Maryland’s long-awaited, much-debated special General Assembly session to consider an expansion of gambling will begin Thursday, giving lawmakers a chance to pass a measure quickly so it can appear on the ballot in November.
The legislature will decide whether to allow Las Vegas-style table games at the state’s five approved casinos and whether to approve a sixth casino license to be located in Prince George’s County.
Some say the expansion will bring thousands of jobs and hundreds of millions in tax revenue; others say it will saturate the gaming market and eat into the revenues of the state’s other casinos.
The debate was put on hold when the General Assembly adjourned its regular session in April without a finished budget, and has now dragged into the summer.
Now, House Speaker Michael E. Busch (D-Dist. 30) of Annapolis and Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach, say each chamber can move forward again.
But no matter what happens in Annapolis next week, voters will get the final say: The Maryland Constitution requires voter approval for any expansion of gambling.
So before lawmakers reconvene, here’s a quick rundown of the major players and what they stand to gain — or lose.
Martin O’MalleyDespite his apparent ambivalence toward gaming expansion, which he called a “distraction” earlier this year, O’Malley has taken center stage in recent weeks as he attempted to broker a deal that House members would support.
Since many accused him of being out of touch with state affairs when the regular session ended in a budget stalemate, O’Malley may be using the special session to counteract that notion and show that he can deliver, said Todd Eberly, professor of political science at St. Mary’s College of Maryland in St. Mary’s City.
O’Malley himself has said expansion would quickly provide thousands of jobs and about $100 million for Maryland’s public schools.
Busch and MillerThe failure of a state work group to agree on an expansion proposal in June — because House members didn’t want to lower the state’s 67 percent tax on slots revenue — raised doubts about whether such a proposal could pass the House.
Now that the tax reduction is off the table, to be taken up at a later date, Busch says the 71 needed votes are there. Support in the Senate, which passed two expansion proposals during this year’s regular session, is considered a foregone conclusion.
But if the special session doesn’t bear fruit, it will raise the same questions about the competence of legislative leaders, and whether Busch and Miller hold as much power as they are assumed to hold, as the budget impasse did earlier this year, Eberly said.
Cordish Cos.The owners of the state’s largest casino, the recently opened $500 million Maryland Live! in Hanover, have consistently opposed allowing a Prince George’s casino, which they say will jeopardize their investment. The company does support allowing table games in the state.
This week, company officials met with members of the Anne Arundel delegation and presented a set of conditions that would make an expansion of gambling more palatable.
Among the conditions are a reduction in the state’s slots tax rate from 67 percent to 55 percent for Maryland Live! and to 60 percent for casinos in Perryville, Berlin, Baltimore and Prince George’s. The company also wants to limit the size of a Prince George’s casino to 3,000 slot machines and 100 table games without the possibility of adding more, and prevent that casino from opening until three years after the Baltimore city casino is open.
The state also could not create additional gaming sites for at least 10 years, and Cordish Cos. needed to approve draft legislation and get a guarantee that the terms would not be changed.
The company issued a statement Aug. 1 indicating that it remained adamantly opposed to adding a sixth site, and wanted to show what it would take to make such an addition fair.
But with a Prince George’s site conditional on the approval of voters in that county, Cordish Cos. could still walk away with table games but no major, new competitor.
Rushern Baker IIIThe Prince George’s county executive, who opposed slots as a state delegate, pitched National Harbor as the ideal site for a billion-dollar destination resort and casino earlier this year. Since then, he has fought hard for the project, and even called Busch a liar when the work group imploded in June.
Baker says the casino would be a major source of jobs and revenue for the county. On July 27 he expressed confidence that Prince George’s residents “would vote overwhelmingly for a sixth site.”
But if the county’s slots opponents, including several church leaders and former Del. Gerron Levi (D-Dist. 23A) of Woodmore, have their way, voters could still shut down Baker’s proposal.
“He’s put a lot on the line for it,” Eberly said. If it falls through, people will wonder whether Baker — whose ethics reform proposals have been moving forward slower than expected — can really deliver, Eberly said.
The gaming giant and lead investor in a planned, 3,750-machine Baltimore city casino is hoping the session will bring stability to the state’s gaming market, said Trevor Busche, vice president for corporate development.
Adding table games would make Maryland’s casinos more competitive with those in surrounding states, Busche said. “It’s going to allow us to build a more sustainable facility, it’s going to be better for the citizens in terms of gaming revenue,” he said. “I think it’s a win-win all around.”
But adding a sixth casino would require a “recalibration” of the revenue distribution to the existing licenses, Busche said.
MGM and Penn National
The legislation being crafted is expected to allow for competitive bidding for a Prince George’s casino, meaning that both MGM Resorts International — which has agreed to develop a facility at National Harbor and is Baker’s preferred choice — and Penn National Gaming could end up fighting for the sixth license.
Penn National, which also owns Hollywood Casino Perryville, has long advocated putting slots at Rosecroft Raceway in Fort Washington, but its proposal has been overshadowed of late by Baker’s and MGM’s plans for National Harbor.
Nonetheless, Penn National opposes rushing through the matter in a special session, given the “unequivocal support for the National Harbor site over any other” from Baker and O’Malley, according to Karen Bailey, a spokeswoman for the company.
Maryland’s public schools
A major selling point of anything gambling-related in Maryland is the use of slots revenue to support public education through the state’s Education Trust Fund.
Although it hasn’t brought a net increase in state aid to local school systems, the trust fund has helped maintain funding levels during the economic downturn.
The state work group estimated that changes to the state’s gambling program — including a sixth site, table games and adjustments to the tax rate — could ultimate bring as much as $223 million in annual revenue to the trust fund. When he announced the session, O’Malley suggested an immediate impact of about $100 million.
The benefits may not come directly from the session, but will be visible when next year’s budget is drafted, said Sean Johnson, managing director of political and legislative affairs for the Maryland State Education Association, which has not taken an official position on the session but wants any increase in the fund to translate into a gain in overall education funding, not just an offset of general fund spending.
Peter FranchotThe state comptroller — who opposes slots, is a frequent critic of O’Malley and is a likely 2014 gubernatorial contender — is likely to benefit if the gambling expansion fails, or if voters perceive that a lot of under-the-table deals were made to secure votes, Eberly said.
That would create a situation “almost tailor-made for Franchot to run,” Eberly said. “It will feed the narrative of what he says is wrong.”