Maryland officials hope Rocky Gap Casino fills gap for resort, area

By Kelly Cernetich

FLINTSTONE, Md. – Nestled in a valley by a lake, and surrounded by mountains whose trees are now tipped in red and gold leaves, Rocky Gap Casino Resort looks at first glance like the perfect spot for a quaint weekend getaway.

Visitors sporting visors and khakis play 18 holes on the state’s only Jack Nicklaus signature golf course, while a couple sits on the edge of a dock where the resort abuts Rocky Gap State Park and its 243-acre lake.

There are four on-site restaurants, a full-service spa and a pro shop, so that according to Rocky Gap officials the resort can provide amenities for all guests and live up to its “well suited” slogan.

But the real draw is undeniably the resort’s 24-hour, 15,000 square-foot casino, which is roughly the size of three college basketball courts.

It boasts 558 slot machines and 10 table games including blackjack, craps and Mississippi stud poker. Housed in Rocky Gap’s former conference space, it’s difficult to escape the allure of the flashing lights, whirring slots that hum and ding and the chance to hit a jackpot.

Since its May 22 opening, casino revenue has climbed an average of $1 million each month, and local government officials said it will provide a much-needed influx of visitors and money, a portion of which will be used to help financially strapped Allegany County.

But only four months in, it’s hard to tell whether the $35 million casino-spa-golf destination has dealt Pennsylvanians a good hand, with few businesses seeing more customers and only a handful of its residents employed there.

Most have said that while they’re hopeful, it’s too soon to tell whether the casino’s luck will rub off elsewhere.

10 years in the making

Before the casino, Rocky Gap was a lodge and golf resort. According to local news reports, the $54 million structure was built using mostly private capital, but also a hefty $16 million in state aid and a $4.5 million bond through Allegany County.

It was owned by the Maryland Economic Development Corp., a quasi-governmental organization whose directors hoped to bill Rocky Gap as a destination spot to help draw in tourism dollars.

It opened in 1998, but the tourists rarely came.

Aside from state officials using the resort for conferences and other events, business at Rocky Gap was slow, said Allegany County President Commissioner Michael McKay.

It was especially true of the Jack Nicklaus course.

“Locals thought it was only used for the ‘big boys’ coming up from from the Washington or Pittsburgh areas,” McKay said.

Over the years, Rocky Gap became a bottomless pit into which the county and state dumped money every year, just to keep the facility’s doors open, he said. Public financial statements show that the resort was operating at more than $10 million in losses the last three years it was owned by the development corp.

The debt from that period is still being paid back by the county through its hotel/motel tax, McKay said.

Even when it came time to sell, the process wasn’t easy. The license went through three bidding rounds before Evitts Resort LLC, a wholly owned subsidiary of Minnesota-based Lakes Entertainment Inc., won out with a $6.8 purchase price. According to a company press release, the deal for a 260-acre, 40-year lease agreement with the state Department of Natural Resources was closed in August 2012.

Before the project even began, Lakes Entertainment also had to scale back its plans. Company records show they planned to invest $65 million into the space to install 850 slot machines, with plans to expand to 1,000. Instead, they swapped out the conference space for casino space, and pledged to add meeting space within the next few years.

Luckily, though, demand and casino revenue was enough to get the expansion started early. Marketing Director Wanda Holtschneider said a replacement conference center the same size as the casino floor is scheduled to open this November.

Local hope

As part of the resort’s pilot agreement with Allegany County, a percentage of the casino’s profits will be used to support local fire departments, with additional funds equal to the amount the resort would otherwise be paying in property taxes, but can’t because they leased state land instead of purchasing it going toward a college scholarship fund for local high school graduates.

McKay said the agreement, so far, seems to be working out, and the first four months have been good. But, he added, it’s hard to tell what the casino’s impact will be.

“It’s not a clear picture. It’s an exciting picture … [but] the reality is that we need probably a good year to 18 months of records” to determine the casino’s true economic impact, he said. “We’re an economically challenged area. Rocky Gap, we felt, was just a big boulder we needed to get rolling” to attract people to the area.

The county seat of Cumberland city, which is roughly the size of Johnstown and economically distressed for similar reasons, was ranked last year as one of the 10 poorest cities in America.

The financial news website 24/7 Wall St. noted that 20 percent of all households live below the poverty line, and census data shows unemployment above the national average with housing prices significantly lower than the national average.

McKay admits that the county won’t be benefiting from added tourism for the next several months, but said the exposure of advertising a destination in Allegany County is invaluable. He said he is hopeful that an attraction like Rocky Gap will have a positive impact.

“That’s advertising dollars that [the county] didn’t have in our resources” before, he said. “I believe that with the pebble effect, those ripples will be coming.”

Financial reports show McKay is probably right.

Open only 10 days in May, a state Lottery and Gaming Control Agency report shows Rocky Gap generated over $775,000 in revenue that month and boosted gross revenues for the state.

