Commission approves slot machines for golf resort in west Md.

Apr 30, 2012 10:16 AM

A Maryland commission approved a slot machine license Thursday for a casino at the Rocky Gap Lodge and Golf Resort in western Maryland.

Meanwhile, the owners of what will be the state’s largest casino in Anne Arundel County set a June 6 opening date.

The unanimous vote for the western Maryland site by the state’s Video Lottery Facility Location Commission moved the state a step closer to fulfilling its initial casino gambling plan that was envisioned more than four years ago — only to be held up by the recession’s impact on developing five casinos.

The license was awarded to Evitts Resort LLC. Lakes Maryland Development LLC, the parent company of Evitts, has agreed to buy out its business partner, Addy Entertainment LLC. Lakes Maryland Development is owned by Lakes Entertainment, which is based in Minnetonka, Minn.

The plan calls for 850 slot machines, with anticipated growth to 1,000 machines in the second year of operation. The site, which is the fourth to be licensed in Maryland, had the additional hurdle of being located at a remote lodge that has struggled for years.

"I think it’s struggled for a number of reasons, but I think that the addition of slots at that facility will add a lot of destination travel to the facility," said Don Fry, the commission’s chairman. Having a private-sector owner make a large investment there will likely help it prosper, he said.

The deal also has been complicated because the site is on state-owned land. The state’s Board of Public Works must still approve purchase agreements and a ground lease for the casino to be built. It is expected to be built in a 50,000-square-foot facility adjacent to the lodge within 18 to 24 months after the board signs off on the agreement.

Evitts has agreed to spend $54 million to buy the resort and make improvements to build the casino. The company already has put down a $2.1 million license fee for the first 350 slot machines. The license fee on the other 500 machines was waived to sweeten the deal after the site failed to draw interested parties.

The state also changed the way the proceeds would be allocated to make the site more attractive. The operator will receive 50 percent of the proceeds for the first 10 years and 33 percent in subsequent years. In the first 10 years, the state’s education trust fund is slated to receive about 42 percent of the money, with 2.75 percent allocated for local impact grants.

Analysts have estimated the site will make a total of about $40 million in the first year of operation with 850 slot machines.

The facility is expected to employ about 400 people during the construction period and about 520 workers when the facility is up and running.

So far, two casinos have opened in Maryland, one in Perryville off of Interstate 95 and another in Berlin near Ocean City on the Eastern Shore.

The owners of the state’s third and largest casino, Maryland Live! Casino at the Arundel Mills Mall in Hanover, announced on Thursday that it will open in Anne Arundel County on June 6. It will open initially with about 3,200 slot machines.

Caesars Entertainment is working on receiving a license to operate a casino in Baltimore. Fry said a license could be issued for the Baltimore site by the end of June. Fry said the commission hopes to receive background investigation reports on the proposal next month.

Currently, Maryland only allows slot machines at its casinos. However, state officials are talking about allowing table games like blackjack and roulette. They also are discussing allowing a sixth casino in Prince George’s County near the nation’s capital. Gov. Martin O’Malley this week said he is considering a special session in August to take up gambling expansion.

Adding table games and a sixth casino would require approval by Maryland voters in a statewide referendum.