Steven Pearlstein: And now, in local news . . .

I suspect Gov. Martin O’Malley spoke for most Marylanders last week when he explained why he was backing legislation to expand casino gambling in the state — for more than a decade, a divisive political issue that just wouldn’t go away.

“For crying out loud, aren’t we all tired of this by now?” asked the governor.

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Steven Pearlstein is a Pulitzer Prize-winning business and economics columnist at The Washington Post.

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I enjoy the occasional evening at the blackjack table more than most, but over the years I’ve developed a healthy skepticism when the gaming industry or politicians argue that gambling would be a big new source of revenue for the state, or that it would spur economic development or — in the case of Maryland — that it would save the horse-racing industry. The reality rarely lives up to the promise.

For starters, the revenue and economic projections done by the same handful of “independent” consultants routinely used by the industry invariably ignore the possibility that new competition will come on line, dividing a limited market even further and ensuring that nobody makes money. Anyone who doubts the industry’s tendency toward over-optimism and over-capacity need only look to the sorry case of Atlantic City or the reliable flood of bankruptcy filings by casino properties and operators any time the economy takes a downturn.

The studies also ignore that the money people spend (lose) on gambling isn’t spent or invested in some other way that would also generate sales or income tax revenue for the state. As in the case of Maryland, the assumption is often that the new revenue will come either from people in adjoining states or from Marylanders who are now going elsewhere to gamble. So Maryland increases the number of casinos, encouraging Delaware and Pennsylvania to do the same, forcing Maryland to up the ante even more. And it is precisely such a casino arms race that the gambling industry is thrilled to instigate.

Another rationale for this year’s legislation is that it will help provide a needed boost to the struggling development at National Harbor in Prince George’s County, which is expected to win the competition for the new license. A new casino/hotel, on the northern edge of the property next to the Beltway, will be operated by MGM Grand.

I’m a big fan of National Harbor and its developer, Milt Peterson. Over the years, I also have admired Peterson for resisting entreaties from state and county politicians to include a casino as part of the project.

These days, however, it’s no secret in the real estate world that National Harbor isn’t exactly performing according to expectations. Long delays caused by the county’s permitting process meant that by the time the project finally came on line, the real estate bubble had burst and Peterson had missed the top of the cycle. A long-planned investment by Disney in a theme park fell through, while new requirements put in by the Obama administration for Metro access to government offices dashed any hopes that National Harbor could pick up federal tenants.

Given that history, it’s hardly surprising that Peterson, who has personally invested hundreds of millions of dollars in National Harbor, has now agreed to include a casino hotel in the project.