Lawmakers and officials are set to start weighing the pros and cons of expanding gambling in the state Friday, and the possible advantages of adding table games likely are to be a hot topic.
The 11-member Work Group to Consider Gaming Expansion will discuss adding table games at existing sites as well as allowing a sixth casino in Prince George’s County. The group’s recommendations could lead to a special General Assembly session later this summer so lawmakers can vote on the issue.
Although allowing the Las Vegas-style games may help draw more business to Maryland’s casinos, the state also will have to weigh the consequences of an increasingly crowded market and a potentially addictive product.
From a marketing perspective, adding table games to the state’s five existing slots licenses almost is a no-brainer, observers say.
“It’s the difference between a bar that just has beer and a bar that has hard liquor and beer,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
Although games such as blackjack or poker can attract high-rollers playing thousands of dollars per hand, slot machines take bets at a much faster pace, and some allow bets of as much as $100, he said.
“It would be a mistake to underestimate the impact of slot machines,” Schwartz said.
Nonetheless, table games in neighboring states have brought in millions of dollars in revenue. In Delaware, which allowed table games in 2010, the state’s 188 games generated $74.1 million in total revenue in fiscal 2011, according to analysis by Maryland’s Department of Legislative Services. During the same period, the 791 table games in Pennsylvania raised $508 million, while the 350 table games in West Virginia garnered $200.8 million in total revenue, according to the analysis.
“It’s another tool in the toolbox,” said Vernon Kirk, director of the Delaware Lottery. “Not every product is going to be a home run, but the more you can offer, the better.”
Managers of the new Maryland Live! Casino in Hanover, scheduled to open Wednesday with more than 3,000 slot machines, say having table games would enhance what they can offer their customers as well as create as many as 800 new jobs.
The casino is expected to generate more than $400 million in tax revenue per year, said Robert Norton, president and general manager of the casino. “[That] makes us the largest taxpayer in Maryland, and the largest single source for education [funding].”
Though supportive of adding table games, Norton and the casino’s developers, the Cordish Cos., remain concerned that adding a sixth slots license would saturate the local gambling market.
In this year’s regular session, lawmakers discussed softening the impact of another casino on the state’s existing sites by increasing the operators’ share of slots revenue from 33 percent to as much as 48 percent when a sixth license is issued.
Prince George’s County Executive Rushern Baker III (D) has pitched the riverside National Harbor development as the site for a high-end casino that would draw gamblers from Washington, D.C., and Virginia, but the operators of Maryland Live! argue that their plans and investments were made under the assumption that there would be just five locations in the state.
“Our facility’s target market is [mostly] south of us. Prince George’s would take as much as 40 percent of our market share,” Norton said.
Expanded gambling in the mid-Atlantic already has led to a decline in revenue in states such as New Jersey and Delaware. Table gaming in Pennsylvania began in July 2010, and from 2010 to 2011 consumer spending at casinos dropped 3.3 percent in Delaware and 7 percent in New Jersey, according to data from the American Gaming Association.
Atlantic City casinos were “creamed” by Pennsylvania, but it was too early to tell exactly what the impact of more gaming in Maryland would be, said Frank Fahrenkopf, president of the association. “[There’s] no reason to believe it’s not going to be extremely successful.”
Officials expect a further negative impact on Delaware’s casinos, but don’t know how extensive it will be, Kirk said.
“We’re looking with some trepidation at [Maryland Live!],” Kirk said. “Delaware is a small state. A lot of our customers come from Maryland.”
Delaware also allows limited betting on professional sports games, and New Jersey will allow sports betting this fall in an effort to boost the Atlantic City market. A federal prohibition restricts the practice to four states, not including New Jersey, but Gov. Chris Christie (R) is banking on the ban being overturned in court.
Although easier access to gambling can increase the severity of a gambling addiction, it’s not clear whether one form is more likely to get a person hooked than another, said Keith Whyte, executive director of the Washington, D.C.-based National Council on Problem Gambling.
Certain risk factors are believed to affect how addictive a game might be, such as the speed of play and the size of bets, but can wildly vary from one game to another. Any type of gambling can be addictive, but one of the major factors is whether a person is genetically predisposed to addiction, Whyte said.
In terms of alcoholism, a person’s preference for gin, vodka or beer is far less important than whether or not there is a family history of it, Whyte said.
Adequate data on whether or not the prevalence of problem gambling has increased after states have legalized table games hasn’t been collected, Whyte said.
Some 9 percent of Marylanders are considered to be at-risk of becoming a problem or pathological gambler, according to a 2011 study by the Maryland Institute for Policy Analysis and Research at the University of Maryland, Baltimore County. Problem and pathological gamblers make up about 3.4 percent of the population, according to the study.
Maryland casino operators must pay a $475 annual fee per slot machine for the state’s Problem Gambling Fund. Although the state has transferred some of that money to preserve education funding, it also has funded creation of the Center of Excellence on Problem Gaming.
The center, developed through a partnership between the state Alcohol and Drug Abuse Administration and the University of Maryland and expected to be operational July 1, will provide resources and training to help clinicians identify and treat problem gambling, said Kathleen Rebbert-Franklin, acting director of abuse administration.
Gamblers also can place themselves on a voluntary exclusion list, operated by the state lottery, barring them from the state’s casinos under penalty of arrest for trespassing.