State to seek new bids for Rocky Gap casino

ANNAPOLIS – The state will seek new bids for a casino developer in Allegany County next month with hopes of awarding a gaming license there by the end of the year, Maryland’s gaming license panel announced Friday afternoon.

The Video Lottery Facility Location Commission also could move ahead with plans to reopen bidding for the gaming license for Baltimore, even though the site remains the focus of a legal tussle.

“That is certainly an option for us to consider,” commission chairman Donald C. Fry said. “We do, however, need to think about what the ramifications would be.”

The state’s foray into casino gambling in late 2008 coincided with the country’s descent into recession, and the credit crunch that stalled countless construction projects. There were few bidders for Maryland’s five authorized gambling licenses and nearly two years after voters authorized slot machine in the state, the licenses to operate casinos in Rocky Gap and downtown Baltimore remain unclaimed.

The commission threw out the lone Baltimore bid it was considering in December after Baltimore City Entertainment Group LP missed a series of self- and state-imposed deadlines to file updated proposals and $19.5 million in license fees. BCEG, led by Canadian homebuilder Michael Moldenhauer, filed an appeal shortly afterward.

The state Board of Contract Appeals has not yet set a hearing date.

Commissioners could decide to open the Baltimore license up to bids from other developers. But, Fry cautioned that the pending litigation injects uncertainty into the process and could have a “chilling effect” on bidders.

“We’re very confident of our legal position, but with the cloud of litigation hanging over it, [other developers] may not want to bid when the certainty isn’t there,” Fry said.

Earlier this year, lawmakers sweetened the pot for developers potentially interested in the Rocky Gap location. If the holder of the gaming license agrees to buy the state-owned Rocky Gap Lodge and Resort, which has long operated in the red, the state will lower the tax rate on gaming revenues at the site from 67 percent to 64.5 percent. The state estimates the change to be worth $450,000 to $500,000 annually.

Two Maryland casinos are expected to open this fall. The first, Hollywood Casino Perryville, is scheduled to open Sept. 30. The slots parlor at the Ocean Downs racetrack has scheduled a Dec. 16 open date.

The Eastern Shore casino was expected to open Memorial Day weekend but was dogged by a series of construction delays, first asbestos and then problems with steel beams corroded by the salty ocean air.

“The steel, in some places, you could put your fingers through it,” said William Rickman Jr., owner of the facility.