The Maryland gaming market can sustain a sixth casino site, and the addition of table games could increase gross revenues from all casinos by as much as $300 million, the state’s financial analysts told lawmakers Tuesday.
While allowing a casino in Prince George’s County would cut into the slot machine revenues of existing casinos nearby, legalizing Las Vegas-style table games such as blackjack and roulette would increase the net take of those casinos, said Warren Deschenaux, director of policy analysis for the Department of Legislative Services.
Deschenaux and consultants from the financial analysis firm PricewaterhouseCoopers, who collaborated on a study of the state gaming market, testified before the 11-member Workgroup to Consider Gaming Expansion in Annapolis.
The group, composed of lawmakers and members of the administration of Gov. Martin O’Malley (D), is next expected to meet publicly June 20 to consider possible legislation to be taken up during a special General Assembly session in July. The group is likely to meet privately prior to then to discuss the issue, according to Chairman John Morton III.
Prince George’s County Executive Rushern Baker III (D) has pitched a waterfront National Harbor development near Oxon Hill as the ideal location for a high-end casino resort that would draw customers from Washington, D.C., and Virginia, including tourists visiting the nation’s capital.
Analysts based their projections on a Prince George’s site with 3,000 slot machines, and offered separate projections for a so-called “regular” casino and a “destination” casino that would include a 400-room hotel, restaurants and shops.
A destination casino with table games, which Baker says is the only sort he is willing to consider, would generate $520 million in gross revenue, according to Deschenaux.
The recently opened Maryland Live! Casino in Hanover and a forthcoming casino in Baltimore city would see their slots revenues drop by $125 million and $65 million, respectively, as a result of a destination facility at National Harbor, according to the analysis. But with the addition of table games, the net revenues going to casino operators would increase by $31 million at the Hanover facility and $38 million in Baltimore, it said.
The state’s net gain, based on a sixth casino and a presumed 20 percent tax rate for table games, would be about $160 million, according to the analysis.
“[The report] verifies what we’ve been saying to the General Assembly about the ability to have a sixth site in the state,” Baker told reporters Tuesday. “We feel good about it.”
The operators of the $500 million Maryland Live! Casino have argued that adding a sixth license before the other casinos are fully up and running would jeopardize their investment, a position echoed by Anne Arundel County Executive John Leopold (R) on Tuesday.
“It’s a breach of faith to a businessman who plays by the rules and makes a half-billion-dollar investment,” Leopold told The Gazette outside the meeting. “It’s a terribly message to send to business people all over the country who want to invest in Maryland.”
House Minority Leader Anthony J. O’Donnell (R-Dist. 29C) of Lusby cautioned that a special session was not necessary to rush a modification of gambling through the legislature.
“[House Republicans] do not see any crisis or emergency that would necessitate a special session,” he said. Delaying the debate until the regular session might push back the date that expansion would go before voters for approval, but it would allow lawmakers to examine the matter thoroughly, he said.
A special session, likely to begin July 9, would need to occur this summer to ensure that the issue could be placed on the ballot in this fall’s general election. Delaying consideration would mean the issue wouldn’t go before voters until 2014. A special session could cost the state about $25,000 per day.