Joop

1. May 27, 2009
Overview of the Process and Criteria for
Evaluating Video Lottery Facility
Proposals
Staff Presentation to the
Video Lottery Facility Location
Commission

2. 1
Overview of Evaluation Process
1
Spring/Summer Summer/Fall Fall 2009
Commission
Members
Individual reviews of
proposals, site visits and
public hearings, question
and answer sessions.
Staff to Commission
Assessment and analysis
of proposals across pre-
defined statutory criteria
and sub-criteria approved
by the Commission;
preparation of staff
analyses and reports for
the Commission.
Evaluation of
Proposals
Commission reviews staff
analyses and reports on
proposals and evaluates
proposals across statutory
criteria and sub-criteria.
Commission receives Lottery
Commission reports
on qualifications of applicants.
Commission
Decisions
Using individual
assessments of
proposals and staff
analyses/reports,
Commission makes final
decisions on license
awards, subject to local
zoning and permitting
approvals.

3. 2
Overview of Staff Analysis of
Applicants
• PricewaterhouseCoopers (PwC), in conjunction with the
commission staff, will analyze the applications to understand
the proposed facilities, and will visit each of the proposed
locations. Staff will also visit selected competitive facilities in
conjunction with the commission.
• Based on these visits, the information in the applications,
PwC’s experience and familiarity with facilities in other gaming
markets, and observations in the market analysis described
below, staff will prepare comments on each applicant’s
proposed location, facilities, and project viability.

4. 3
Applicant Analysis – Benchmarking
• PwC will prepare several benchmarks to
support the commission’s analysis of the
applicants
• It is anticipated that the following research
would be summarized in documents suitable for
use in working sessions with the commission

5. 4
Market Analysis Benchmarks
• PwC will prepare
– An analysis of the market area with a drive-time
approach
– Benchmarks on performance, including win per
position, at comparable facilities.

6. 5
Economic Impact Benchmarks
• PwC will prepare benchmarks of casino gaming
economic impacts, including direct and indirect
employment, wages and benefits, and taxes

7. 6
Levels of Analysis
• All three levels of analysis will be performed within the
context of the statutory criteria
– Level 1 – PwC Benchmark Research and Applicant
Reporting
• PwC will conduct benchmark research and analysis to
support the assessment of the applicants
• The staff will analyze the applications to identify key
information and prepare for the assessment

8. 7
Level 2 – Applicant Assessment
• Applicant assessment will be conducted on the
basis of the statutory criteria, which have been
expanded to identify key measures that can be
evaluated
• Applicant assessment will be conducted
utilizing a standard, pre-established analysis
format approved by the commission

9. 8
Level 3 – Staff Report and Supporting
Documents
• The staff report, which will be used by the
commission for decisionmaking purposes, will
be based on the detailed assessment of each
applicant (Level 2)

10. 9
Statutory Evaluation Criteria:
70% on Business and Market Factors
• The highest potential benefit and total revenues for the State, and potential
revenues based on a market analysis
• The extent to which Maryland gaming participants would remain in the State
and that a proposed facility would also become a regional/national tourist
destination
• Capital construction plans and competiveness of a proposed facility
• Gross revenues to a facility operator
• The percentage of minority business enterprise ownership and proposed
achievement of minority business participation goals
• The preservation of existing Maryland jobs and the creation of new jobs

11. 10
Highest Potential Benefit and Highest
Prospective Total Revenues to Be Derived
By the State
• Project viability (i.e., business plan with reasonable
expectation of success, including viable financial ratios)
• Tax revenues to the State and local jurisdictions for first five
years of operations from applicants
• Total VLT license fees
• Total project capital investment (as a measure of private new
capital invested in the State)
• Any other financial contributions to local government and
community organizations (e.g., funding improvements such as
lighting on public streets or contributions to nonprofits)

12. 11
Potential Revenues from a Proposed
Location Based on Market Analysis
• Estimate of applicant’s gaming revenues for the
first five years of operation
• Estimate of applicant’s total revenues (including
non-gaming revenues such as hotel, food and
beverage, and entertainment) for the first five
years of operation

13. 12
Extent to Which the Proposed Location
Encourages Maryland Gaming Participants
to Remain in the State
• Access to the proposed facility (e.g., proximity to
interstate)
• Regional competition (list or map of key competitive
facilities within a determined area)
• Facility attractiveness to satisfy Maryland gaming
participants
• Potential for a gaming facility at the proposed location to
retain Maryland gaming participants

