I wasn't surprised to hear last week that the opponents of Cordish's Live! casino at Maryland's Arundel Mills Mall submitted the required number of signatures last week to move forward on a local referendum to overturn the zoning approval.  Funded by the Magna-affiliated Maryland Jockey Club, of course they would get signatures still hoping for a switch to Laurel racetracks. 

But, of course, there may be some problems with the signatures and Cordish intends to challenge the process legally.  Certainly makes sense given the substantial investment it has in the project already - and long-term interest in the property:

Joseph Weinberg, a managing partner at the Cordish Cos., said that there are "massive irregularities" in the petition drive. "Upon review, we are confident the referendum will be struck down as both legally invalid and lacking in the requisite valid signatures," Weinberg said.

So who knows at this point whether the referendum will actually come off, based on the coming legal investigation and what may happen consequently.  Of course, the anti-Cordish crowd already has a history that lacks some credibility: for months we heard that they were going to sue if zoning was approved based on some homeowners covenants of people living near the mall.   And they used that threat at every opportunity to try to block zoning, to try to block license approval and lost.  So far, at least, I know of no suit that has been filed along these lines, suggesting that it was basically a failed bluff the whole time.  Maybe some people thought they had a real case, only to find out that they didn't really have one.

So, what does the episode tell us, thus far in the process (a process that is far from complete)?  Here are two key points:

• gaming opponents and NIMBY-types can be shrill and misguided in their rhetoric, but still make a significant impact- gaming companies need to confront this opposition early and with all available resources
• in a closed gaming market like Maryland's, competition for limited site licenses will lead to collusion between gaming opponents and gaming interests in local situations such as Anne Arundel

From the Bloodhorse:

A Delaware bankruptcy judge Jan. 5 agreed to postpone Magna Entertainment Corp.'s sale of two horse racing tracks in Maryland and rejected a bid by the former track owners to lock up slot machine gambling rights at one site. Magna attorney Brian Rosen told Judge Mary Walrath that an auction of the assets of the Maryland Jockey Club, including Laurel Park and Pimlico Race Course, was being postponed from Jan. 8 to Jan. 21. The postponement came after attorneys for Maryland argued in a court filing Monday that Magna has not complied with an agreement promising that all bidders for the Maryland assets would be required to keep the Preakness Stakes (gr. I) at Pimlico, the second horse race in the Triple Crown, in Maryland.

 Apparently, Magna's potential bidders haven't formally agreed to keep the Preakness in Maryland to the state's satisfaction yet, and the state's attorneys are concerned.  As well, the Francis failed in its bid to gain any proceeds on any eventual gaming revenues from Pimlico or Laurel.

The last point stemmed from the 2002 profit-sharing deal that the DeFrancis family (via Maryland Jockey Club) and Magna made over future gaming.  Now, that's basically moot with Cordish's Maryland Live! casino project fully approved and moving forward in Anne Arundel. 

That deal never made much sense to me from Magna's financial perspective, and it intertwined gaming and Maryland horse racing from that point to some Marylanders.  That didn't help the cause of a successful gaming launch in the state, as the racing industry spiraled downwards between 2002 and 2009.    

Meanwhile, the Jockey Club is behind the rear-guard, petition effort to get a referendum up to block the Cordish casino in Anne Arundel County.  Right now, I think the prospect of that project stopping is remote.  

As predicted in this space last week, the Anne Arundel County Council finally (finally!) approved zoning for the Cordish Company's Live! casino at Arundel Mills mall.  With the county executive on record in support & the Location Commission having already approved the proposal, this was the last major hurdle blocking development.  Hopefully, the approval comes in time for Cordish to maintain its timeline for opening in mid-2011.  The council also approved zoning for an alternate gaming site, but that vote is meaningless with nothing else by way of proposal, bid or the legal possibility of two Arundel casinos.

Of course, I'm not naive enough to think the NIMBY and anti-gaming coalition that has delayed this voet for almost a year will simply fold up and walk away.  We should know soon whether the red-shirted coalition will make good on its legal threat to sue, based on some sort of homeowner's covenant that it claims will legally bar the development.  However, the Location Commission was also supposed to investigate this issue before proceeding, and it obviously didn't block approval at that level.

