Slots contract was reasonable, state official insists

The Maryland State Lottery Agency has been conducting a media tour in recent days to push back against the notion that the state grossly overpaid for slot machines to fill a Cecil County casino scheduled open this fall.

Last week, a divided Board of Public Works approved contracts valued at almost $50 million to purchase and lease more than 1,062 video slot machines for Hollywood Casino in Perryville. It will be the state's first slots casino, and the venue is now scheduled to open Sept. 30, a few weeks before Gov. Martin O'Malley (D) is up for re-election.

The Lottery Agency has taken considerable flak since last week -- including some from former governor Robert L. Ehrlich Jr. (R), on his Saturday radio show -- largely based on news reports that the state is paying $46,000 per machine, far above industry standards.

On Thursday, the agency released a pair of analyst reports suggesting there has been great confusion over the cost and that what the state is paying is reasonable. After stripping out maintenance fees, software updates and other assorted expenses, the true cost per machine is somewhere between $13,000 and $21,000, according to one of the analysts, Stifel Nicholas Gaming & Leisure.

"This notion we've been taken to the cleaners by the gaming industry is not correct," said Lottery Director Stephen Martino, in one of several media interviews he conducted Thursday. "We thought we needed to be proactive in letting people know that."

Under the deals approved last week, Maryland will purchase 795 machines and lease another 267 for the Cecil County site, which is being developed by Penn National Gaming, just off Interstate 95 near the Susquehanna River. Another contract for the balance of the site's 1,500 slots will come before the board next week, Martino said.