Maryland falling behind in race for gamblers
By John Wagner,
CHARLES TOWN, W.Va. — Rich Williamson is exactly the kind of person Maryland leaders had in mind when they decided to bring slots to the state.
For years, he has been traveling to West Virginia two or three times a week to gamble. Yet with one of Maryland’s largest slots parlors planned for just a few minutes from his Baltimore home, the furniture salesman has written off his home state.
Here’s why: During the past year, black jack, craps, roulette and other table games have debuted here, transforming the Hollywood Casino at Charles Town Races into a place far more akin to what gamblers find in Las Vegas.
And that has meant that Maryland — barely in the slots game — is falling further behind. Only two of the state’s five planned slots venues have opened, with the other three facing delays. In the meantime, neighboring states have considerably upped the ante, which worries not only supporters of Maryland gambling but also opponents.
All told, 18 casinos in West Virginia, Delaware and Pennsylvania have added table games, most of them since Maryland voters authorized slots in a 2008 ballot measure.
“If this is an arms race, we’re fighting missiles with muskets,” said Gerard Evans, an Annapolis lobbyist who has represented several pro-gambling interests in recent years, including Penn National Gaming, owner of one of the slots venues that have opened in Maryland as well as the casino in Charles Town.
To hear Williamson talk is to understand why some Maryland leaders are worried that unless the state finds a way to match the allure of the casino here, their reluctant plunge into slots may never produce its promised payout of $660 million a year for public education.
“Just a slots parlor doesn’t attract me in the least,” said Williamson, 52, as he stuffed his chips in his shorts pocket and took a break from a four-card poker table on a recent weeknight.
In coming months, debate is expected to begin in earnest among Maryland lawmakers over whether more should be done to keep people such as Williamson from making a cross-border trek to pass up a casino closer to them.
Casino owners say the legalization of table games would be a good start, allowing them to operate in a competitive market that has changed considerably since Maryland got into the slots business. Although table games are not as profitable as slots, operators say they lure additional customers, many in higher income brackets than a typical slots player.
Penn National’s sprawling property in Charles Town has more games than any site envisioned in Maryland, as well as a hotel, racetrack, upscale steak house, several bars and a live music venue under construction.
By contrast, the company’s 1,500-machine facility in Perryville, Md., has a buffet and one bar, which had only nine seats when it opened in September. Company officials largely blame Maryland’s tax rate on gambling revenue, which is among the highest in the nation.
The only other facility open in Maryland, at Ocean Downs racetrack on the Eastern Shore, is half the size of Perryville, with 750 slot machines.
Activists who fought the introduction of slots in Maryland say that embracing table games is wrong-headed but that they are hardly surprised the debate is beginning.
“Once you let the camel’s head into the tent, you shouldn’t be surprised to see the full camel,” said Aaron Meisner, a former leader of the group StopSlotsMaryland.
Meisner argued that Maryland should not consider an expansion when its program is falling short and that there hasn’t been enough time to assess how gambling addiction and other social problems have been affected by slots.
“We haven’t had a chance to see what we’ve already wrought,” he said.
The view from Annapolis
In Annapolis, no one is more eager to forge ahead than Thomas V. Mike Miller Jr. (D-Calvert). The powerful Senate president pointed to Pennsylvania, where then-Gov. Ed Rendell (D) signed a bill in January 2010 allowing table games at the 10 casinos now operating there.
“Governor Rendell seized the moment, and now they’re seizing Maryland dollars by the bagful,” Miller said. “You have to understand the consequences of not moving forward when the time is right. We’re way behind.”
In addition to table games, Miller would like lawmakers to authorize a sixth gambling site next year — most likely at Rosecroft Raceway in Prince George’s County.
That location would be more consistent with earlier visions of slots in Maryland, located at horse-racing tracks to prop up the ailing industry.
Although it could be quite lucrative — drawing patrons from the District and Virginia, where casino-style gambling is illegal — Prince George’s lawmakers are bitterly divided over the issue, with some saying slots would prey on its poorer residents. Prince George’s County Executive Rushern L. Baker III (D) has said little publicly about the prospect, which a spokesman said he is studying.
Miller’s counterpart in the House of Delegates, Speaker Michael E. Busch, said he would not stand in the way of a table-games bill if there are enough votes in his chamber to hold a public referendum on this issue. Under law, major gambling expansions must be approved by voters.
But Busch (D-Anne Arundel) noted that any plan to add a casino in Prince George’s would draw opposition from other operators, who would see it as unwelcome competition.
That was confirmed by Joe Weinberg, president of the gaming division of Cordish, which is developing a 4,750-machine slots casino at Arundel Mills mall, not far from Baltimore-Washington International Marshall Airport.
With plans calling for multiple restaurants and a live music venue, that facility is the closest in concept to Charles Town and other larger casinos in surrounding states. Its opening was recently pushed back to next year.
“The simplest thing to do would be just to expand gaming at the five existing sites,” Busch said, referring to the addition of table games.
Among the “big three” in Annapolis, whose buy-in is usually needed to make anything happen, the least enthusiastic about a gambling expansion is Gov. Martin O’Malley (D).
O’Malley was widely credited during his first year in office with brokering a legislative compromise — approved by voters the next year — that authorized up to 15,000 slot machines at the five locations.
He said he is keeping an “open mind” about the future but added that the 2008 referendum passed in part “because it was limited and because it was a moderate proposal. . . . It was my sense that we didn’t want to go to full-bore casinos.”
A casino makeover
The way table games have transformed Charles Town is apparent from the moment patrons walk in the front door.
Rows of slot machines on the gaming floor below have been cleared out to make room for tables offering Texas Hold ’Em, three-card poker, craps, black jack and other games.
Casino operators freely acknowledge that the tables are not as profitable as slots. Table games require more personnel, including dealers and more security, to operate. But they bring more people in the door — many with the ability to spend more money.
John V. Finamore, senior vice president for regional operations at Penn National, said Charles Town is getting more couples to visit, for example. The husband might play black jack while the wife plays slots.
And casino operators have noticed— and responded to — an influx of Asian customers from all over the region interested in table games. As a result, Charles Town is adding sic bo and other Asian games.
“With table games, we’ve attracted a completely different customer, and every business has to do that,” Finamore said.
O’Malley and other state leaders acknowledge that the Maryland program has had setbacks, which they attribute largely to the economic downturn — its timing, most notably, was blamed for the limited number of private bidders interested in operating sites.
When lawmakers passed slots legislation in 2007, legislative analysts projected that all five locations would be open by this August. Only two will be.
Construction is barely underway at Arundel Mills. And two other prospective sites — in downtown Baltimore and in Western Maryland — are still without developers.
Analysts had projected that by fiscal 2013 the five casinos would be generating $1.3 billion a year in gross revenue — an average of more than $100 million a month, with nearly half that earmarked for education.
Figures released last week underscore how far Maryland has to go. Last month, the casinos in Perryville and at Ocean Downs generated only about $13.3 million.
That is not to say that Maryland’s largest operating casino, in Perryville, hasn’t kept some state slots players in Maryland. Monthly revenue has dipped some across the state line at the Casino at Delaware Park, about 28 miles up Interstate 95.
But a lot of money is still leaving Maryland. On a recent Sunday, more than a third of the license plates in the parking lot of Delaware Park were from the Free State. And in the casino, it was clear what part of the attraction was: The table games were packed.