So, we'll see what happens, but tonight - a little celebration is in order: the Arundel Mills casino will give Maryland a great shot at  reaping anticipated state revenue and local economic benefits from gaming.

In Maryland and neighboring states, casino gaming and horse racing are intimately connected.  Many of the new gaming sites in the mid-Atlantic are actually racetracks that were retro-fitted with gaming, such as Delaware Park (Wilmington, DE) or Charles Town Races and Slots.  Or, gaming revenues are specifically directed to horse racing, such as for purse enhancement or track maintenance, as in Maryland, Delaware and Pennsylvania. 

That's understandable vie the gambling connection, though it also props up the fortunes of the regional racing industry: Delaware and Pennsylvania purses are almost entirely based on gaming revenues at this point.  Or, in other words, gaming subsidizes mid-Atlantic horse racing, just as the federal government subsidizes farmers around the country to grow or not grow certain crops.     

Today's news that there are actually six bidders for Magna's Maryland tracks & facilities (Pimlico, Laurel, et. al.) is good news for the racing industry, though its implications for long-term independence as a recreational activity remains unclear.  There's apparently enough interest in the bankruptcy auction, with accordant fire sale prices, for the sites to maintain Maryland racing. In all likelihood, this means the preservation of the Preakness Stakes at Pimlico in Baltimore.  Maryland's political leadership is probably smiling today -- maybe not so much concerned with the controversial use of eminent domain to buy the tracks, as the legislature enabled last April. 

And, whilst Laurel may yet end up with gaming according to current Maryland statute, there's a strong possibility that it won't.  So Cordish, Peter Angelos, and the DeFrancis family may yet wind up with fading, deteriorating tracks with no strong possibility of gaming (though a cash infusion when gaming begins in Maryland).  The auction is scheduled for  January 6-- supposedly (!) the Anne Arundel County Council will vote on Arundel Mills zoning on Dec. 21: will there be as many serious bidders if the council approves Cordish's proposal? 

Cordish's interest certainly looks like a hedge against a nay vote in the council, though Baltimore-based Cordish may have a sincere, hometown interest in the Preakness & Maryland racing.  If Cordish's Arundel Mills Live! casino does receive its zoning approval, then we'll see how many bidders actually go through to the auction in a serious way - that is with competitive bids actually designed to win the auction.  If not, the auction will be more about gaming prospects than racing: for the prospect of an open Arundel gaming site could very well be the entire attraction here, not so much the prospect of preserving Maryland's historic horse racing industry and culture.          

2009 will be partially remembered in Maryland gaming for a confounding cycle.  Every couple months, we seem to have the same thing in Maryland: a showdown in Annapolis when the Anne Arundel County Council meets to (perhaps) vote on a zoning bill for the Cordish Company's Arundel Mills - Live! - casino.  Perhaps -- because the bill has been pulled a number of times already before a vote and there's certainly plenty possibility that this could happen again.  But, maybe this time, we will actually have a vote, with the Location Commission on record giving tacit approval to the plan.  In fact, the Location Commission will also vote tomorrow on the Cordish plan, but has already given an unofficial approval: no drama there. 

Yet, there's a competing plan on the agenda as well & anything could happen with one councilperson recently recusing himself from the vote.  Undecideds still hold sway, apparently. The good news is that no one seems especially concerned by the all-but-promised homeowners' lawsuit if the council approves the voting, so that's good news for actually developing this casino if/when zoning is accomplished.  That will depend on various courts issuing injunctions to stop development: a questionable prospect. 

In listening to various points made by the opposition, I've been struck by something I've heard repeatedly: that the Arundel Mills casino shouldn't have be approved, because referendum voters expected slots at Laurel Racetrack.  In today's Baltimore Sun article, we read it again:

And many had expected that Laurel Park would house the slot machines that would revitalize the faltering horse racing operation there.

This argument is spurious: there was never any guarantee of that, it was never in the legislation, nor did any supporter ever suggest it was automatic.  And, anyone following Magna's deteriorating finances in 2008 (perhaps...Anne Arundel residents?) would realize that even if Magna came up with a viable bid (which it didn't), competition for the license was a strong possibility, a desirable possibility.  This is a disingenuous argument put forth by the NIMBY opponents. 

