APITCHED TV AD war is underway in Maryland, pitting one out-of-state gaming-industry behemoth against another. At last count, the two firms had spent $15 million in the fight to influence voters, who will cast ballots in November on an expansion of gambling in Maryland that would authorize a sixth casino and add table games such as poker at all venues.
The ads trade fire over the alleged benefits, or pitfalls, to Maryland taxpayers in the expansion measure. For the most part, they obscure the fact that this is really a fight over the prospect of immense profits for one gaming company and the risk of considerable losses for another.
Already casino interests have spent twice the amount they shelled out in all of 2008 to get slot-machine gambling approved in Maryland in the first place. In some media markets, particularly Baltimore’s, the barrage of television ads is so intense that viewers would be excused for forgetting that the fall ballot will also include a presidential election.
The main combatants — though the ads don’t name them — are Las Vegas-based MGM Resorts International and Pennsylvania-based Penn National Gaming. If voters approve the expansion, MGM has the inside track to build what could be an $800 million casino at National Harbor in Prince George’s County; unsurprisingly, it is behind the pro-expansion ads.
Penn National is worried that the new casino would sap profits at its own marquee property 90 minutes away, Hollywood Casino in Charles Town, W.Va.; it has paid for the ads against expansion.
MGM frames the expansion as a windfall that would yield thousands of jobs and “hundreds of millions” of dollars in tax revenue for Maryland schools while cutting “subsidies” for casinos. The subsidy cut is nonsense — in fact, Maryland is cutting taxes, not subsidies, for most casinos. But a yes vote on Question 7 would indeed produce a few thousand jobs — to build and operate the new venue — as well as cash for the state.
How much cash, and whether it would really help schools, is unclear. The state, through its Department of Legislative Services, projects additional revenue of about $100 million a year from the new casino and the introduction of table games such as poker. But that amount would not materialize until 2018. And it wouldn’t necessarily mean additional funding for schools; if they choose, lawmakers could shift funds to other agencies.
Penn National, which has spent $10 million to beat the expansion so far, casts doubt in its ads on the state’s jobs and revenue numbers. It also points out that the state is cutting taxes for most casinos — in part to compensate them for stiffer competition from a sixth casino — even as it raises taxes for residents earning more than $100,000 a year.
But Penn, aggrieved at not having the inside track to build a new casino in Prince George’s, is plainly most concerned with its own bottom line. In a filing with the Securities and Exchange Commission this summer, Penn acknowledged that it could be “adversely affected” by a casino at National Harbor. Taxpayers should bear that in mind when they see ads professing great concern for their welfare.