With casinos in Cecil County and on the Eastern Shore up and running, investors are lining up for a chance at potentially lucrative slots licenses in Baltimore and beyond.
At least two groups, one from Canada and another headed by a local attorney, have hired Annapolis lobbyists in preparation for the state's reissuing bids for the parlor planned near Baltimore's sports stadiums, a review of state records shows. With an authorized 4,750 slots terminals, the casino would be one of the state's two largest.
Meanwhile, the operators of Laurel Park and two groups that have bid on the bankrupt Rosecroft Raceway in Prince George's County have their own well-established lobbyists in place to try to persuade state lawmakers and Gov. Martin O'Malley to add new gambling sites to the five locations approved for slot machines in 2008.
Any gaming expansion would require not only legislative backing, but also the endorsement of Maryland voters.
Ultimately, legislative analysts say, slots will bring the state $600 million in new revenue annually. But while the Hollywood Casino Perryville opened last fall, and slot machines at Ocean Downs race track on the Eastern Shore came on line last week, the largest facilities, including the Baltimore casino, have yet to open.
States such as Delaware, meanwhile, have upped the ante by adding table games to their operations.
"Neighboring states have since changed," said Donald C. Fry, chairman of the state slots commission. "If the legislature and elected leaders want to receive the type of revenues they had hoped for when they passed the law, having competitive locations and competitive products is essential. This is a relatively new industry for Maryland. We're going to need to make adjustments along the way."
The slots commission, which meets Tuesday, is expected to make recommendations to lawmakers about ways to stoke interest in Rocky Gap, the Western Maryland site that has yet to attract any bids. The commission also will get an update from the Cordish Cos. on plans to open a temporary casino at Arundel Mills Mall by the end of the year — one that would be bigger than either of the two now open.
Senate President Thomas V. Mike Miller, a Democrat who has long supported slots, said he is particularly concerned about the fate of the Baltimore casino and the city's efforts to attract a qualified bidder. The state's first attempt to issue a license collapsed when the only applicant, the Baltimore City Entertainment Group, failed to pay the necessary fees and submit a plan for the large-scale casino that city and state officials have in mind.
The group, headed by Canadian developer Michael Moldenhauer, appealed the dismissal of its contract, but a state board rejected that argument. Moldenhauer then sued the city, claiming it had unlawfully terminated the land deal for the casino.
The city has filed a motion for summary judgment of the lawsuit, a request for a quick resolution so officials may entertain new suitors for the land. A Baltimore City judge heard arguments last month on the motion and is expected to issue a decision in coming weeks.
The state slots commission will be briefed Tuesday on the status of the city lawsuit and efforts to craft a new proposal.
"I hope the mayor of Baltimore demands immediate action," Miller said in a recent interview. "Nothing positive has happened in the past several years. They need to move forward post-haste."
Miller questioned whether the city's many extra requirements on the original bid, including a profit-sharing fee designated to help reduce residential property tax, have scared away would-be casino developers.
"The city needs to take greed out of the equation and accept compromise," he said.
Baltimore Mayor Stephanie Rawlings-Blake supports the casino project. A spokesman for the mayor said the city is moving as swiftly as it responsibly can.
"There were delays as a result of a failed bidder who has been extremely litigious," spokesman Ryan O'Doherty said. "The city has been very aggressive despite these burdensome legal challenges meant to delay the state and the city from moving the project forward."
The Baltimore Development Corporation, which is leading the city's casino effort, has been working with an independent consultant to update revenue projections, given that developer David Cordish is building a 4,750-machine casino less than 15 miles away.
That research, O'Doherty said, will help the city decide what it can reasonably expect in the way of ground rent or profit-sharing from the casino. Before the state rejected Moldenhauer's bid for the Baltimore license, the city negotiated a deal with his group that was projected to net about $20.8 million in ground rent, property taxes and other revenue the year the casino opened. The city anticipated netting a similar amount each year.
The fees, which would have come on top of the 67 percent profit that all Maryland casino operators must pay the state, would have made Baltimore the most costly of the five casino sites.
The city must forward its new criteria to the slots commission before the state puts out a request for proposals. Fry said he wants to begin seeking bids by Memorial Day, but other officials have a more optimistic goal: next month.
Several groups are getting ready.
Charm City Casino LLC formed in July. Its lobbyist, William Kress, would not disclose any details about his client, which appears to be a Canadian investment firm.
In November, Baltimore lawyer Hassan Murphy launched an unrelated group called Charm City Development and Gaming. Murphy has hired Tim Perry and D. Robert Enten, two of Annapolis' best-paid lobbyists, to monitor legislative developments.
"We're looking at this like we're looking at all kinds of opportunities," said Murphy, who declined to give any details about others in his group. Once the state releases its Baltimore proposal, he said, "we're going to take a hard look at whether we're going to do anything with it."
Murphy's sister, Rebecca Murphy, is the director of special projects for the City of Baltimore. Asked about a potential conflict of interest, O'Doherty, the city spokesman, said that "none of her work at all relates to the [Baltimore Development Corporation's] effort in the slots site criteria."
Kress is a registered lobbyist for Clairvest Group, a Canadian private equity provider that has invested in casinos, including in Toronto and Des Plaines, Ill. On recently filed lobbying forms, Kress stated he would be working on "gaming, Bingo, lottery, raffles" for that client. He would not confirm whether Clairvest is connected to Charm City Casino.
Other casino-related groups also have hired lobbyists for the upcoming legislative session.
Orioles owner Peter Angelos and Chesapeake Racing, both of which hope to purchase the bankrupt Rosecroft Raceway in Prince George's County, employ Gerard Evans as their lobbyist.
Angelos' bid for the track proposes an extra fee if he is allowed to bring slots there by the end of 2012. Evans' lobby disclosure form about Chesapeake details that he will be working on "matters affecting the expansion of gaming and gaming activities in Maryland."
Evans would not discuss either client.
St. Louis-based Isle of Capri Casinos has hired Alexander & Cleaver to lobby for "ownership and operation of gaming and entertainment facilities." Robin Shaivitz, a lobbyist with the firm, said she was not authorized to talk about the client.
Isle of Capri Casinos has facilities in Kansas City, Mississippi, Iowa and other cities across the country, according to its corporate website. It's unclear where in Maryland they might like to develop a casino.
The Maryland Jockey Club and Penn National Gaming, which are trying to bring slots to the struggling Laurel Race Track in Laurel, will return to Annapolis with several lobbyists, including former O'Malley aides. Joshua White is among several working on behalf of the Jockey Club. Sean Malone is one of several people registered to lobby for Penn National.
Laurel submitted a bid during the first round of licensing, but did not pay all of the necessary fees, and so did not qualify. Cordish was awarded the sole license for Anne Arundel County.
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