Published on December 20th, 2012 | by Len Lazarick4
Think tanks recommend $500 million casino license
By Len Lazarick
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.