Investors are hopeful Maryland lawmakers will consider a proposal to build a slot machine parlor off the Virginia coast and over Southern Maryland waters should they reconvene in July for a second special session to address an expansion of gaming in the state.

With less than two weeks remaining in the legislature’s regular session, Charles County lawmakers in March submitted legislation authorizing a slots parlor at the Riverboat on the Potomac, a restaurant in Colonial Beach, Va., which juts out over the Potomac River.

A colonial-era agreement gives Maryland jurisdictions legal control of the entire Potomac, with Virginia control beginning at the Virginia shore.

Proposed by Virginia company Blueridge Ventures, the casino could support 600 slot machines within six months of approval and eventually expand to 1,500 slots.

But the bill never received serious consideration as lawmakers, working frantically in the session’s waning hours to pass a budget plan that would avoid more than $500 million in cuts, never took a final vote on any gambling legislation before adjourning April 9.

“No gaming bill got through [the regular session]. We were kind of the little caboose at the end of the train, and the train never left the station. People were just concentrating, and rightfully so, on other issues,” said former Charles County delegate Murray Levy, who now represents Blueridge Ventures as a lobbyist for Annapolis firm Alexander & Cleaver.

Lawmakers returned to Annapolis last week for a special session to finish work on a $35.5 billion budget for fiscal 2013. Amid Republican opposition, the Democratic-controlled legislature passed a spending plan which included income tax hikes on higher earners and will shift a portion of the cost of teacher pensions to Maryland counties.

During the regular session, Senate President Thomas V. Mike Miller Jr. (D-Calvert, Prince George’s) pushed legislation to expand gambling to include Las Vegas-style table games at existing slots sites and an additional casino location in Prince George’s County. But the measure was not brought to a final vote in the House before the session adjourned.

Critics accused Miller of effectively holding the state’s budget bills hostage until the gambling bill passed, a charge that Miller repeatedly denied.

Lawmakers opted to only consider budget matters last week and put off any gambling-related issues until a possible second special session.

On Monday, Gov. Martin O’Malley (D) announced that members of a work group will meet next month to study a potential expansion of gaming in the state.

“It became evident in the 2012 legislative session that the issue of gaming should be examined in more detail,” O’Malley said in a statement.

The work group includes three senators, three delegates and four members of the O’Malley administration.

Senators include Richard Madaleno (D-Montgomery) and Nathaniel McFadden (D-Baltimore), who co-sponsored the gambling bill Miller pushed for in the regular session, as well as Budget & Taxation Committee Chairman Edward Kasemeyer (D-Baltimore County, Howard).

Delegates include Ways and Means Committee Chairwoman Sheila Hixson (D-Montgomery), Peter Hammen (D-Baltimore) and Frank Turner (D-Howard), who chairs the gambling subcommittee and has been skeptical of expanding slots in the state.

Administration members include Chief of Staff Matthew Gallagher, Secretary of Budget and Management T. Eloise Foster, Secretary of Appointments Jeanne Hitchcock and O’Malley policy adviser Joseph Bryce.

The group will be chaired by John Morton III, whom O’Malley appointed to chair the Maryland Stadium Authority in 2008.

“I think everyone’s going to go in with an open mind,” Madaleno said. “I don’t think [the governor] has any specific plan in mind as of yet.”

If consensus is reached, the group likely will propose legislation for a second special session to be convened July 9.

This could open the way for the slot machines on the Potomac River. “This is a fresh opportunity,” Levy said. “I think what makes this more viable in terms of the session itself is that [gambling is] all they’re going to be considering.”

The Riverboat on the Potomac restaurant, which holds a liquor license and pays property taxes in Charles County, currently offers off-track betting and Maryland Lottery games.

Colonial Beach featured offshore slot machines for a brief time in the 1950s, before Maryland banned such riverside gambling.

“If the issue is going to be gaming, I’m going to see if I can make Colonial Beach part of that discussion,” Del. Sally Y. Jameson (D-Charles) said.

According to a company-funded study, the Colonial Beach casino would generate estimated annual revenue of $5 million for Charles County, which “just so happens” to be near the projected $5.5 million the county will need to pay annually toward teachers’ pensions by 2017, Jameson said.

“I firmly believe that our county is going to need that money and that our taxpayers would rather see it come from a gaming operation that really doesn’t affect our county rather than out of their own pockets,” she said.

The Blueridge Ventures study also estimated the casino would generate $46.5 million annually for the state, which could help address the $500 million structural deficit the state faces next year, Jameson said.

“The argument is Maryland needs more money. Here it is sitting on the table. Help us get you this money. Forty million can buy you a lot of government,” Levy said.

But in order to reach a consensus, lawmakers would need to be sure expanded gaming would benefit the state financially while mitigating any loss in revenue to planned casino sites in Anne Arundel County and Baltimore.

The study asserts that 91 percent of the customers at the Colonial Beach casino would come from outside of Maryland.

“The big argument that went on during the regular session, which was a justifiable concern, was how any new casinos would affect the existing casinos,” Levy said. “That’s what makes our proposal so unique — only [9] percent of the revenue would come from Maryland.”

Levy said investors will make their pitch for the Colonial Beach casino when the state work group holds its first meeting June 1.

Additional meetings have been scheduled for June 12 and 20.

“I think we have a very strong case,” Levy said. “Normally you have to prove why you should do something, but I think with this it becomes so obvious that the question really becomes ‘why not?’”

Though nothing has been officially announced, some lawmakers are expecting to be called back to Annapolis for a second special session.

“I think the plan is we will be called back on July 9,” Jameson said. “I think certainly there would have to be a deal almost worked out. If they’re going to call one, they’re going to know the outcome.”

She is concerned, however, that lawmakers may look to sneak other issues or pet projects into a second special session.

“I’m worried it has the potential to open a whole realm of issues to be discussed,” Jameson said. “I imagine there’s going to be a little bit of horse trading going on.”

Del. Peter F. Murphy (D-Charles), the only Charles County lawmaker to leave his name off the bill proposing the Colonial Beach casino, would prefer the legislature address any gambling issues during a regular session.

“I have no idea what they have in mind, but with something as major as this, I would think you would want to give it the time it deserves, so it seems to me it would be better handled in a regular session,” he said.

Murphy is also concerned about putting another issue up for a vote on the 2012 election ballot, which will already include a referendum on a bill authorizing in-state tuition rates for some illegal immigrants and could feature ballot questions regarding same-sex marriage and redistricting.

jnewman@somdnews.com

dleaderman@gazette.net