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Rocky Gap Bidder Wants Law Change, Withholds Required Fee

Rosalind Helderman

A representative for the New York-based company that put in the only bid to operate slot machines near the Rocky Gap resort in Allegany County said this morning that its bid is contingent on a difficult legislative change that would restructure how slot revenue would be shared with the state.

While the company waits to hear if the state is willing to negotiate on the point, the representative said Empire Resorts, which has formed Empire Rocky Gap LLC to bid on the site, submitted no licensing fee to the state, as required by law.

Michael Leahy, an attorney representing the company, said its bid proposes changing the percentage of slot revenue retained by operators, which was set by the legislature at 33 percent. It is one of the lowest such rates in the nation.

Leahy said to make the bid economically viable, the company needs to retain more profit. The proposal suggests a graduated scale as the facility, which would open with 750 slot machines, gets off the ground. Until it hit $50 million in sales, the company would retain 75 percent of profit. Once it hit the $50 million threshhold and until it made $100 million, the company would keep 50 percent. After $100 million in sales, the company would keep only 25 percent of further profit.

"If the state is not willing to do that, our best and brightest minds don't have a way to make this work economically," he said.

The bid is also contingent on the state agreeing to enter negotiations to sell the state owned resort at Rocky Gap to the company--a point the state has previously said it is willing to discuss. The resort has lost money for years and is not far from other slot parlors in neighboring states. Many have questioned whether any operators would have interest in opening a facility there.

Leahy said the company, which operates the Monticello Gaming and Raceway in New York, believes there are opportunities at Rocky Gap--but not under the strictures of Maryland's new slot legislation.

"In the discussion with folks from the state, we thought it was important to put forward what we though was our reasonable best case," he said. "If they want to negotiate on that basis, we're ready to move forward. And if they don't, we gave it our best shot."

He said the company has the licensing fees ready to submit to the state at any time but declined to do so immediately without some indication that the state would not reject the company's proposal out of hand.

By Rosalind Helderman  |  February 3, 2009; 9:42 AM ET
Categories:  Rosalind Helderman , Slots  
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Comments

I can feel the money slipping out of the paychecks of this area of high unemployment already. Rocky Gap used to be a beautiful state park. Then they built a "resort," for which there was little demand. Pittsburg Plate Glass and Bausch and Lomb left. The folks out that way even asked that a prison be placed in the area to provide jobs.

Posted by: robinfickerofrobinrealty | February 3, 2009 2:06 PM | Report abuse

I think a lot of people voted yes for this because we were told it would provide revenue for the state.

But now the corporate interests are wanting to take our revenue.

I think not to build it.

Posted by: RedBird27 | February 3, 2009 4:16 PM | Report abuse

"I think a lot of people voted yes for this because we were told it would provide revenue for the state."

Whaaaat? A politician lie? That's unpossible!

Posted by: fonkyou | February 3, 2009 4:52 PM | Report abuse

Ouch! Way to go, Martin!

Posted by: tcs1999 | February 3, 2009 4:59 PM | Report abuse

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