By DYLAN WAUGH
ANNAPOLIS (Feb. 5, 2009)—The commission evaluating the state's slot machine bidding process should consider starting over, said Senate President Thomas V. Mike Miller Jr., D-Calvert, Thursday.
The criticism came during a week of disappointing news about Maryland's effort to bring slot machine gambling to the state. The Video Lottery Facility Location Commission received only six bids—two without the required payment—for fewer than half of the 15,000 slot machines allowed by the referendum approved in November.
Miller suggested the commission, led by Donald C. Fry, should recommend to lawmakers potential changes in the process, mentioning re-doing the bidding process as a possibility.
"I'd have to believe that the bidding process at the present time is in disarray," Miller told reporters following Thursday morning's Senate session.
The commission is scheduled to meet Feb. 12 to discuss the bids. It is required to hire a consultant to assist with the process.
Later Thursday, Miller appeared to back off his comments in a statement released by his office.
"Despite our disappointment with the initial results, we must give the commission and its consultant time to assess the situation and offer informed advice before we consider any legislative revisions to the process," he said in the statement.
House Speaker Michael Busch, D-Anne Arundel, prefers to let the commission go ahead with its scheduled evaluation process, said Alexandra Hughes, a Busch spokeswoman.
"The commission has not even met yet to formally consider the bids," she said. "We will wait and see what the commission's formal recommendation is."
Some lawmakers have suggested changing the revenue-sharing formula, which currently awards one-third of slots proceeds to operators and two-thirds to the state, to attract more bids. Such action would need to be done by the legislature.
Delegate Steven Schuh, R-Anne Arundel, wants a market-based bidding process rather than the "arbitrary and prescriptive" state tax and fee schedule. Under such a system slots developers might come in with competing revenue-sharing formulas.
Schuh called the chances of the General Assembly re-evaluating the issue "fairly high."
"My expectation is that the legislature is going to have to revisit the enabling legislation," he said. "In effect, it's a do-over."
House Majority Leader Kumar Barve, D-Montgomery, disagreed.
"I think it's unwise and unfair" to consider revisiting the issue, he said. "We established policies, some companies complied with it. If they are valid bidders, then they should win."
Fry announced Monday the state had received bids and accompanying fees for 10,550 of the 15,000 machines available at five statewide locations. Tuesday, Fry revised the total to 6,550, citing a misunderstanding with one of the bidders.
The low number of bids could jeopardize the $600 million state leaders had hoped slots could produce annually for education.
Part of the controversy stems over the two bids, for 3,750 total terminals, that were submitted without payment.
Miller criticized one of those bidders, Magna Entertainment Corp., for failing to include the required fee with the 3,000-machine proposal made by its subsidiary, Laurel Racing Association, at the Laurel Park race track.
Magna announced Wednesday it has $28.5 million in an escrow account and will turn the money over to the state under the condition that the commission refunds the amount if Magna fails to receive necessary local zoning authorization.
"Magna needs a new set of lawyers," Miller said, calling the decision to put the money in an escrow account "nonsense."
Spokespeople for Magna could not be reached for comment Thursday.
Anne Arundel County Executive John Leopold, a Republican, said he's preparing legislation to facilitate slots at either Laurel Park or the Arundel Mills Mall, the site of Baltimore-based Cordish Companies' 4,750-machine proposal, in case one of the bids is approved.
"Even though I've been a long-standing opponent (of slots) ... the voters in the county and the state spoke very clearly," he said. "I don't think it's appropriate for me to step on the voice of the people."
Fry, speaking on WYPR's "Midday with Dan Rodricks" radio show Thursday, said his commission will discuss Magna's bid during its Feb. 12 meeting.
Despite the struggle with Magna and the state having only four complete bids, Montgomery County's Barve doesn't think there is a need to revisit the process.
"Suppose we put something on eBay and asked for $10,000 and one person bids," he said. "What are we going to do, lower the price to $8,000 and hope more people bid on it?"
Capital News Service Staff Writers Michael Frost and Erich Wagner contributed to this report.