Md. House seeks millions more in relief to casinos competing with Pr. George’s venue
By John Wagner,
The Maryland House of Delegates moved Monday to more generously compensate other casino owners for the additional competition that would come with a new Las Vegas-style gambling venue in Prince George’s County.
Under a House alternative, casinos in Anne Arundel County and Baltimore would together be guaranteed tens of millions of dollars a year more in relief than under the version of a bill proposed by Gov. Martin O’Malley (D) and passed last week by the Senate.
The Cordish Cos., the owner of Maryland Live! in Anne Arundel County, has been most vocal in recent weeks in arguing that O’Malley’s plan was “patently unfair” because a Prince George’s casino — most likely at National Harbor or Rosecroft Raceway — would undercut its ability to draw gamblers from the Washington region.
Del. Frank S. Turner (D-Howard), who chairs a subcommittee with jurisdiction over gambling issues, said the additional relief would help ensure that the state’s three largest casinos — all in the Washington-Baltimore corridor — could be viable.
“We want all of them to be successful,” Turner said. “If they fail, then we fail as a state. We don’t want them to become eyesores in five years.”
House Minority Leader Anthony J. O’Donnell (R-Calvert) mocked the action as “a pay increase for billionaire casino owners.” In Maryland, slots revenue is split among the privately owned casinos, the state and host counties.
“Is this what the Democratic Party means by ‘taking care of the little guy?’ ” O’Donnell asked.
The changes to O’Malley’s legislation were among dozens considered by the House Ways and Means Committee on Monday before it voted 13 to 7 to advance the bill. Delegates are laboring to complete work on the legislation by Tuesday. They are in Annapolis for a special session called by O’Malley, who has said he’s “sick of the issue” and wants to put it behind him.
The plan under consideration would also allow table games, such as blackjack and roulette, at Maryland’s five existing slots sites. Under current law, venues may offer only electronic versions of those games that don’t involve dealers.
That provision — as well as one that would allow 24-hour operation — has proven far less controversial than the proposal to allow a new facility in Prince George’s.
Both the new venue and the new games would also require approval of voters in November, assuming House leaders can round up enough votes for the bill and differences with the Senate are resolved.
The legislation under consideration would be the largest expansion of gambling in Maryland since voters authorized five slots locations in 2008. Two of those have yet to open.
Legislative analysts estimate that O’Malley’s proposal would net the state about $200 million a year in gambling revenue once a Prince George’s facility opens in mid-2016. Most of that — about $130 million — is unrelated to the Prince George’s facility, however.
Under the O’Malley proposal, the net revenue to the state from the Prince George’s casino is estimated to be about $70 million a year, after accounting for concessions to other casino owners.
With the House changes, the net revenue to the state would initially drop by about $30 million.
On Monday, House members also scrapped a provision in the Senate bill that would have allowed National Harbor or Rosecroft to open a temporary facility with table games — but no slots — before a permanent casino opens. That change was pressed by delegates from Baltimore, where a casino owned partly by Caesars Entertainment is scheduled to open in 2014.
A House panel resisted another change sought by Baltimore lawmakers that could have pushed back the date a Prince George’s casino would be allowed to open.
Under current law, most casino owners are allowed to keep 33 percent of slots revenue — one of the lowest takes in the country.
Under both the O’Malley proposal and Senate bill, operators in Anne Arundel and Baltimore would be guaranteed an additional 5 percent in revenue after a Prince George’s facility opens and would be allowed to petition state officials for up to an additional 5 percent in relief. Those dollars would have to be used for marketing and capital improvements.
Under the House plan, the Anne Arundel casino would instead be guaranteed an additional 8 percent and the Baltimore facility would get an additional 7 percent. The same overall cap for relief would apply, but casinos would be given more certainty about the outcome than under the Senate bill, a House aide said.
The House bill also allows a casino in Cecil County to petition the state for relief, a provision not included in the Senate bill.
O’Malley’s bill also proposes shifting responsibility for procuring slot machines from the state to casino operators at larger facilities. Maryland is one of just a few states in which the government buys or leases machines.
In exchange for taking on that responsibility, casino owners would keep another 6 percent of slots proceeds. The House plan would bump that up to 8 percent only for the facility in Anne Arundel.
Turner said that change is justified because Cordish, unlike other large casino operators in Maryland, is not a gaming company with national reach and is unable to negotiate the same kind of large-scale machine procurements.