Lawmakers will soon consider changes to Maryland's gambling laws, as leaders scramble to entice qualified bidders for the stalled slots parlors in Baltimore and Western Maryland.
Senate President Thomas V. Mike Miller Jr. said many aspects of the program will be on the table when the General Assembly convenes in January. He will push to ease restrictions preventing casino owners from controlling more than one of the state's five licenses. Other legislators say the tax rate on slots proceeds should be reduced.
"We're six years behind the times here in Maryland," said Miller, a Calvert County Democrat, suggesting that allowing a company to hold more than one license would make sites more attractive. "It's just a restriction that curtails bidders that might be willing to come to the state."
Maryland's slots program was approved in a 2008 referendum, and it was expected to bring in $1.5 billion annually in sorely needed state revenue by 2015. But until all five approved sites begin operating, the state won't receive all the money it is anticipating.
The gambling program has shown signs of progress with the recent opening of the state's first casino in Cecil County, along with zoning approval by Anne Arundel County voters this month for what could be the state's most lucrative slots parlor at Arundel Mills mall.
Still, many remain concerned that there are not enough companies willing to agree to Maryland's stringent casino rules — and those worries have been amplified by the repeated failure of the state-financed Rocky Gap Resort and Lodge in Allegany County to attract qualified casino bidders.
Increasing competition from surrounding states, including the introduction of table games like poker, blackjack and roulette, is also motivating lawmakers.
Maryland's 67 percent tax rate for slots is among the highest in the nation and above that of its nearest competitors, critics note. The rate in Pennsylvania is 55 percent, for example.
Lawmakers are limited in what they can do by the fact that voters approved slots as a constitutional amendment. Many changes — such as the addition of new types of gambling — would require voter approval. Miller derided that restriction. "The law is so crippling. … No business can be run like that."
The state has tried to increase interest in the more remote Rocky Gap site through a slight tax break passed this year. But recently, state officials have expressed interest in more changes that would spur the more lucrative, large-scale slots parlor planned for Baltimore. Another site, at Ocean Downs in Worcester County, is expected to open by the end of this year.
Gov. Martin O'Malley has acknowledged that some changes will be necessary to get the two languishing sites up and running, but he has not offered details about his preferences.
Spokesman Shaun Adamec said in an e-mail that he'd "hesitate to provide comment on specific options."
The state Video Lottery Terminal Location Commission, which awards slots licenses, is prepared to make recommendations to lawmakers on how to sweeten the pot for potential bidders, its leaders say.
A spokeswoman for Michael E. Busch said the House speaker will consider recommendations made by the commission.
Accomplishing any change will likely require consensus among the governor and the General Assembly's presiding officers.
Further complicating matters for the planned Baltimore casino, which is slated to house a 3,750-slot machine parlor at an undeveloped, city-owned site on Russell Street, is a continuing legal battle. Baltimore City Entertainment Group, which bid on the site but failed to make millions of dollars in payments, ultimately sued the city for $100 million in damages, claiming the city failed to uphold its deal. The city countersued; both lawsuits are pending.
The group also filed an appeal with the Maryland Board of Contract Appeals after the commission that awards the state's slots license threw out its proposal. The appeal is also pending and both issues must be decided before the Baltimore license is rebid. The owner of the Maryland Jockey Club., which failed in its bid to bring slots to Laurel Park race course in Anne Arundel County, has also filed an appeal to the board.
Ryan O'Doherty, a spokesman for Baltimore Mayor Stephanie Rawlings-Blake, said there is a sharp contrast between the Rocky Gap and Baltimore sites.
"Baltimore has the potential to be the premier gaming site in the Mid-Atlantic region because of the proximity to the downtown area," he said.
Once the legal battle with the former bidder is resolved, the city will issue a new request for proposals for the site. The site drew interest from developers when the original request for proposals was made in the fall of 2009, despite the difficult economic climate at that time, O'Doherty said. Officials expect even more interest in the site now that the economy has improved.
The city has the zoning in place for slots and has offered financing incentives for a developer to build a 1,000-space parking garage, but the state has even more power to lure developers with incentives, he said.
Del. Curtis S. Anderson, leader of the Baltimore City House delegation and an opponent of slots gambling, said that while he's not inclined to lead any efforts to help the slots cause, he would consider voting for changes in the tax structure. He said that he "wouldn't mind somebody having two licenses," but added, "I'm not trying to help them."
"If we got to the point where there was a dire economic emergency in our state, which pretty much already exists, I would certainly consider moving some of the allocations around," said Anderson, adding the caveat that revenue steered to the city and education funding could not be decreased.
Miller said Penn National Gaming Inc., which waged an aggressive but unsuccessful battle for the Anne Arundel license, has "expressed interest" in the Baltimore location, a contention that a company spokesman would only say is "not on our immediate radar."
At Rocky Gap, lawmakers are willing to look at changes intended to accelerate the process.
Sen. George C. Edwards, who represents the area that includes the resort, said he's prepared to work on revisions to the state's slots tax structure, and could envision lowering the tax rate to 50 percent.
"If the state's getting 50 percent, that's better than nothing," said Edwards, adding that the legislature needs to act quickly. "It's still money that you don't have now if you don't have anyone in there running a slots emporium."
Edwards said he first proposed the plan to Fry earlier this year when the legislature passed a small tax decrease for Rocky Gap, which was contingent on the operator buying the financially struggling state-owned resort, but the commission panned the idea. Edwards said he plans to press it this session.
"The economy's still not booming," said Edwards. "People are going to look a little closer about what they can make off this. People are being scrutinized in their investments. But I'm confident we can come up with something that will be beneficial."
Baltimore Sun reporters Julie Bykowicz, Hanah Cho and Julie Scharper contributed to this article.