The 17-story flagship hotel at Maryland Live Casino won't open until the spring, but officials are betting that the 350,000-square-foot addition will deliver the winning card it needs to reclaim the lead in the state's crowded gambling market.
Monthly revenue for the casino in Anne Arundel County has dropped an average of 17.7 percent since MGM National Harbor opened in December — drawing gamblers from the Washington area and elsewhere to its Las Vegas-style resort along the Potomac River in southern Prince George's County.
Officials say the hotel and event center under construction in the sprawling Arundel Mills complex will make the casino more competitive with its rivals, particularly MGM, which opened with a 24-story hotel and a concert hall that has lured visitors with big-name acts.
"We have to work harder at what we do," said Rob Norton, president of Cordish Global Gaming Group and Live Casinos. "When we open the hotel and event center, I expect that we will be able to compete differently and maybe a little bit more effectively."
As part of its ongoing transformation, the company also is rebranding itself: Maryland Live is now Live Casino & Hotel.
State and county officials say they, too, have high hopes that the 310-room hotel, day spa and 1,500-seat concert venue will draw more visitors — and money — to the casino and the mammoth Arundel Mills outlet mall next door. More than 10 million people visit the casino annually, according to state estimates.
"This hotel allows Maryland Live to expand its base, to attract tourists from outside the greater Washington and Baltimore areas," said Benjamin Wu, Maryland's deputy secretary of commerce. "It is good for the state. It is building on our tourism records."
Anne Arundel officials think the project is so critical to the success of the casino that the county council is considering giving Cordish Cos. a multimillion-dollar tax break on the hotel and conference center.
The casino has contributed more than $100 million to the county in taxes on gambling revenue alone since it opened five years ago, said David S. Cordish, chairman of the Cordish Cos. The money is distributed across the county, including to nonprofit groups.
Under the tax break proposal, backed by County Executive Steven R. Schuh (R), Cordish Cos. would pay the county $1 a year for 30 years in lieu of property taxes. In exchange, the county would get access to the conference center for events, officials said.
The tax deal would cost the county about $700,000 a year for the next 30 years, or about $21 million over the life of the deal, Schuh said Tuesday at a topping-off ceremony for the project.
The legislation would allow a maximum tax break of $1.2 million a year, or a total of $36 million.
Construction plans include a 1,500-seat event center, but if the tax break is approved, the facility would be expanded to accommodate a convention center with 4,000 seats, company officials said.
If the county were to build a convention center, Schuh said, it probably would cost more than $60 million.
Schuh called the deal an "opportunity for taxpayers," saying the county would benefit from the facility — the largest such structure in Anne Arundel. Not only would it attract conventioneers, he said, but it also would provide "a much needed in-county location for milestone events like high school and community college graduations."
Residents often must travel to Baltimore or Prince George's for such events.
"No longer would those parents have to travel all over creation to see their children cross the stage in a cap and gown," he said. "The facilities we are topping off this morning will house that convention center."
After five years in operation, Live remains the largest of the state's six casinos, with nearly 4,000 slot machines and 190 gambling tables. MGM operates 3,087 slot machines and 168 tables, according to a Maryland Lottery and Gaming Control Agency report. However, MGM became the biggest revenue generator in January, its first full month of operations. It also pushed the state's gambling revenue to new heights.
Total monthly revenue from all six casinos rose an average of 38.6 percent after MGM began operations, according to the state lottery and gaming agency's year-to-year comparisons. The industry, which contributes a portion of its profits to the state's Education Trust Fund, set a record in March, generating $141.2 million in revenue. Last month, gambling revenue totaled $134.5 million — of which about $1.3 million went to the state's general fund and $32.9 million to the Education Trust Fund.
The monthly gross revenue for Live, however, dropped below $50 million for the first time in at least a year in December — coinciding with MGM's opening — and has continued to fall below that of the state's newest casino. Last month, Live generated $46.96 million from both slot machines and table games, a decrease of nearly $7 million — or 13 percent — compared with September 2016. MGM generated $49.36 million, according to the state lottery and gaming agency.
Officials expected the state's other casinos to take a hit when MGM opened; Live also was expected to be hardest hit because of its proximity. Live officials said last year that they considered MGM "another good competitor" but were counting on the customer loyalty the company had built in its five years of operations.
It wasn't enough.
The $200 million hotel and event center, slated to open in early 2018, promises more entertainment and dining options. It will give the casino a total of 560 hotel rooms, including a 250-room hotel about a mile from the casino that Cordish Cos. purchased last year.
Live plans to reward its most loyal customers with free accommodations. About 1 million customers are members of the casino's rewards program.
"This is part of how you fight back," Cordish said.
With the introduction of Live hotels, Cordish Cos. is expanding its brand, known across the country for its entertainment districts and casinos. The Maryland Live hotels will be the first of what the company envisions as a chain in the United States and internationally, Cordish said. The company has built other hotels in the United States, including the Hard Rock casino hotels in Tampa and Hollywood, Fla.
"Let's see what happens," Cordish said. "We are here for the long haul. My family has been here for over 100 years. We are not going anywhere. We will keep adding [amenities], and may the best man win."