14. 13
Extent to Which the Proposed Location Demonstrates
That the Facility Will Be a Substantial Regional and
National Tourist Destination
• Potential for facility to attract tourists, including branding, planned
marketing positioning, and marketing plans to attract tourists (e.g.,
planned target markets, planned partnerships with local lodging and
tourism facilities)
• Local tourism infrastructure (e.g., availability of facilities that can work
as mutual complements with the gaming facility to function as a more
attractive tourism destination, such as local lodging, meeting, food
and beverage, entertainment, golf, and RV facilities)
• Entertainment or additional attractions at the proposed facility (e.g.,
celebrity chef restaurants and performances by popular artists)
• Proximity to transportation infrastructure (e.g., airport, train station,
and bus terminal)

15. 14
Proposed Capital Construction Plans
• Capital construction plans
– Total project cost
– Project construction timeline (including timeline
of temporary and permanent facilities, and point
by which required level of investment will be
achieved)

16. 15
Proposed Facilities and Amenities
• Gaming features
• Non-gaming features
• Layout
• Design/theme/vision
• Access
• Parking
• Suitability of design to surroundings

17. 16
Competitiveness of Proposed Facility
• Hours of operation
• Player tracking system or frequent player programs
• Branding (e.g., Trump)
• Development experience
• Management and operating experience
• Branded food and beverage or shows
• Consumer protection policies and procedures

18. 17
Amount of Gross Revenues to Be
Allocated to the Operator Over the Term
of the License
• Percentage less than or equal to State
mandated maximum percentage of 33%

19. 18
Minority Business Enterprises
• Percent of ownership by entities meeting the definition of Minority Business
Enterprise (MBE) under Title 14, Subtitle 3 of the State Finance and
Procurement Article
• Contents of the licensee’s plan to achieve minority business participation
goals in accordance with the requirements described under Section 9-1A-
10(A)(1) and (2) of this subtitle
– Minority business participation planned in construction
– Percentage of intended employees from minority communities
– Intended purchasing from minority businesses
– Minority recruiting plan
– Minority business participation demonstrated in applicant’s existing business
operations

20. 19
Extent to Which the Proposed Location Will
Preserve Existing Maryland Jobs and the
Number of Net New Jobs to Be Created
– Jobs created (construction, ramp-up, and
stabilized)
– Percentage of employees living in Maryland
– Recruitment history and policies (e.g., history of
recruiting locally in a recently opened facility)

21. 20
Statutory Evaluation Criteria:
15% on Economic Development Factors
• Wages and benefits for newly created jobs
• Any additional economic development in the
area

22. 21
Anticipated Wages and Benefits for
New Jobs to Be Created
• Total new jobs created (construction, ramp-up, and stabilized)
• Total wages and benefits for new jobs (construction, ramp-up, and
stabilized)
• Average wages for new jobs
• Benefits, including health insurance
• Local hiring (i.e., giving preference in hiring from communities within 10
miles of the proposed facility)
• Retirement benefits, including consistency with requirements applicable
to applicants that are racetrack owners

23. 22
Any Additional Economic Development
Planned in the Area of the Proposed
Facility
• Additional components of the development (e.g., hotel)
• Timing of the additional components (e.g., timing of
opening/sales)
• Total development cost of additional components
• New jobs created by the additional components
(construction, ramp-up, and stabilized)
• Total wages and benefits for new jobs created by the
additional components (construction, ramp-up, and
stabilized)

24. 23
Statutory Evaluation Criteria:
15% on Location Siting Factors
• Existing transportation infrastructure
surrounding a proposed facility
• Any negative impacts on residential
communities
• The need for any public infrastructure
expenditures

25. 24
Existing Transportation Infrastructure
Surrounding the Proposed Facility
Location
• Proximity to interstate and other road
infrastructure
• VLT facility ingress and egress
• Proximity to public transportation infrastructure
(e.g., train stations, airports, and bus terminals)

26. 25
Negative Impact, If Any, of a Proposed
Facility Location on the Surrounding
Residential Community
• Status of local zoning and permitting
• Proximity to major residential communities
• Proximity to any schools, colleges, universities, and
hospitals
• Public safety and security
• Traffic

27. 26
Need for Additional Public Infrastructure
Expenditures at the Proposed Facility
• Availability and proximity of public infrastructure
(e.g., hospitals, fire stations, police stations,
and gas stations)
• Applicant determination of additional public
infrastructure needs