O’Malley pushing alternate gaming plan -- Gazette.Net


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This story was updated at 4:25 p.m. Monday.

Gov. Martin O’Malley said he remains hopeful there will be a special session on gambling this summer, and he thinks there is “broad consensus” on an alternative plan put forward by the House of Delegates.

The key proposal is the establishment of a state Gaming Commission to address issues such as the tax rate on slot machines, which has become a sticking point in talks to expand gambling in Maryland, O’Malley said Monday.

“This is probably something that is more complicated and better left to a commission to handle,” O’Malley said, adding that although there still will be legislative oversight, lawmakers would not be wrestling with minor differences in tax rate proposals.

Lawmakers have been at an impasse in regard to expanding gambling since last month, when an 11-member work group failed to reach an agreement on the matter because House members balked at lowering the state’s 67 percent tax on slots revenue.

The work group did agree on adding table games, allowing a sixth slots casino in the state — in Prince George’s County — and establishing a Gaming Commission with an experienced executive director that would have limited control on slots tax rates, a suggestion O’Malley said originated in the House.

Overall, the group projected that its recommendations could put as much as $223 million per year into the state’s Education Trust Fund.

Prince George’s County Executive Rushern L. Baker (D) said Monday that lawmakers should stick with the proposals the commission was able to agree on.

“A sixth site, table games, and let the [gaming commission] set the rates,” Baker said. “I think we should go forward with that.”

Baker said he was willing to stand behind House Speaker Michael E. Busch (D-Dist. 30) of Annapolis at a news conference and support the House plan.

Busch could not be reached for comment Monday, but is scheduled to meet with O’Malley and Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach to discuss the matter Tuesday morning.

Baker has pitched the waterfront National Harbor development in Oxon Hill as the ideal location for a high-end resort and casino that could draw gamblers from Washington, D.C., and Virginia.

The site’s owners have partnered with MGM Resorts International to develop such a project, which they say could create nearly 4,000 permanent jobs and generate hundreds of millions of dollars in new tax revenue. But they want a lower tax rate.

O’Malley expects that once the plan is reviewed by lawmakers, the issue can be resolved quickly.

“I would still hope, with a little better than a 50-50 chance, that we can forge the consensus necessary,” O’Malley said.

It was not clear whether lawmakers would be willing to reconvene this summer or if the matter would be discussed during the regular session in January, but O’Malley said he would prefer that it be dealt with sooner.

A decision on a special session was needed within the next seven to 10 days, O’Malley said.

Lawmakers would have to OK a gambling expansion before Aug. 20 for the issue to be placed on the ballot this fall. Voters must approve any gambling expansion.

But even what O’Malley is referring to as the “House alternative” might not be persuasive enough to ensure support from delegates.

Lawmakers still were being asked to approve a sixth site without knowing what the final tax rate would be, which was “disingenuous,” said Del. Frank Turner (D-Dist. 13) of Columbia, who chairs the House subcommittee that deals with gaming. Turner also said adding table games was the only part of the plan that warranted immediate action.

Plans for a sixth site have drawn fire from the Cordish Cos. of Baltimore, owners of the recently opened $500 million Maryland Live! Casino in Hanover. The company has said approving a sixth casino before the five that voters initially approved in 2008 are all operating would jeopardize its investment. Three of the five approved slots locations have opened.

The company supports adding table games and transferring slot machine ownership to the operators, wrote Joe Weinberg, president of gaming, in an email.

“These changes would generate guaranteed and substantial incremental revenue for the State without risk of cannibalization of revenues between facilities,” Weinberg wrote.

O’Malley met with Baker (D), as well as Montgomery County Executive Isiah Leggett (D) and Baltimore Mayor Stephanie Rawlings-Blake (D), both of whom have spoken in support of expanding gambling, on Monday morning.

Rawlings-Blake supports the proposal put forward by O’Malley, which state analysts predict would be a net gain for Baltimore city, according to a spokesman. Baltimore is the planned site of another major casino.

The prolonged discussion about expanding gambling has led to the suggestion of several possible tax rates, casino sizes and various revenue and job creation estimates.

Although a full consensus wasn’t reached, a majority of the members of the state Workgroup to Consider Gaming Expansion supported opening a sixth casino in Prince George’s County with 3,000 slot machines and a slots tax rate of 62 percent.

To compensate the existing casinos, the Prince George’s facility would not open until at least 2016, and the facilities that would lose revenue — Maryland Live! Casino in Hanover and the planned casino in Baltimore city — would see their current, 67 percent tax rates decrease by at least 5 percent and as much as 10 percent, according to the work group.

Table games also should be approved, at a tax rate of 20 percent, as well as the transfer of the slot machines from the state — which currently owns or leases all of Maryland’s slot machines at a cost of about 11 percent of slots revenue — to the operators. The tax on slots revenue would drop by 5 percent to compensate for any additional costs, according to the work group.

dleaderman@gazette.net