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Caesars group wants high-end casino in Baltimore

State commission expected to decide by March

By Annie Linskey, The Baltimore Sun

9:03 PM EST, November 14, 2011

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The head of Caesars Entertainment Corp. promised Monday to bring a "world-class" Harrah's casino to Baltimore that would be marketed heavily to 43 million gamblers in the company's rewards program if his group is given the go-ahead by Maryland's slots commission

"We believe we will bring a lot of people to Baltimore who might not otherwise have come," Gary Loveman, the chairman, CEO and president of Caesars, told the commission during a site visit Monday. "We think we can bring a lot of excitement to Baltimore."

Caesars, which also operates casinos nationally under the Harrah's name, is a key member of a group that is the only qualified bidder to open a slots parlor in the city. The group would try to distinguish itself from the state's other casinos by targeting higher-end consumers who might play in Baltimore one day and jet off and play in Las Vegas, Cairo or Johannesburg the next, another company official said.

And while Loveman said the facility would be profitable with the 3,750 slots machines approved by voters, he said ideally the group wants the General Assembly to ask voters for a state constitutional amendment to allow table games as well. If that is approved, Loveman said, Caesars would hold some of its regional World Series of Poker competitions in Baltimore. Such events can feature 1,000 poker players vying for a place at a championship held in Las Vegas.

Monday was the second time the state's Video Lottery Facility Location Commission has toured rundown blocks on Russell Street near the M&T Bank Stadium with a group of potential casino owners. The last visit — in August 2009 — ended in disappointment and months of litigation when the commissioners decided not to award a license to the bidder.

The state rebid a license for a Baltimore casino in September, attracting two bidders. One group was disqualified within days because it did not pay the required $22.5 million fee. Other city groups considered the deal but didn't participate because of difficulty raising funds.

That leaves one bid in Baltimore, by the group composed of Caesars and leaders from three other companies. Twenty-seven principals are listed, including Anthony W. Deering, the former chief executive officer of the Rouse Company, and Theo C. Rodgers of Baltimore's A&R Development. The group bidding is called CBAC Gaming LLC.

Donald Fry, the commission chairman, said the panel expects to decide by March whether to approve the proposal. He said the time is needed in part to complete investigations of all of the members of the large bidding group.

The group's proposed gambling palace would be called Harrah's Baltimore and rise two stories — an unusual configuration in the industry. The first floor would be ringed with street-level restaurants and retail shops designed to entice people into the building. The second floor would feature a sports bar and a food court. The architectural drawings show a brick-and-glass structure intended to echo the many historic red brick buildings in the city. The group would like to open the casino by mid- to late 2013.

An eight-story parking garage next to the building would hold 4,000 vehicles. The layout is designed to funnel visitors from the garage to the second floor of the casino via a skyway.

The proposal of a high-end casino is in contrast to the expectations of some skeptics, who have predicted that the 70 percent tax rate on revenues imposed by state and city officials would leave an operator without enough resources. Unlike Maryland's other slots parlors, the Baltimore casino will have to pay a 3 percent tax to the city on top of the 67 percent state tax on revenues.

"It won't be a box," said Rodgers, but it "won't be what you see in Las Vegas."

The bidders estimate the new facility, once open, will add 1,225 jobs to Baltimore's economy. The group pledged to try to hire locally, saying it would form partnerships with area community colleges and nonprofit groups to find qualified employees.

Rodgers said the project represents "an investment in and a commitment to the city of Baltimore" that will "serve to stimulate the city's economy."

Members of the bidding group also predict the casino will become a "development anchor" for the area. Deering, the former Rouse executive, said he sees "enormous potential" for new businesses to open along a walking corridor between the stadiums and the casino.

He said the area could become "an entertainment zone that could be unmatched." Officials said, however, they think it is unlikely that the casino would help revitalize the opposite side of busy Russell Street that is now home to a gas station and a new Royal Farms convenience store.

In the first year, the bidders believe the casino will take in $306 per day per slot machine. They expect that to grow to $353 by the fifth year. When the state approved slots in 2007, legislative analysts expected Baltimore machines to take in $315 per machine per day in the first year, but they've since cut those numbers by about 15 percent.

By the third year, the bidders say, they expect to pay the city $16 million a year in gambling taxes, surpassing the city's expectation of $12 million in that year.

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