With Cordish's plan judged to be sound, its finances clearly solid, Maryland voters really deserve this casino-- with its golden location.  That secures maximum revenue for the state's educational system, the racing industry and a great boost to the regional economy. 

(Full disclosure: I've officially supported the Cordish plan in my capacity as a consultant with the Maryland Gaming Association).  

Finally, finally there's some positive momentum for Cordish's Live! casino development at Arundel Mills mall in the greater Baltimore-Washington DC area.   The Location Commission is now on record saying it won't necessarily wait until the Anne Arundel County Council acts on zoning to officially approve the site license.  Cordish has cleared its financial and legal due diligence, and its proposal has been well-received.  This is a big step towards resolving the chicken-egg stand-off that's been enabling the council opponents to delay the zoning change for many months.

Predictably and smartly -- Cordish execs are punching back hard against the ill-advised alt. proposal to zone the casino away from, well, just about everything in the area.  The persistence may finally pay off with a scheduled Dec. 7 council vote.  And now, the council will soon lose a persistent counsel critic of the Arundel Mills proposal when he soon becomes mayor of Annapolis.  

The homeowners near the mall appear ready to sue to block the project, so this is far from over.   However, the Location Commission and Power Plant Entertainment (Cordish's PPE) all have access to top-shelf legal advice and don't seem too concerned.  Meanwhile, the retail developer (Simon Property Group) that owns the mall has made a very public show of support, from hometownAnnapolis.com:

Goodman and Condon expressed frustration with what they consider to be a routine development situation. Residents around the mall fear the slots facility will burden existing infrastructure and endanger their quality of life, but the mall officials said the appropriate time to deal with those problems is in the development, and not zoning, process. The attitude that has been conveyed to us is just confusing," Goodman said. "(The object  ions) are being used as an excuse to not get to the point where they are addressed." They emphasized no patron will have to go through the separate slots venue to reach other stores and whatever businesses follow the gambling would have to be vetted by them and compete for limited space. "We did not want it to define the mall," Goodman said.

They're right of course: these problems will be worked out in development, and they are already off to an excellent start with the planning.  So we'll see-- the Live! casino certainly will contribute to the mall's reputation and definition, but too early to say whether Arundel Mills will be known mainly as a casino with mall in the future (a la Caesar's in Las Vegas), or mall with nearby casino.  Regardless, it remains the best spot for a casino in Maryland and needs to be constructed ASAP so that Marylanders will reap the benefits of gaming.

The first gaming operation will become reality in Maryland by mid-2010, when the Ocean Downs racetrack opens up with approximately 800 Video Lottery Terminals, as approved the other day by the Location Commission.  This is good news: that Maryland gaming is really moving forward, creating economic opportunity and will begin bringing revenue to the state (not much, but any will help right now, really). 

And, if Ocean Downs does open in by May or June to get summer beach traffic, Maryland will actually be doing fairly compared to other states by opening up the first casino/racino within @18-20 months from legalization (Nov. 2008).  Penn National's approval is probably coming soon & that will also be very good news-- better than Ocean Downs, for the more lucrative potential of its new 'Hollywood' casino in Perryville, MD.   But good news here doesn't translate into great news on Maryland gaming, in general.

The Baltimore Casino Entertainment Group has yet  to pay the additional license fee to max. its VLT bid to 3,750, as indicated in the Aug. 26 hearing in Baltimore. So far, it has only officially applied for a 500-VLT site, though with plans for the larger casino.  Meanwhile, there's still no zoning bill  in place for the 4,750 VLT Arundel Mills casino, and the exasperating chicken-egg situation appears in effect with the commission waiting on local zoning approval and the county council waiting on commission approval.  

The Arundel Situation has prompted this opinion from a recent Baltimore Sun editorial:

It's probably naive to hope that the sight of slots rising in Worcester County will inspire the Arundel County Council to finally make a decision. But when Maryland voters overwhelmingly supported legalizing slot machines in the 2008 election, they expected more than a few hundred machines on the far eastern edge of the state. They expected a successful, responsibly run program that would help fund state government without more tax increases. Arundel officials need to follow Worcester County's lead to get us there as soon as possible.

