The Rocky Gap Lodge & Golf Resort in Western Maryland would shut down by 2013 if slot machines are not working by then, said Bob Brennan, executive director of the Maryland Economic Development Corp.
"We're looking down the gun barrel," Brennan told the Budget and Taxation Committee on Tuesday. "If [investors] came in tomorrow and said we're gonna do a fire sale, I'll be sitting there helping them light the match."
Rocky Gap is one of the sites for slot machines Maryland voters approved in November 2008. The state has issued licenses at three of the approved sites but has failed to secure contracts for two— including Rocky Gap.
Sen. George C. Edwards, R-Allegany County, and Del. Herman L. Taylor, D-Silver Spring, urged the budget committee to change Rocky Gap's slots contract to make it more appealing to contractors.
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Taylor said Rocky Gap is a hard sell because its gross revenue is one-third that of sites in Baltimore City and Anne Arundel County, according to a fiscal analysis.
Baltimore and Anne Arundel slots are projected to gross $315 per machine each day, compared with $115 at the Cumberland resort, which is owned by the state. Another issue is that the contractor must buy the resort's 400-room Hyatt Regency for $35 million to $45 million -- in addition to a $25 million deposit to secure a slots contract -- if it wants to put the slot machines in the hotel, Edwards said.
To make up for Rocky Gap's shortcomings, Edwards is pushing a bill that would eliminate the $25 million deposit requirement for slots contracts.
"We think it should get some preferential treatment," Edwards said.
Taylor pushed for amendments to Edwards' bill that would slash the state's profit share at Rocky Gap.
The state is set to rake in 67 percent of slots revenue for all five sites, leaving a 33 percent share for the operating company. Taylor's amendment would drop the state's share to 60 percent for Rocky Gap -- a percentage that would increase with time, as the site began bringing in more money.
The state has invested $20 million in Rocky Gap since its inception in 1985, and private investors have financed $40 million.
Brennan said the resort is hitting the age when it needs "major investments to keep the facility fresh," and will become a larger burden on the state.