As a Feb. 2 bid deadline for five Maryland slots licenses nears, developers interested in building a downtown Baltimore casino are indicating that the city's expectations of a financial windfall from a gambling project may be unrealistic.
City officials have said they expect all companies interested in erecting a casino on city-owned land south of the Inner Harbor to pay at least $36 million in annual lease payments - on top of a 67 percent state tax on gambling proceeds.
"It's a huge problem," said Kenneth R. Banks, a Baltimore developer who has teamed up with Hard Rock International Inc. to make a play for either a Baltimore or Anne Arundel County license.
Likewise, the Harbor Casino Group, which is planning a bid for the 3,750-machine Baltimore license, characterized the city's lease expectation as "unrealistic" and indicated the Camp Springs-based entity would counter with a less lucrative offer. "A $36 million return to the city on an annual basis would sink the boat," said Joseph Gaskins, a Harbor Casino official.
Gaskins said his group is collaborating with Greenwood Gaming and Entertainment Inc., owner of the Philadelphia Park track and casino in Pennsylvania, on a Baltimore application. Baltimore is hoping to use casino rent money to reduce the city's property tax rate. Deputy Mayor Andrew Frank has said it will not negotiate with bidders before Feb 2.
Despite skepticism from gambling analysts and lobbyists that the state tax rate - among the highest in the country - will depress competition for Maryland slots licenses at a time of economic decline, potential bidders such as Hard Rock have been emerging in recent days.
Banks, who is also treasurer of the state Democratic Party, said yesterday that whether his group proposes a casino in Baltimore or near Laurel Park racetrack in Anne Arundel County, he envisions a Hard Rock-themed "destination" that will be "not just a box for slots."
"They do phenomenal destination locations," Banks said of the Orlando, Fla., company, which runs the Hard Rock Cafe in the Inner Harbor. "They have casinos filled with memorabilia, and high-end, world-class hotels."
The Baltimore Hard Rock restaurant is a tenant in a project developed by the Cordish Cos., which has also indicated an interest in bidding for the licenses in Baltimore, Anne Arundel and Cecil County.
Banks said yesterday that his entity, Maryland Gaming Group, currently had "no association" with the Cordish Cos., though they have worked together on other projects. Cordish Cos. President David Cordish declined to elaborate on his plans. "We have partnered previously, on multiple occasions ... with both Banks Contracting and Hard Rock," he said in an e-mail. "Our exact location, partners and brand will be announced on Feb 2."