By Laura Smitherman and Gadi Dechter
February 6, 2009
The startling suggestion from a powerful lawmaker underscores frustration in Annapolis with the outcome of this week's bidding process, which resulted in six proposals to install fewer than half of the 15,000 slot machines authorized by voters last fall. Two of six bidders failed to put up more than $20 million in required licensing fees.
"I have to believe that the bidding process at the present time is in disarray and that someone needs to analyze the problems with the bidding process apart from the economy," said Miller, who called the results "unacceptable."
The tepid response from companies seeking slots licenses has caused some lawmakers to reconsider the hefty investment their plan required. The proposals fall far short of the number of machines needed to generate more than $600 million annually in state revenue that had been projected. It also has resurrected tensions among legislative leaders.
House Speaker Michael E. Busch said scrapping the proposals could taint the integrity the bidding and tarnish the state's relationship with the business community.
"Why would anyone respect the process any longer?" he said. "Everybody had the same opportunity."
Busch and Miller had been on opposing sides of the debate for years until Busch, a longtime slots foe, agreed to let voters decide on legalizing gambling.
David Cordish, whose Baltimore-based company proposed the biggest casino, said in an e-mail that it would be "completely illogical" to re-bid for Anne Arundel County, where he wants to put the maximum allowed 4,750 machines next to the Arundel Mills mall. He said his proposal for a world-class casino would be "one of the top gaming and entertainment projects in the country."
"The state can't do any better in Anne Arundel than it already has with our proposal," Cordish wrote. "Starting the process over would only delay the start of the much needed revenue support."
The commission charged with awarding the licenses is scheduled to meet next week. Chairman Donald C. Fry said the commission is following a step-by-step bid evaluation as envisioned by the law. Gov. Martin O'Malley has cautioned that it is early in the process and that commissioners must be given time to do their jobs. "The governor is going to wait to see their recommendations," spokesman Rick Abbruzzese said yesterday.
Miller said he wants the commission to report to the General Assembly and O'Malley on what the next step should be, and he suggested that could range from starting over to accepting some bids while possibly rejecting others. Miller also lashed out at Magna Entertainment Corp., the other bidder in Anne Arundel County, for failing to put up the licensing fee.
The Canadian company "needs a new set of lawyers," he said. "Whoever advised them to handle the matter the way they did in my opinion adversely affected their ability to obtain a license."
Officials of Magna, which put money in escrow after the bid deadline, did not return phone calls.
Miller also said he wants the commission to weigh in on whether the General Assembly should make the tax rate more favorable for casinos, though he acknowledged pitfalls in such a strategy.
"It would be a major embarrassment to the state if we changed the splits and then got the same product on the re-bid," he said.
While Busch has lamented the paucity of bids, he said legislative changes at this point amounted to "tampering." Miller issued a statement later in the day, clarifying that he wanted the panel to assess the situation before lawmakers consider any changes.
Miller also blamed Busch for legislative language that allowed slots to be put next to a mall. Miller said he told people slots wouldn't be in neighborhoods or "near your kids." Busch said he was in favor of drawing gambling zones to encourage competition.
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