Doherty said he expects more bidder interest because of the improving economy and the city’s streamlined proposal process. During the first bidding, potential investors criticized the city’s lack of transparency about which parcels of land would be available. “It was a lesson learned,” he said.
Mike Cryor, a Baltimore businessman and community activist, said he has been following the Baltimore casino developments and is considering a bid. He is waiting for the state’s proposal before he makes a final decision, he said.
And new potential bidders have emerged, including Baltimore attorney Hassan Murphy. Media outlets have reported that Murphy, the great-great grandson of the AFRO’s founder, has hired a General Assembly lobbyist and created a group called Charm City Development and Gaming last November in preparation for the Baltimore bidding. “In the interim, we are gathering information and trying to figure out if it’s going to be worth the time, effort and money,” Murphy told the AFRO.
Meanwhile, the State Legislature is considering revising bidding laws to allow developers to own more than one casino.
The state is also looking for acceptable bids in Western Maryland’s Rocky Gap, while investors are pushing for slots in other locations including Prince George’s County and Ellicott City. Maryland law would require a nod from voters for slots to open in these new locals. A third casino is expected to premiere near Arundel Mills Mall in Anne Arundel County later this year.
