Md. commission rejects Baltimore slots proposal

AP News
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Posted: Dec 17, 2009 5:57 PM

Maryland's slot machine commission on Thursday rejected a proposal to put a slots venture in Baltimore, dealing another setback to the state's efforts to expand gambling to raise badly needed revenue.

The commission voted 6-0 to reject the proposal by the Baltimore City Entertainment Group, which repeatedly missed deadlines to submit a revised proposal and an additional licensing fee to expand its initial proposal from 500 to 3,750 slot machines. The expanded number of machines was needed to fulfill a lease agreement with the city.

The Video Lottery Facility Location Commission will open up the site in Baltimore for new bids next year. Donald Fry, the commission chairman, said it's unclear when that could happen.

Michael Moldenhauer, a Canadian developer who hoped to be part of the venture, and Michael Cryor, a spokesman for the group, declined to comment after the decision, saying they need time to review options. The group could submit a bid again next year.

The vote came after members of the commission expressed skepticism about the proposal's progress.

Moldenhauer told the commission that an additional investor had been found in York Capital Management, an investment group that requested another 45 to 60 days to study the deal. But the commission's patience clearly had run out after repeatedly missed deadlines and an air of mystery that had surrounded the new arrangement for a long time.

Robert Neall, a commission member, bristled at Moldenhauer's assertion during a hearing before the vote that the proposal was on track to open the first slots parlor in Maryland, after three other proposals already have received licenses.

"This project has not moved, in the eyes of this commission, one millimeter since we met in August," Neall said.

The group has submitted $3 million in licensing fees for 500 machines in the city, but that money will be refunded. The developers needed to come up with another $19.5 million in licensing fees for 3,750 machines.

The proposal has gone through a running tangle of changes over the past year, with the announcement that York Capital would be an investor only becoming known in recent days. In the end, the commission decided the proposal was too full of doubt to grant another extension.

The commission also decided 2010 would hopefully be a better climate for new bids after the recession dampened bidding in February.

The vote came on a day with a flurry of activity about slot machines in Maryland.

With a county zoning vote pending as soon as next week for a slot machine site in Anne Arundel County, the Maryland Jockey Club held a news conference touting Laurel Park as a better location for slot machines than Arundel Mills Mall. But Laurel Park's owner, bankrupt Magna Entertainment Corp., failed to put up the $28.5 million licensing fee for 4,750 machines in February. A competing bid from the Cordish Co. did put up the money for the site near the mall.