Casino bidder calls Prince George's site selection process flawed
By By Kevin Rector and The Baltimore Sun
Dec 16, 2013 at 8:43 PM
Less than a week before state officials are expected to award a casino license in Prince George's County, one of the three bidders is calling the state's research "flat-out wrong."
Greenwood Racing, which wants to build a Parx casino on Route 210 in Fort Washington, has asked the state's special site selection committee to delay a decision currently scheduled for Friday. The company wants more time to challenge findings that a rival bid would be more lucrative for the state.
Two weeks ago, consultants to the state concluded that a proposal from MGM Resorts International to build a casino at National Harbor would bring in more revenue than Greenwood's proposal or that of Penn National Gaming, which wants to build a Hollywood casino at nearby Rosecroft Raceway.
In a 68-page letter last week, Greenwood attorney Mark S. Stewart cited "genuine frustration" with the way Denver-based Custom Gaming Consulting evaluated the revenue potential of each project. Stewart called the methodology "flawed and flat-out wrong in many ways."
"The Commissioners, thoughtful and dedicated as they are, do not have experience in developing and operating gaming businesses and have been presented with voluminous, esoteric, number-filled (and at times internally inconsistent) consultant reports," Stewart wrote in the letter dated Dec. 13.
Voters authorized a casino for Prince George's County in 2012.
State officials said they would not delay the license, but that concerns outlined in Stewart's letter — complete with calculations from the company's own consultants — would be reviewed by members of the state's Video Lottery Facility Location Commission, which is charged with selecting the project that will provide the most benefit to the state.
Donald C. Fry, the chairman of the commission, said commissioners "will consider all information received from the applicants and the consultants, the commissioner's personal observations, assessment of the proposals, and public comment."
The state's consultants found that the MGM proposal would generate annual gambling revenue between $713 million and $719 million. Greenwood would generate between $617 million and $682 million and Penn National would generate between $551 million and $560 million.
Greenwood's criticisms of the consultants' work are varied, but two are central to its argument that the process has been skewed.
First, following the consultants' assessment that the MGM proposal would bring the most revenue to the state, Greenwood doubled its pledge for highway improvements near its site last week, to $200 million. It now wants its new investment total to be incorporated into the consultants' findings, Stewart wrote in the letter.
Stewart also called "illogical" a calculation by Custom Gaming Consulting that a four-minute-shorter drive to MGM's proposed site for Northern Virginia residents would mean larger revenues there.
Jim Oberkirsch of Custom Gaming Consulting has defended his company's report and the finding that a shorter travel difference would make a difference.
"It's a formula that's been tried and tested over time," he said.
Some commissioners have asked questions about details in the reports and received responses from the consultants. But Stewart said "the discussion of those questions has been limited and stunted."
"Questions raised are not answered," he wrote. "Instead, the same conclusions that prompted the questions in the first instance are simply reiterated or repackaged."
The complaints are consistent with others from community members in the affected areas around the proposed casino sites, who have argued the process has not been fully transparent.
Gordon Absher, a MGM spokesman, said the company sees "no reason to delay the Commission's decision, which would undoubtedly delay jobs and financial benefits to the state and to the residents of Prince George County."
A spokeswoman for Penn National did not immediately respond to a request for comment.