 The Sun's right - the Arundel county council should act soon, to fulfill the promise of Maryland gaming.  I would go further --however-- in light of what's changed in the mid-Atlantic gaming universe since Maryland voters approved gaming last year. 

Since then, all of the the state's neighboring gaming states have moved ahead on gaming: sports betting, table games, proposed new casinos, etc.  Because the political and constitutional process is complicated and lengthy, Maryland leaders really shouldn't spend too much time taking a wait-and-see approach: we've waited and we're seeing that Maryland gaming will need to be more competitive.  This means that officials should explore expanded gaming, a lower tax rate (to facilitate destination gaming resorts) and a real open-minded attitude towards gaming in the state's future.

I just left the open Location Commission hearing held for the Cordish Company's Arundel Mills casino (via the company's Power Plant Entertainment division) that began last Wednesday evening (9/9)......well it felt like it took that long.  In reality, the hearing lasted 3 hours plus, with lots of pro and anti testimony.  My general impression is that Cordish's gaming people- led by David Cordish & Joe Weinberg - have worked carefully with Arundel Mills' management to develop an attractive plan for the casino. 

Weinberg called the site one of the "great gaming sites"  in the US, not just Maryland.  At last week's meeting, Weinberg projected 4,000 jobs & $450 million in capital investment for the project, which will be similar to the recently-opened Indiana Live! casino.   Smartly, they've put forward a plan that doesn't incude a large-scale hotel resort, but rather will take advantage of the many existing hotels around the mall. 

Significantly, Weinberg noted that Maryland's 67% tax rate made it "impossible to replicate amenities" that would create a true destination resort.  So, like Baltimore's planned Celebration casino, there won't even be a hotel at PPE's Live!  This is a fairly major blow to Maryland's gaming plan, where the commission is evaluating the proposals on a variety of factors, including the ability of the project to be a "destination" resort more likely to bring in players from out-of-state.  Right now, the two largest and best-located casinos will not even have their own hotels: a limiting factor in creating a destination resort.  This alone should be red flag to Maryland officials who should be carefully monitoring and evaluating this process, with an eye towards future changes.   

In addition, the new Live! casino wil take advantage of the mall's major retail & entertainment features,  like Dave & Buster's & Nieman-Marcus.  Cordish will also build a parking garage and otherwise integrate the new casino into the existing parking lot of the mall, near the food court. On the gaming front, the new property will have a divided-up casino floor, with electronic table games already planned and projected annual gaming revenue of $600-700 million, bringing in approximately $450 million for the state.  Cordish plans to open the casino in December 2011.   

The commission's back-and-forth with Weinberg focused on the delayed zoning approval for Cordish's proposal.  The Anne Arundel County Council has refused to act on the zoning request for almost six months already and as of this writing, it is still not on the agenda, for meetings through Oct. 19 -- according to the council's website.  What comes first: the zoning approval or commission approval?  Weinberg said he expects zoning approval very soon, thus encouraging the Location Commission to act.  But the commissioners indicated clearly that they will not act without the zoning approval first. 

This chicken/egg situation is miserable: the longer this takes, the longer it will take to develop, the more revenue the state loses, lay-offs occur, people don't get the construction jobs, etc.

Of the four hearings on the new Maryland casinos, this is the only one with any public opposition to speak of.  Whatever is left of the state's anti-gaming movement has focused its efforts to block Cordish's proposed Live! casino for Arundel Mills Mall, but mainly the opposition was of the NIMBY form, with some anti-gaming rhetoric bandied about.  The good new for Maryland gaming, however, is that more supporters than opponents spoke and the supporters sounded much more well-informed, less shrill and more practical.  

However, a number of opponents in the neighborhoods near the mall also spoke of certain homeowners' covenants they had which (in their view) would legally bar the casino.  They basically signaled their intent to sue to block the casino, regardless of what the Location Commission or County Council do.  I don't know the all the legalities involve, but I wonder how far this case will really take them, or is just being used as a scare tactic, particularly against the Council.  In fact, at least two council members were at the open hearing -- including the new chairwoman. 