Although a year-to-year comparison for May showed an overall revenue decrease, the report also noted that Rocky Gap and Maryland Live casinos, which opened in June 2012, brought a year-to-year net benefit to the state to the tune of $36,599,254.

The numbers get better each month. Agency reports show that Rocky Gap generated close to $2.5 million in revenue in June, nearly $3.5 million in July and over $4 million in August.

The 2013 fiscal year report, which came out in July, showed that casino growth more than made up for a 2.2 percent dip in traditional lottery sales, with casinos bringing in 27.6 percent more revenue to the state than last year, with $829.54 million going toward the state’s general and education trust funds.

“With the growth of Maryland’s casino industry, the decrease in traditional lottery sales this past fiscal year was not unexpected,” said agency Director Stephen Martino in a press release. “However, the good news is clear: When combining traditional lottery and casino gaming revenue, there is a significant increase from the previous fiscal year in the amount of money generated for the state.”

Whether that good fortune has rubbed off on Maryland’s northern neighbors, however, is unclear.

Business is good

Holtschneider said between 30 and 50 resort employees are from the Bedford area, comprising between 5 and 10 percent of Rocky Gap’s 500-plus workforce.

Hotel Front Desk Manager and Bedford resident Amy Rowser said the casino has had a positive impact on the area, noting employment opportunities and the proximity of the resort to her hometown.

“I was born and raised in Bedford County … A lot of people are discussing how Rocky Gap is an improvement to the area, and a lot of people do come down to the area,” she said.

With her total daily commute of about an hour, Rowser said she plans to stay in Bedford County and hopes to see more people from the area take jobs at Rocky Gap.

Holtschneider also noted that while a lot of people stay at overnight at the resort, there are bus tours coming from Bedford and Altoona several times a week.

Even on a Wednesday afternoon the resort is bustling with activity, with rows of people crowding at the slot machines and spectators sipping cocktails waiting for their turn at the blackjack table.

“Our volumes are like this all the time,” Holtschneider said. “This is actually very mild.”

Resort officials wouldn’t provide data on how many people come through the casino on average, but Holtschneider said ownership is “definitely pleased with the current production, the current results.”

She also said the resort’s target demographic falls within a 90-mile radius of Rocky Gap, putting cities like Altoona, Morgantown, W. Va, and Hagerstown, Md., within its scope.

“That’s where we see the most interest,” she said.

Fred Lipkin, marketing director for Hollywood Casino at Penn National Race Course in Dauphin County, said the casino opening hasn’t impacted business much.

“We haven’t heard any conversation from our guests about it,” he said, and geographically Rocky Gap is on the fringe of Hollywood Casino’s market.

“If it has had any effect at all, it would have had to be in the nether regions of our western zones” which would include Hagerstown, he said.

Representatives for Lady Luck Casino at Nemacolin Resort in Fayette County and Rivers Casino in Pittsburgh did not return calls for comment.

Too soon to tell

While things may be looking up in Maryland, Bedford County businesses have yet to feel any casino luck rub off on them.

Only one restaurant near the I-99 and Route 220 interchange, the route most in the region would use to reach Rocky Gap, has employees who said business was better because of Rocky Gap.

A waitress at Bedford Diner said owners told her they had noticed a difference, but couldn’t elaborate on how much more foot traffic the diner has received in recent months.

For nearby businesses, the news hasn’t been as good.

Neither managers at Clara’s Place Restaurant & Lounge and Salsa’s Mexican Grille said they’ve seen more business since Rocky Gap has opened.

And Tom McDevitt, longtime owner of Ed’s Steak House, said business has been worse.

McDevitt said he believes there have been people who stopped at his restaurant for a bite to eat before heading on to Maryland, but the change is imperceptible and hasn’t helped.

“Overall … the business this year is down,” he said. “It’s not as good as it was the year before.”

He said when he heard of the casino’s opening, he thought it might lead to more business, but he’s not relying on it to bring in customers.

He pointed to Bedford’s annual Fall Foliage Festival, set to kick off its 49th year next weekend, as an event that has had a measurable effect on business.

“It’s one of the greatest things that’s happened to our area,” he said. “I’m hoping that I can tell you [in six months] ‘Yep, [the casino’s] been wonderful for us.”

Kellie Goodman Shaffer, executive director for Bedford Chamber of Commerce, said she too has failed to see a positive impact on tourism thus far.

“I have not heard a lot of people talk about it, other than saying that they go” to the casino, she said.

Beyond having Rocky Gap as a member of the chamber of commerce, Shaffer said she doesn’t have any data showing more people are coming through the area.

Calls to the Bedford County Visitors Bureau were not returned.

Shaffer noted that the county itself is a destination, and not a conduit for people to pass into Maryland.

However, she said the resort may do more advertising with the county in the future, and more regional business in general should benefit Bedford.

“On a regional basis, a lot of tourists plan multiple-night stays and they may cross county lines to do various things in different counties,” she said. “I could see that being something positive to Bedford County.”

Mirror Staff Writer Kelly Cernetich is at 946-7520.