By John Wagner
Washington Post Staff Writer
Thursday, November 6, 2008
Voters ended Maryland's marathon debate over legalizing slots on Tuesday night. By yesterday morning, a sprint to get the machines in place had begun -- with almost everyone expecting some hurdles.
Before 9 a.m., the Maryland Jockey Club announced its intention to seek a slots license at Laurel Park in Anne Arundel County. Potential bidders for the five sites authorized by voters face an aggressive Feb. 1 deadline to pull together proposals, and no one knows how many will come forward.
Gov. Martin O'Malley (D) and legislative leaders said they would move briskly to appoint a commission to pick Maryland's slots operators. That is just one of many administrative steps required before slots parlors can open to the public -- and before the state can begin to reap a share of the proceeds. Slot machine gambling is projected to eventually generate more than $600 million a year for state education programs.
"It has always been our intent to move forward with some speed . . . so we might realize those revenues as quickly as possible," O'Malley told reporters yesterday.
The governor was basking in election results showing that almost 59 percent of voters approved of his plan to authorize as many as 15,000 slot machines in Allegany, Anne Arundel, Cecil and Worcester counties and Baltimore. The ballot measure received majority support in Baltimore and all 23 Maryland counties, including those jurisdictions slated to have slots parlors.
It could be more than two years before all slots locations are fully operational, but preparations that began in recent months are certain to accelerate in coming weeks.
Maryland conducted its long-running debate over slots in the General Assembly as neighboring states put in place similar programs, so it has the advantage of having learned from their experience.
"It's something we've been thinking about for six or seven years," said Buddy Roogow, director of the Maryland State Lottery Agency, which will be largely responsible for overseeing the slots program.
The agency's duties will include buying or leasing the 15,000 slot machines used by private operators, hiring security guards for the five facilities and conducting background checks on others who work at slots parlors.
Besides the Jockey Club, several other potential bidders have emerged, despite Maryland's decision to let operators keep a smaller share of the proceeds -- no more than 33 percent -- than other states allow.
Among them is a group that includes the son of Baltimore Orioles owner Peter G. Angelos and two former Maryland Democratic Party chairmen, Wayne Rogers and Nathan Landow. The group is exploring bids at multiple sites, according to people familiar with their plans.
Other likely bidders are focused on individual sites. William Rickman, a Potomac developer, is widely expected to bid on the Worcester site, which state law defines as a one-mile radius around an intersection near Ocean Downs, the horse track he owns.
Although the track is considered the leading option for Worcester slots, a license is not guaranteed. Other investors have begun exploring bids using largely undeveloped parcels in the one-mile radius.
Meanwhile, Penn National Gaming, a Pennsylvania-based casino operator, remains interested in the Cecil site, said Eric Schippers, the company's vice president for public affairs.
Schippers said yesterday that the share of proceeds earmarked for operators in Maryland is relatively low but that his company is partnering with another party to build other attractions in the area that could make the project viable.
House Speaker Michael E. Busch (D-Anne Arundel), who has opposed slots in the past, said the low revenue share for operators "probably will scare some people off."
Although he expects bidders for the larger, more lucrative sites, including Anne Arundel and Baltimore, Busch said, the Allegany site could be a problem. That site is defined in the law as adjacent to the state-financed Rocky Gap Lodge.
If bidders do not come forward, the legislature could adjust the distribution of proceeds to make individual sites more attractive. O'Malley and state Senate President Thomas V. Mike Miller Jr. (D-Calvert) said yesterday that they are hopeful that will not happen.
Before bid solicitations can begin, O'Malley and legislative leaders are required to appoint a seven-member commission to review the proposals.
Given the value of the licenses, Miller said, it is important that appointees are of "impeccable character." He said he expects to work with O'Malley and Busch to vet the nominees.
The law also calls for expanding the Lottery Commission, which will oversee slots sites once they are established, from five to nine members. The governor must appoint the additional members.
There are other obstacles to all five facilities opening by 2011 as anticipated.
Slots venues will have to comply with local zoning laws, which could be an issue in some jurisdictions. Some Anne Arundel politicians, for example, have said that they envision a fight over slots in their county. The Anne Arundel site is the largest, and probably the most lucrative, of the five locations.