For the people of Prince George’s County, MGM promised substantial, badly needed funding to improve the county’s public schools that are struggling to give the county’s children the quality education they deserve and make them competitive for jobs and college admissions.
MGM National Harbor is building a 50,000-square-foot expansion above the main floor of the casino — a 37 percent increase in gaming space. It’s classified as an “interior expansion,” the approval of which was allowed to occur without a site plan and without public hearings or impact studies. It is expected to be completed this year.
So why isn’t this good news? Expansion of the casino will allow MGM to do more business. And more business means more taxes. Or does it?
Slot machines and gaming tables are taxed at very different rates. MGM pays taxes equal to 20 percent of gaming table revenue and 56 percent of slot machine revenue. If you were MGM, you’d do whatever you could, legally, of course, to remix your casino floor, shifting business in favor of gaming tables and away from slot machines.
In 2017, MGM’s first full year of operations, MGM removed 416 slot machines from its gaming floor and added eight gaming tables. The expansion now under construction takes the redesign of the casino, figuratively and literally, to another level. It allows MGM to move the entire poker room — 39 large gaming tables — upstairs and pull slot machines from the main floor.
What will MGM do with all this extra space on the main casino floor? Put in more gaming tables taxed at only 20 percent.
When the expansion is complete, the MGM casino will be doing more business but paying less in taxes than before. Less tax means less money for Prince George’s County schools and local projects. Good for MGM. Not so good for the county’s children.
Hands down, MGM is already the greatest revenue-producing casino of the six casinos in Maryland, but it’s dead last in taxes paid as a percentage of gambling revenue.
Let’s put a hold on construction of the 50,000-square-foot expansion — and on the notion that MGM can increase profits by millions of dollars at our expense — until MGM explains at hearings open to the public and media why reducing its taxes is good for Prince George’s County.
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