Think tanks recommend $500 million casino license

December 20, 2012 at 7:31 am

National Harbor (Photo by joseph a)

National Harbor (Photo by joseph a)

By Len Lazarick
Len@MarylandReporter.com

Two Maryland think tanks are proposing that the state charge a license fee as high as $500 million for new National Harbor Casino, saying anything less, such as the current $18 million license fee, “would be a giveaway, corporate welfare, or taxpayer rip-off.”

But House Speaker Michael Busch said the license fee and other financial aspects were issues settled by the August special session and approved by voters in the November referendum. “They voted for that at the polls,” Busch told reporters.

Investment banker Jeff Hooke, who heads the Maryland Tax Education Foundation, did the study published by the Maryland Public Policy Institute.

“There’s plenty of track record to justify the numbers here,” Hooke said. The $500 million figure was based on his analysis of the casino’s earning potential and also on comparable casino deals in other states.

According to Hooke, the National Harbor Casino when built could generate $148 million a year in operating profits, even after all expenses including a 56% state tax rate. Hooke has studied and testified on gaming licenses in six states, including Pennsylvania.

Hooke said the new casino would be a “protected monopoly” that would justify much higher fees to obtain its license than Maryland has been asking. He said that MGM spent $50 million to back the voter referendum on the issue “because they’re going to make $500 million.”

Casino “a license to print money”

Christopher Summers, president of the Maryland Public Policy Institute, said a casino is “the license to print money” and Maryland has left $1.6 billion on the table by its failure to conduct auctions for the casino licenses.

“This was such a major opportunity that was missed,” Summers said.

Busch said Hooke “had the opportunity to come down and testify” when the legislature was reviewing the casino legislature.

“There are numerous different opinions” about how to structure the state’s share of casino revenues, Busch said, and the legislature relied on the advice of PricewaterhouseCoopers consultants it hired.

The debate over gambling and a sixth Maryland casino to be built in Prince George’s County triggered two special sessions of the General Assembly this year when the House and Senate couldn’t agree on a bill by the end of the regular session.

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  • abby_adams

    Think tank meet what were they thinking tank! When will the voters finally wake up to the continuing culture of corruption in Annapolis? Can’t wait til the expected bounty of $$ doesn’t materialize from the casinos & the legislature is back demanding more $$ from MD taxpayers. Only 3 years left til I can call myself a “former MD taxpayer” & I can’t wait!

  • professor in Baltimore

    It is important to have aid for people who lose great amounts of money in Maryland’s casinos. Set aside any casino fee to at least help those persons and families deeply hurt by Maryland’s gambling. As the industy expands and time passes, it is going to be worse

    • http://www.facebook.com/people/Dale-McNamee/100002467161143 Dale McNamee

      Why is it the responsibility of the casinos or the taxpayers ( ultimately ) to cover the losses of those who willingly engage in gambling ? I went to a casino 20 years ago and lost $10 (slots) and that was it…

      Where are the clergy and anti gambling advocates to help people to avoid going to a casino ? But, they can’t compete with the promise of the ” Big Winnings”…

      What about the Lotto, Powerball, Keno, horse race betting, etc. ?

  • Cindy Walsh

    People need to take a look at how Maryland’s commissions work and who they always seem to work for regarding policy decisions. I have stood in front of the Maryland Public Service Commissioners on numerous occasions to tell them to stop working for the shareholders and corporations against the general public interest. They represent about 5% of the population and we, 95%. As we see each time, and we are about to again with this latest BGE/Exelon rate increase, the Governor’s we are electing….all sent to use through a pipeline rather than public choice….always appoint people to commissions that have that 5% dynamic. Meanwhile, you and I sit a bemoan our pols not listening to us. The answer is simple…….run candidates against the entrenched field team of incumbents and get out and work for their election! You will need to establish community and state-wide networks of newsletters and social media as all of Maryland’s media is captured, but in these days that is not hard.

    As we see people vote yet again for an issue with a commission…..gambling….that we know will work to maximize the casino’s profits at the public’s expense….we need everyone to get out and start Democracy Now networks!!!!