We'll see what happens here.  I don't want the Arundel casino to turn into another Philadelphia scenario (still playing out) and expect that it won't be: but that's clearly the strategy of the opponents right now: delay, delay, postpone, delay, threat, delay some more against the wishes of Marylanders and Anne Arundel residents via the 2008 referendum.

Big day for Maryland gaming today, with the Video Lottery Facility Location Commission holding its site visit and open hearing on Cordish Company's planned casino at Arundel Mills Mall.  The site visit begins at 3:30 at the mall's food court.  More details can be found on the Location Commission's website here. With 4.750 VLTs, the Anne Arundel casino will have close to a third of the total # of VLTs in Maryland, and is crucial to the success of Maryland gaming. 

Arundel Mills is located between Baltimore and Washington DC, not far from I-95.  In recent years, the mall has become an epicenter for Balt-Wash. retail and entertainment: a hub for the region and good place for a casino, really. I haven't seen the details of the proposal yet, and am really looking forward to the un-veiling today.  

There's been no public opposition at any of the previous open meetings for the Maryland facilities (Cecil Cty, Worcester Cty. & Baltimore).  That will change today.  A combination of NIMBY-driven activists and anti-gaming extremists have been running a spirited and rather well-organized campaign to block the application.  Whatever remains of the anti-gaming movement in Maryland active in the 2008 referendum campaign has focused its efforts here.  The group has been showing up in force in similar red t-shirts at Anne Arundel County Council meetings to oppose zoning for the casino and are planning to come today.  The site's zoning approval has been tied up for almost six months in the council. 

I'll be there later to support the proposal in my capacity as an adviser to the Maryland Gaming Association.  Should be quite a day -- this showdown has been building for some time.

Well, at least that's the name of the planned casino by the Baltimore City Entertainment Group (BCEG).  Here's some details from BCEG's proposal, up for consideration by the location commission with a decision due this Fall (also pending the financial investigation).  Some highlights, learned from yesterday's public presentation:

• BCEG has already done a lot of planning work with various city agencies: traffic, police, planning, etc.
• BCEG plans a mid-2011 opening
• the Baltimore Development Corp. (BDC) is firmly behind the proposal & supports the switch in venue
• according to BDC, BCEG controlled the rights to various properties in the casino development region from the get go
• the casino will be called "Celebration" and have a Baltimore theme: history, architecture, tourism, etc.
• the 90,000 square foot casino will have 3,750 VLTs and BCEG is planning to submit the remainder of the application fee
• a shuttle bus service to/from downtown Baltimore hotels
• the plan includes a five-level parking garage across the street (Warren St)
• it will have four restaurants and be visible from both M&T Bank Stadium (Ravens) & Oriole Park (Camden Yards)
• traffic is a concern - BCEG is wroking to make sure traffic will flow easily around
• the facility will create 926 direct FTEs, 2,332 construction jobs and approximately 6,292 multiplier-effect (indirect) jobs
• projected revenues @$500 million in 2011 to @$650 million in 2015
• any potential chemical contamination on the site -- formerly Maryland Chemicals- should be alleviated with remediation, inclulding a vapor barrier under the foundation

Yesterday's site visit & hearing was relatively smooth: again no public opposition to the project (like Cecil Cty. & Worcester).  The commission was very open and relatively friendly to all presenters, in some contrast to Penn National's hearing of Aug. 13, which had some contentious moments over the outstanding application fee.  Some commissioners did raise some good questions over the somewhat rosy revenue projections & there will be follow-up on this with the commission's consultant and BCEG's analysts who developed the numbers.

A focal point of the concern has to do with potential competition with Arundel Mills -  I'm wondering if the revenue projections assumed a Laurel racino, thus reducing head-to-head competition between the two properties?  Arundel Mills Mall is closer and much more familiar to more Baltimore-area slots players than is Laurel racetrack.

Yet, there are still real questions here, with both Cordish and Laurel people expressing a viewpoint that bidding was unfair because of the site switch.  Legal action is still a possibility -- so like Cordish's Arundel Mills proposal, there's still a real chance of delays here, beyond the normal approval process.