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A Few Things To Consider When Gambling Vote Comes

By Bill Ordine

Marylanders will have an opportunity on Nov. 6 to decide whether to expand gambling houses.

Proponents of increased in-state gambling are urging voters to vote yes on a referendum known as Question 7, which would allow for a sixth Maryland casino in Prince George's County, plus live table games at all the state's casinos. The new casino and the table games would mean thousands of new jobs, and additional tax money from expanded gaming would help fund education, supporters say.

But there is opposition coming from competing gaming interests, who contend that the referendum question is the result of backroom deals in Annapolis that benefit specific casino companies. Plus, there are complaints that casinos will be getting a break on the current tax on slots, which is 67 percent.

Like many political campaigns, this one is fraught with charges that each side is misleading the public. Tens of millions of dollars are being spent to persuade voters.

"The education obligations to the state go up every year," said Kristen Hawn, a spokeswoman for the proponents of expanded gambling. "If that money isn't coming from gaming [taxes], then [other] taxes are going to go up."

Kevin McLaughlin, who represents the opposition, contends that the process to forge the referendum question was done in secret, that it benefits certain casino interests (such as MGM Resorts International) and rushes further gaming development in Maryland when only three of five originally approved casinos are open.

Penn National Gaming, with casinos in West Virginia, Pennsylvania, Perryville and elsewhere, is leading the charge against Question 7 approval, which would likely hurt its overall business.

Among the most affected constituencies in the debate are those Marylanders who enjoy gambling as entertainment and frequent casinos. Here are some things for them to consider.

Live Table Games
Currently, Maryland casinos can have electronic table games. The ones at Maryland Live! approximate the odds on live table games. But for many gamblers, those electronic table games lack the pizzazz and social interaction of the real thing. High rollers won't wager big bucks when a computer deals the cards. They want to see real cards being flipped. With casinos in Pennsylvania, Delaware and West Virginia having actual table games, many Maryland casino-goers have to invest extra time, gas money and tolls to get the kind of action they want. Meanwhile, Maryland casinos and taxpayers lose out.

That Casino In Prince George's County
This is the heart of the debate for the two battling sides. Penn National owns the Hollywood Casino in Perryville, which has taken a revenue nosedive since Maryland Live! opened, and it has two axes to grind. One is that its successful casino in Charlestown, W.Va., which attracts many Maryland customers, would take a substantial hit from a gambling hall in Prince George's County. Second, MGM Resorts and Peterson Companies have the inside track for the sixth casino at National Harbor, to the exclusion of Penn National's own site at Rosecroft Raceway in Fort Washington.

For gambling customers, an MGM-built-and-operated casino comes with a track record. MGM's casino development hasn't been flawless, but the company has built and operates some of the best-known casinos in the world. It promises to offer a distinctive gaming experience, and it will attract out-of-state customers and money, mainly from Virginia and Washington, D.C.

Taxes
So far in 2012, Maryland's three casinos have accounted for $167.4 million in state revenues and other mandated purposes. Of that amount, more than $121 million has been for education. Without the revenue from the casinos, the state would be coming to taxpayers for the money. Gaming expansion critics are arguing that there is no guarantee the additional tax revenues would go specifically to education. But here's the point: whether the money that comes from additional gaming -- and it figures to be hundreds of millions of dollars -- goes to classrooms, or to roads and bridges, that's money that doesn't have to be raised through income taxes, real estate taxes or sales taxes.

Benefits To Casino Customers
The perks that casinos can provide their customers are directly related to revenue. Having table games, with an accompanying tax rate on slots that's lower than 67 percent, would give casinos more latitude to offer players more generous promotional programs. That would mean more and better comps, giveaways and gaming perks. Plus, there will be the benefits of competition. Casino owners in neighboring states that have come to rely on Maryland customers would have to offer those patrons special incentives to get them to continue traveling out of state. As gamblers know, the house always has the advantage. More competition is one of the few, but most effective ways to shave that edge.

Issue 178: October 2012