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February 13, 2009

State rejects New York group’s Rocky Gap slots proposal

Bidder failed to include $4.5 million licensing fee

CUMBERLAND — The state commission on slots on Thursday rejected two of the six bids received for proposed slots parlors, including one for 750 machines at Rocky Gap State Park, for failure to include the necessary $4.5 million licensing fee.

Donald C. Fry, chairman of the state Video Lottery Facilities Location Commission, said he and the six other members voted 7-0 to reject the bid from Empire Resorts Inc. of New York, which had formed Empire Rocky Gap LLC for purposes of its bid submission.

The discussion lasted approximately 90 minutes and took place at the Department of Legislative Services building in Annapolis. Fry said the commission is required to “be consistent with the competitive bidding process.” As such, he said, “if you did not meet the minimum requirements, then your proposal would not be considered.”

Empire Resorts submitted a contingent-based bid that rested on state lawmakers’ willingness to alter the tax rate. Existing law, passed during the November 2007 special legislative session, allowed the state to collect 67 percent of the proceeds, leaving the operator with 33 percent. The tax rate is one of the highest in the nation.

Charles Degliomini, senior vice president of corporate communications and government relations for Empire Resorts, told the Times-News last week that his company “wasn’t interested” if the Maryland General Assembly wasn’t willing to reconsider the tax rate.

That’s the primary reason why Empire Resorts didn’t submit the $4.5 million licensing fee as required by statute and the request for proposals. Fry said two lawyers, Bonnie A. Kirkland and Robert Fontaine, both from the Attorney General’s Office, conveyed that the commission “did not have the authority or discretion” to consider those bids.

Fry said he wasn’t aware of an appeals process but seemed confident lawyers from both sides would “look at that situation.” Meanwhile, he said, “we’re moving forward with just those four proposals until we hear otherwise. We feel that’s the proper action to take.”

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