The Senate legislation also eases the current ownership restrictions, allowing the operator of Rocky Gap to run another casino in the state. The state initially insisted that no single entity could hold more than one gambling license, a restriction intended to prevent a monopoly.

Eric Schippers, a spokesman for Penn National, which owns the Hollywood Casino Perryville in Cecil County, said his group "is not in any way" interested in the Rocky Gap license. Neither is William Rickman, who owns the Casino at Ocean Downs on the Eastern Shore, according to a spokesperson.

Those two facilities opened late last year.

Baltimore developer David Cordish, who is building a billion-dollar casino complex at Arundel Mills, said he would bid on Rocky Gap "as a public service" if he were asked to by the state, but he is not otherwise interested.

"Even with these helpful changes, it would not be much of a money-maker for the operator," Cordish predicted. "The big winner would be state taxpayers and Western Maryland."

A planned casino for Baltimore remains in litigation as the city and state attempt to separate themselves from Canadian developer Michael Moldenhauer. Donald C. Fry, the chairman of the state slots commission, said he expects to re-bid the Baltimore license by the end of April.

If the Rocky Gap incentives become law, Fry said, his commission will likely put that license out to bid at the same time.

The Rocky Gap hotel and lodge lost $3.8 million in fiscal year 2010 and do not generate enough revenue to cover debt payments, according to an analysis by the department of legislative services.

"The recession impacted us severely," said Robert C. Brennan, executive director of the Maryland Economic Development Corp., which oversees operations at Rocky Gap. "We can't continue to sustain losses."

The hotel averages 50 percent occupancy, Brennan said.

Built in 1998, the 220-room hotel complex was financed through a complicated web of private and public investment. The private investors are owed about $32.5 million. The state and county have put about $30 million into it, Brennan said.

But lowering the tax rate at one of the five casino locations could lead operators of the others to ask for reductions of their own. Schippers, with Penn National, said his group would "certainly support" any effort to slash the "the tax burden on all the casinos given the competitive advantages of the neighboring states with lower tax rates."

In part to head off that argument, the House is considering creating a gambling permit just for Rocky Gap — a "boutique resort license," for casinos with a limited number of slot machines.

The new category would set Rocky Gap apart from the "more monstrous locations" such as Baltimore, said former House Speaker Casper R. Taylor, who now is lobbying on behalf of the bondholders.

"It is very questionable as to how many more months Rocky Gap is going to be able to operate," Taylor said. His clients are "very eager" to rid themselves of the project.

Rocky Gap proposals

In the hope of drawing bidders for the slots license at Rocky Gap, the Senate has passed legislation that would:

•Reduce the state's take of gambling revenues from 67 percent to 50 percent for the first 10 years of the slots license

Cut at least $3 million from the fee to bid on the project

Allow the operator of another casino in Maryland to also run a casino at Rocky Gap

The House of Delegates has yet to act.

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