Rocky Gap proposes new slots, outdoor gambling

New era for once-troubled Rocky Gap, the casino resort?

Rocky Gap Casino Resort, whose owner and operator plans to merge with a Nevada company, is seeking Maryland regulators' approval to add 54 slot machines and create a new outdoor gaming area, according to state records.

The request, if approved at Thursday's meeting of the Maryland Lottery and Gaming Control Commission, would boost the Cumberland-area casino's slots total to 631 even as other Maryland casinos have been cutting back on slot machines.

The casino would place 24 of the machines on the current gambling floor and 30 in a new outdoor area, according to descriptions of its plans posted on the regulatory agency's website. The outdoor area would be enclosed on three sides and have a roof with a 3-foot overhang on the fourth.

The documents contained no cost estimate for the addition, and Scott Just, the casino's general manager, declined to comment until after Thursday's meeting, said spokesman Joshua Taustein.

Separately, the gaming control agency staff is recommending approval of the proposed merger of Lakes Entertainment, which owns the resort, and Las Vegas-based Golden Gaming. The commission will vote Thursday on the $128 million merger.

After Lakes and Golden announced plans in January to create Golden Entertainment, the agency began an investigation of the company and its principals' financial stability, background and experience.

"Based on our investigation, MLGCA staff has determined that this proposed merger meets and is consistent with the gaming law," the staff said in the draft of a report to be presented at the meeting. "In addition, we conclude that Golden Gaming, its principal entity and principals, have established by clear and convincing evidence their qualifications for licensure."

Golden Gaming operates casinos and taverns, and a subsidiary known as Golden Route Operations installs and operates thousands of gambling machines in taverns, convenience stores and other retailers in Nevada.

In recent years, Golden Gaming "has been saddled with substantial amounts of long-term debt at high interest rates resulting in a continual drain on Golden Gaming's financial resources," the agency staff said in the draft memorandum.

"Overall, Golden Gaming's financial position and operating performance has not been positive but has shown definite signs of steady improvement over the period reviewed (Dec. 31, 2010, through Dec. 31, 2014)," the draft said.

The agency said an expansion of its route and casino operations in 2012 "significantly strengthened Golden Gaming's existing market positions, and bolstered its revenue. This, coupled with Golden Gaming's ability to control its operating costs, has led to positive and steadily improving operating results."

Lakes' principal asset is Rocky Gap, the once-troubled, state-owned resort it acquired for $6.8 million in 2012. Lakes opened a $35 million casino there in 2013 in an area that once housed the lakeside golf resort's conference center.

The casino, which also has 17 table games, generated $4.2 million in May, an increase of 12.7 percent over May 2014.

The draft memorandum said Lakes "has significant amounts of cash and other liquid assets and are not highly leveraged, which should greatly benefit the company post-merger."

While Rocky Gap hopes to increase the number of slots, other casinos have been reducing their offerings.

In January, the commission approved requests by the Maryland Live and Horseshoe Baltimore casinos to eliminate 300 slot machines each and add more profitable table games.

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