Bidders for Prince George's casino license enter home stretch
By By Kevin Rector and The Baltimore Sun
Dec 01, 2013 at 5:00 AM
The three players bidding to build a new casino in Prince George's County have shown their hands, and the state will pick a winner by the end of December.
The stakes are high as the state prepares to hold a series of meetings beginning this week and culminating Dec. 20 to choose who gets to operate the state's closest casino to Washington. All three pitched casino resorts costing hundreds of millions of dollars to be built near where Interstate 95 crosses into Maryland.
The decision will be made by a special casino site-selection body, known as the Video Lottery Facility Location Commission, based on what it deems best for the state.
Some have said the bid by MGM Resorts International to build a $925 million resort casino on a bluff above the Potomac River at National Harbor and adjacent to I-95 is the front-runner simply because of its location, but others aren't so sure.
And the two other bidders sweetened their antes for the state. Penn National Gaming, which proposed building a $700 million facility at its Rosecroft Raceway in Fort Washington, promised an added $320 million for the county's health and education systems. Greenwood Racing, which proposed a $761 million facility nearby, said it would pay as much as $100 million for local road improvements.
David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, said he has seen competitive bidding processes play out in other states, but it is still too difficult to predict a winner in Maryland.
"There's no way to really break it down as typical," he said, "because every state is unique, so every state has its own set of circumstances."
Although the winner may be up in the air, analysts say the casino will be a major driver of competition in the state's gambling industry.
"You're going to have the big three in Maryland," said James Karmel, an industry analyst and history professor at Harford Community College, referring to Maryland Live at Arundel Mills, the rising Horseshoe Casino in Baltimore and the future Prince George's facility.
"It's going to get fun if you're into competitive business," he said. "You're going to see them really compete with each other in the next few years."
While both the Horseshoe and Prince George's casinos will benefit from their proximity to major population centers, Maryland Live will likely retain a large percentage of its existing customers in the suburbs between Baltimore and Washington, Karmel said.
"If Maryland Live has everything that a poker player, a slots player, wants, and he lives in Columbia or Glen Burnie or Annapolis, why should that player drive to Prince George's County?" Karmel said.
The state's newest casino also will add to Maryland's overall ability to challenge neighboring states for gambling dollars, including Pennsylvania, West Virginia and New Jersey, Karmel said.
The Prince George's proposal was born out of that competition.
Two of the three current bidders spent about $80 million to sway public opinion ahead of last year's statewide referendum on whether to allow the state's sixth casino to be built in the county.
It hadn't been part of the state's initial approval of casino gambling. But politicians had pitched the casinos as way to keep Marylanders' gambling dollars in state.
On one side, MGM, keen on winning the new license, spent millions of dollars urging voters to approve the new site, promoting the benefits to the state's education system — a major beneficiary of the gambling expansion.
Penn National, keen on protecting its existing share of the gambling market at its casinos in Charles Town, W.Va., and Perryville in Cecil County, spent millions of its own trying to convince voters the deal was a backroom gamble of its own, with no promise of benefiting schools.
The ballot measure also included adding table games at all the state's casinos, in part to ease the competition the new Prince George's casino would create for the others.
The battle was the most expensive political campaign in Maryland's history.
When voters narrowly approved the Prince George's location, bidding for the license itself became more competitive than it had been for any of the state's previous five.
MGM, Penn National and Greenwood submitted applications for the license in May. In the months since, all three have aggressively sought to convince the state's location commission that their proposal would be the best deal for the state.
Thousands of pages of plans have been submitted, fancy renderings have been crafted. The companies have alternately said their proposals would bolster horse racing (Penn National), offer a higher tax rate for state revenues (Greenwood), and beautifully mirror the cultural landmarks of Washington (MGM).
Members of the commission, chaired by Donald C. Fry, toured the sites and conducted public meetings in October.
"You can look at maps and look at pictures, but when you're on the site, I think that gives you a better perspective of how everything will be situated," said Fry, also the president and CEO of the Greater Baltimore Committee.
Many county residents spoke at those meetings, criticizing each for various reasons. Additional traffic was one of the top concerns.
Now the commission is nearing a decision.
On Friday, it will hold a meeting to hear input from consultants hired to assess the various proposals, as well as responses from the applicants. On Dec. 12, commissioners can ask additional questions of the consultants and applicants during a public conference call.
On Dec. 20, final presentations will be made, and the seven-member commission will vote.
Fry said he and the other commissioners started reviewing the consultant reports just before Thanksgiving. The final decision will be based purely on what project is best for the state, he said.
All three of the bidding companies said at the public hearings that they felt the process had been fair and open, but not everyone feels that way.
Andrew Colbert is one of many Prince George's residents who question whether Maryland's process for selecting the winning bidder will conclude fairly.
A Fort Washington resident and president of the Indian Head Highway Area Business Council, which represents about 25 businesses in the area, Colbert says he's already seen too many politicians trying to sway the commission.
Colbert, who backs the Greenwood proposal, said he's peeved mostly by the "presumptive sense" that MGM will win the bidding war.
"It seems almost like a foregone conclusion that MGM will be the successful bidder for this thing, and that's from some of our public officials and how they've behaved, some of the back chatter in our communities, and even in the media," Colbert said.
He will be watching this month's commission events and reviewing the consultants' reports closely, he said. Whatever the outcome, he just hopes it squares with what seems best for the state.
"We have a responsibility, but we also have a right," he said, "to expect that the process will be a legitimate and fair one that we can all point to and say, 'You know what? I understand how you guys came to this conclusion.' "
For his part, Fry said he thinks the process has been successful so far.
"It never moves as fast as everyone would like," he said, "but overall I think this has been a pretty expeditious process."