Rocky Gap Lodge and Golf Resort

An aerial view of Rocky Gap Lodge and Golf Resort. (Kim Hairston/Baltimore Sun / March 30, 2011)

Hoping to turn around the struggling resort, Maryland's slots location committee awarded a license Thursday for a casino at Rocky Gap Lodge and Golf Resort in Allegany County.

The Video Lottery Facility Location Commission voted unanimously to issue the license to Evitts Resort LLC, the sole remaining applicant after the panel eliminated a group led by former Democratic Party Chairman Nathan Landow in January. The license is contingent on Evitts getting construction financing, but company officials do not expect that to be a problem.

The commission's action came the same day the Cordish Cos. announced that the Maryland Live! Casino at Arundel Mills will open to the public at 10 p.m. June 6, bringing the number of operating slots facilities in the state to three.

The Rocky Gap decision now goes to the state Board of Public Works — made up of Gov. Martin O'Malley, Comptroller Peter Franchot and Treasurer Nancy K. Kopp — for final review because it would be located on state property. The board overturns agency decisions only on rare occasions.

The license would allow Evitts, a subsidiary of Lakes Entertainment of Minnetonka, Minn., to operate up to 850 slot machines at the resort in Rocky Gap State Park near Cumberland. Evitts' $62 million plan calls for a 50,000-square-foot casino and 300-room lakefront hotel in addition to the existing 215-room lodge. The group has said it also would bring in two new restaurants and build a 25,000-square-foot theater.

The casino is expected to open within 24 months of board action, expected by late June.

The award of Maryland's fourth casino license had been expected several weeks ago, but Donald C. Fry, the commission chairman, said legal issues such as ground rent and payments to Allegany County needed more time to be ironed out. Fry, president of the Greater Baltimore Committee, said those issues have been resolved.

State leaders hope a casino at Rocky Gap will put the resort on a path to self-sufficiency and yield modest tax revenue for Maryland.

The decision comes as state leaders discuss the possibility of taking up a gambling expansion plan during a special General Assembly session this summer to consider a proposal that failed during the regular session that ended April 9. That proposal would allow a sixth casino in Maryland at National Harbor in Prince George's County and also permit table games such as blackjack there and at the five locations now approved for slots.

The two slots-only gambling sites now in operation are the Hollywood Casino in Perryville and the Casino at Ocean Downs near Ocean City. The Arundel Mills site, with 3,200 slot machines initially and a plan to increase to 4,750, will be the largest by far. Its opening plan is subject to approval by the Maryland Lottery, which will oversee a trial run before that date.

Fry said Thursday that a license for a location in downtown Baltimore could come in late June. The required background checks on top executives of the sole applicant, Caesars Entertainment, are expected to be complete next month, he said.

Rocky Gap was one of the sites targeted for slot machine gambling in the 2007 legislation that Maryland voters ratified in 2008. But the resort, located far from population centers and faced with competition from West Virginia, failed to attract investor interest under the legislation's original terms.

It was not until the legislature cut the state's share of the Rocky Gap proceeds to 50 percent and made further concessions last year that bidders emerged. Originally, the Rocky Gap facility had been expected to pay the same 67 percent tax as the other four locations — all of which are located in more populous, highly traveled areas.

The Rocky Gap resort has had a troubled history since it was conceived under the administration of Gov. William Donald Schaefer, who left office in 1995. Its prime backer was then-House Speaker Casper R. Taylor Jr., a Cumberland Democrat and close Schaefer ally.

Taylor, a relentless advocate for Western Maryland, promoted the resort to bring jobs to Allegany County, historically an area of high unemployment.

Construction of the $54 million facility was financed by $16 million in taxpayer funds plus high-interest bonds issued by the state-created, nonprofit Maryland Economic Development Corp. The resort — complete with a 215-room hotel, conference center and Jack Nicklaus-designed golf course on the shores of a scenic lake — opened in 1998.

Boosters described it as Maryland's answer to West Virginia's famous Greenbrier resort. "Rocky Gap will redefine what Western Maryland is all about," Taylor said as it was about to open.

The resort got off to a good start, and Taylor touted it as a potential magnet for other ventures, including a theme park and film production facility. It became popular for organizations with business before state government, mindful of Taylor's support of the resort, to hold gatherings there. But it soon began falling short of projections, particularly in winter when the golf course wasn't a draw. With no ski facilities, it couldn't compete with winter destinations such as Wisp in Garrett County. In summer, Deep Creek Lake remained the most popular destination in the Maryland mountains.

By 2007, gambling was seen as the only hope to stem losses at the resort, which has consistently missed payments to bondholders. In recent years, Rocky Gap posted annual operating losses — as much as $3.8 million in fiscal 2010 — and depended on subsidies in the form of loans from MEDCO to keep its doors open.