- The Washington Times - Monday, February 2, 2009

ANNAPOLIS | With the deadline Monday for bids on Maryland’s five slot-machine licenses, state officials are hoping for the best at a time when difficult financial conditions could have a big impact on what developers propose.

It’s unclear whether bids will be submitted at all five sites. And it’s uncertain whether developers will want the full amount of allowable machines at the sites that receive bids. The maximum is 15,000 machines divided among the five locations.

Another concern is that slots operators will receive only about one-third of the revenues, a smaller-than-usual cut compared with other states, which could make a deal less attractive. About half of the money will go to the state.

“It’s possible that we won’t see bids for a location,” said Donald Fry, chairman of the state commission responsible for granting the licenses in Anne Arundel, Cecil, Worcester and Allegany counties and Baltimore city.

Voters approved a constitutional amendment in November to legalize slot-machine gambling, which ended a long battle in Annapolis that stymied lawmakers for years.

Slots parlors are expected to begin operating in 2011, with the two racetracks in Anne Arundel and Worcester counties expected to begin first because the infrastructure already exists at the facilities. By 2012, Maryland could receive more than $600 million in revenues from all five sites, according to estimates by state fiscal analysts.

State officials plan to announce Monday afternoon the number of bids and the number of machines that have been requested. More details about the proposals are expected to be released later this week.

Bidders will be required to pay $3 million for every 500 machines they request. That would raise a badly needed $90 million for Maryland’s fiscal 2010 budget, if all 15,000 machines are requested.

The developers also will have to pledge to spend an additional $25 million in capital-improvement investments at the site they select for every 500 machines.

The state’s Video Lottery Facility Location Commission, is overseeing the licensing process. The commission may change the allocation of slot machines, if market conditions warrant adjustments, but no more than 4,750 machines can be placed at a single location.

The Maryland Lottery Commission, which will oversee slot-machine operations, will hold a concurrent review to examine the financial backgrounds and conduct criminal-background checks on potential operators.

In the proposals submitted by Monday’s deadline, bidders will be required to provide financial information and as much information as they can about the facility proposals. They must submit more details by April 15.

Hard Rock International, developers of four casinos in other states, was among those planning to make a proposal.

The Maryland Jockey Club plans to apply for a license at Laurel Park, in Anne Arundel. The site at Rocky Gap State Park, in Allegany County, can have only 1,500 machines, prompting worries that the smallest venue may not be enough to entice a bidder. Baltimore officials want $36 million in rent for the site there, raising concerns about scaring away developers for a venue that can have as many as 3,750 machines.

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