Committee Scrutinizes Gambling Expansion That Would Benefit Casinos - Southern Maryland Headline News

Committee Scrutinizes Gambling Expansion That Would Benefit Casinos

By Megan Poinski,

ANNAPOLIS—The House Ways and Means Committee on Tuesday scrutinized a plan for a referendum that could bring table games and a sixth licensed casino to Maryland. Key leaders expressed doubts about the financial sweeteners for casino operators in the bill which passed the Senate March 23.

At issue is the bill proposed by Sen. Douglas Peters (2012 Senate Bill 892), D-Prince George’s, to put a referendum on the November ballot asking the state’s voters if they support a constitutional amendment that would give a far-ranging expansion of gambling in the state. The legislation adds a sixth licensed casino location in the National Harbor complex in Prince George’s County and allows table games at all casinos in the state. The bill also changes how revenues are divided between operators, the state, and local governments and authorizes the operators to buy or lease the video lottery terminals, which are now purchased by the state.

Even if this expansion of gambling passes statewide, voters in Prince George’s County must approve it to allow National Harbor Casino to be built.

Is it fair to the other operators?

Del. Andrew Serafini, R-Washington, asked Peters if adding a sixth casino to the state would be fair to the other five.

“This is obviously something that’s going decided by the legislature,” Peters said. “On the Senate side, we think we put enough sweeteners in to be fair. …Most of the VLT operators want table games.”

The Senate added provisions to their version of the bill that would increase casino operators’ share of the revenues by 8%. In exchange for a larger piece of the revenues, operators will have to purchase machines for their casinos. The state has purchased machines for the two casinos currently in operation and has a contract to buy machines for the not-yet-opened Maryland Live! casino at Arundel Mills.

Peters said that the state spends about 14% of casino revenues on machines.

The bill would also allow operators to keep 90% of proceeds from table games. The other 10% would go to the local jurisdictions and nothing from table games would go directly to the state.

Not sweet enough for the state?

Throughout the hearing Del. Frank Turner, D-Howard, chairman of the gambling subcommittee, wondered what “rational reason” the state would have for going forward with this sort of plan.

“It sounds like this is a substantial benefit to the operators,” Turner said.

Most of the new funds, Turner said, would not be going to the Education Trust Fund, as current revenues from slots do. Del. Eric Luedtke, D-Montgomery, had similar concerns.

“The vast majority of new revenues under this bill are going to operators, not the state,” said Luedtke. “It seems like a colossally bad deal for the state. When we’re getting such a small portion of this money, why is this a good deal for Maryland?”

Victoria Gruber, chief of staff to Senate President Mike Miller, responded that table games do not generate a high amount of revenues.They are best at attracting gamblers to the state who may be likely to spend more money.

Gruber also said that table games create jobs, which is where the state is looking to make money. Table games require dealers as employees, she said.

House Majority Leader Kumar Barve, Montgomery, and Del. Carolyn Howard, D-Prince George’s, asked why there was a push right now to add a sixth licensed casino. Only two – Ocean Downs and Perryville in Cecil County – are currently operating. The Arundel Mills casino is set to open this summer, while contracts to operate the other two licensed casinos in Baltimore City and at Rocky Gap resort are pending.

Peters responded that it takes several years to go through the process to create new casinos, and this is just the beginning. If a National Harbor casino is approved, it will not be operating for several years.

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