August 9, 2012

Anne Arundel legislators express reservations about new gaming bill

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Demonstrators from Prince Georges County oppose sixth casino.

Demonstrators from Prince George County oppose sixth casino.

By Dana Amihere
dana@marylandreporter.com

Anne Arundel County lawmakers at a hearing peppered the governor’s chief lobbyist with their misgivings about the gaming expansion bill introduced Thursday and its impact on the state’s largest casino at Arundel Mills.

For over an hour, chief legislative officer Joe Bryce fielded lawmakers’ reservations about language for a sixth gambling site opening in Prince George’s County.

Although no developer or site is a sure bet at this point, the possibility of $1 billion destination facility at National Harbor overshadowing Maryland Live! casino at Arundel Mills dominated the discussion.

Del. Ted Sophocleus, D, wanted assurances that Penn National Gaming, which acquired Rosecroft Raceway in Fort Washington, would have the same shot at the “whole ball of wax” –– tax rate, bidding opportunities, and so on.

The bill specifies the sixth casino could be built “within four miles of the intersection of Bock Road and St. Barnabas Road,” a radius that includes both Rosecroft Raceway and National Harbor.

Tax reductions for some casinos

The bill sets forth a 5% tax reduction for existing gaming sites for marketing and promotion to compensate for lost revenues. The legislation, says Bryce, is intended to ensure funds toward capital reinvestment and improvements aren’t sacrificed in the event of lost revenue. Del. Steve Schuh, R, equated forcing gaming operators to unnecessarily advertise in an oversaturated market to having to GEICO having two lizards selling insurance.

“The chances of this statute staying on the books for any substantial amount of time is nil,” Schuh said.

Sen. Ed Reilly, R, was more concerned with facilities in different counties having varied ratios of video lottery terminals to table games but being eligible for an equal share of local aid.

Predictions Maryland Live! would be hurt

Anne Arundel County Executive John Leopold told the delegation that the struggling Perryville casino, which wants to give up 400-500 slot terminals, should be the state’s “first warning” to adding a sixth site.  Another casino –– especially one not that far away –– “would be a boa constrictor that will squeeze the life out of Maryland Live,” he said.

Joe Weinberg, gaming president for the Cordish Cos., which operates Maryland Live!, said the casino could stand to lose $50-60 million in gross revenue and experience “traumatic declines” in direct and indirect employment, Weinberg said.

“We don’t see this as an infinitely expanding market. We see that we’re just going to take two healthy facilities and split it up into three weaker facilities.”

Although Bryce cited a study by Pricewaterhouse Coopers which contends that National Harbor could generate more than $240 million in gaming revenue annually, Weinberg said consultant projections can be misleading. Estimates on Ocean Downs were off by 50%; Perryville estimates were off by 20%, he said.

“We need real data in hand to make decisions about what the market can handle,” Weinberg said.

Road improvements, 24-hour operation

Schuh was also concerned about transportation infrastructure improvements which need to be made in order to support an influx of traffic to any new gaming site. While Schuh hoped that the state might be able to pitch in to defray costs, Bryce responded that the bill doesn’t change the fact that developers are responsible for conducting their own traffic studies and making subsequent improvements.

Del. Cathy Vitale, R, honed in on the bill’s expansion to 24-hour operation and how it would affect local liquor boards’ authority, which currently dictates that no alcohol is served after 2 a.m. on weeknights and 4 a.m. on weekends. Bryce said that despite what’s written in the bill, local entities still have jurisdiction over a facility in their area.

With more than 8,000 video lottery terminals approved by the legislature in Baltimore City and Anne Arundel County alone, Sen. Reilly focused on who would designate the number and type of table games at a new gaming facility to prevent excess supply. The process will be entirely governed by the operator, Bryce said.

  • Ken Stevens

    If these casinos are such great revenue producers for Maryland programs, why not have the state or county governments operating them rather than setting up any pet private-profit seeking monopolist as the “middle man”?  Why should the state be bending over backward to please these private outfits that already have or would be getting a sweetheart deal?  Judging from the ads and imagining the backroom lobbying efforts being conducted by or on behalf of these private outfits, you’d think we were stealing their candy.  I sense an ever greater need for transparency and oversight if the state goes further down the road of picking pet monopolists in this gambling game.

  • abby_adams

    Despite all the studies concerning the millions of revenue that maybe generated by expanding gambling, I can bet that it ain’t going to happen hon! Instead of our august legislators studying the success & failures other states have experienced with depending on gambling to balance budgets,  we get the same old predictable reactions and the same old “pie in the sky” promises. Gambling will not cure our budget issues with a one party legislature that continues to increase the budget year after year.  We can depend on one outcome for sure. Taxpayers will not benefit from expanded gambling but administration cronies will.