June 9, 2010

State approves last-minute slots deal

Print More

By Andy Rosen
Andy@MarylandReporter.com

A divided Board of Public Works approved a $49 million contract to buy and lease slot machines for a Cecil County facility scheduled to open late this year.

Comptroller Peter Franchot objected strenuously to the deal, which was submitted to the state spending panel late Tuesday. The deal will pay for 1,062 slot machines from six suppliers, and lasts nearly five years.

The BPW also approved an extension of the deal that puts Baltimore Ravens logos on state lottery tickets, as well as the transfer of the Pride of Baltimore II to a private nonprofit. The clipper ship replica makes its home in the Inner Harbor, but regularly travels abroad to promote area tourism and shipping.

Maryland Port Administration Spokesman Richard Scher said the transfer will save the state $164,000 each year.

Franchot, who sits on the BPW with Gov. Martin O’Malley and Treasurer Nancy Kopp, complained that most deals are brought before the panel with much more notice. He asked whether the decision could be delayed, but lottery officials said that could jeopardize the on-time opening of the Perryville slots parlor.

“Why were you so late in bringing this to the board?” he asked at the Wednesday morning meeting. “Why is it so important that we approve this today, with less than 24 hours to review it?”

Lottery Director Steve Martino said the contract was late because of lengthy negotiations to lower costs and add more minority participation in the deal. The state had originally planned to approve contracts for all of Maryland’s 15,000 allowed slot machines at once, but decided to break it into chunks amid objections from the the board.

“In some cases, our final offers did not come until this morning,” he said, adding that extended negotiations saved the state at least $3 million.

Franchot was a prime proponent of breaking up the contracts. He was the only person to vote against the Cecil County deal approved Wednesday. The facility will be run by Penn National Gaming.

According to BPW documents, the state is buying 795 video lottery terminals for the facility, which will be called Hollywood Casino. The state will lease the remaining 267. A large portion of the cost of the contract comes from maintenance for the machines. That is likely to come to at least $6.7 million.

Minority contractors objected to the deal, which will send about 20 percent of the contract to minority and women-owned subcontractors. The state’s goal had been 25 percent, which officials described as “very ambitious.”

O’Malley and other officials said last week that the state has finally met its goal of 25 percent minority participation in all state goals, but the goal has seldom been achieved for information technology contracts.

Wayne Frazier, who heads the Maryland Washington Minority Contractors Association, urged the board to put off approval of the contract for a few weeks to see if the contractors could find additional minority partners.

Gov. O’Malley said the deal has waited long enough, and the state needs the revenue slots are projected to bring in.

“I think 20 percent is a good, solid goal,” he said. “I would like to see this location up and running as soon as possible.”