Everything about the gleaming, $442 million Horseshoe Casino Baltimore, which is celebrating its one-year anniversary, seems outsized — including the expectations.
The Caesars property — with its 122,000-square-foot gambling floor, two-story video wall, outdoor terraces and restaurant marketplace — opened Aug. 26, 2014, with Las Vegas-style fanfare and high hopes for generating revenue and creating large numbers of jobs in the city.
A year later, Mayor Stephanie Rawlings-Blake hails the casino as a significant economic partner that will anchor the extension of the city's Inner Harbor tourism district past the Orioles and Ravens stadiums and into South Baltimore.
But Horseshoe, which some residents feared could be a magnet for increased crime and traffic, also appears to be handicapped by those early apprehensions and expectations as well as continuing concerns about the city's safety.
A pair of state-funded consulting firms projected in 2013 that its revenues would easily surpass $30 million a month in its first year, but it's averaged about $23 million instead.
"So many individuals have focused on these analysts' projections," said Chad Barnhill, Horseshoe's general manager.
He said the analysts could not accurately forecast economic and market conditions so long before the casino opened. Anytime experts try to forecast in advance, he said, "there are items that come up."
"Obviously we feel like there's still significant growth ahead of us," Barnhill said. "The ramp-up for new businesses sometimes takes a while."
But the disparity between forecasts and reality has meant significantly less money than anticipated for the state's Education Trust Fund and for community enhancement projects in neighborhoods near the casino.
"It's clear that it is below the estimates provided," said state Sen. Bill Ferguson, who chairs the Baltimore Casino Local Development Council, which advises the city on how best to use the funds derived from casino revenue.
Ferguson said the casino's revenues still have funded important projects, such as a just-opened employment center in the industrial Carroll-Camden area where it's located.
Under state law, 5.5 percent of slots profits must go to "community impact grants" near the casino for projects such as streets improvements, summer learning programs for young children and additional law enforcement. City and community leaders had expected $7 million to $10 million for such projects in nearby neighborhoods such as Westport and Pigtown during the last fiscal year.
Instead, only $5.9 million was made available.
The funding gap has squeezed some initiatives, contributing to the city's decision this year to "pause" the mayor's commitment to cut property taxes by 20 cents by 2020.
Still, the city says Horseshoe has created 1,100 jobs for city residents among 1,815 overall.
The January bankruptcy filing by the division of Caesars Entertainment Corp. that operates the casino hasn't affected its performance, Horseshoe officials said.
A recent economic impact study commissioned by the casino from Sage Policy Group found it generated nearly $384 million in commerce in Baltimore in its first 11-plus months. It said it paid more than $120 million in city and state taxes.
Horseshoe provides tax revenues "that Baltimore City otherwise would not have had, and is a significant creator of jobs for city residents," said Howard Libit, a spokesman for Rawlings-Blake. "That means payroll taxes. The casino has also been a driver of tourism and visitors to our city."
But the promise of jobs and taxes didn't quell residents' worries about opening a casino with the city's only round-the-clock liquor license.
Before it opened, a survey conducted by the Maryland Center of Excellence on Problem Gambling found that 63 percent of the area's residents expressed concern about increased crime, 63 percent said they worried about drunken driving and 55 percent feared traffic problems. The center, part of the University of Maryland School of Medicine, surveyed 1,100 people.
The new casino's image wasn't helped when a fight broke out in the food court on its opening weekend that was caught on video.
The center's researchers are compiling new survey data now gauging community perceptions about the casino one year later.
"We went back this summer to see if the community's attitude about the casino changed at all," said Kate Tracy, the primary investigator. "We didn't have as much enthusiasm for participation this time. It was harder to get people to say yes."
But Tracy said she doesn't know if that means residents' perceptions have shifted. The results aren't expected to be available until later this year.
In the three months ending June 30, violent crime was up 19 percent and property crime was down 1 percent compared to the same period in 2014 in neighborhoods that are considered part of the casino area, according to police statistics. The casino had not yet opened during that quarter in 2014. The neighborhoods include Cherry Hill, Federal Hill, Lakeland, Otterbein, Sharp-Leadenhall and Washington Village-Pigtown, among others.
In the previous quarter — the first three months of the year— violent crime was down 30 percent and property crime was down 29 percent compared to a year earlier.
"We have not seen a significant uptick in the surrounding communities of criminal activity," Ferguson said. "That is largely attributable to the increased presence of police officers and increased economic activity."
The April riots following the death of Freddie Gray from injuries sustained in police custody hurt Horseshoe's revenue, just as they affected attendance at other city attractions, Barnhill said.
He and others said Horseshoe still was learning about the preferences of the Baltimore market.
"It takes a while to understand who your customers are," said Gordon Medenica, director of the Maryland Lottery and Gaming Control Agency. "For example, the denominations on the floor — how many penny slots versus how many of the others, and the mix between slots and tables. And understand what marketing levers work.
"They will learn," he added.
Horseshoe became the state's fifth casino when it opened last August. MGM is scheduled to open the sixth at National Harbor in the second half of next year.
Analysts had projected Horseshoe would take a sizable bite out of the business of Maryland Live, the Anne Arundel County casino that opened in 2012. But despite their being just 12 miles apart, Maryland Live hasn't suffered anywhere near as much as predicted.
The state's largest casino, Maryland Live generated $626.2 million in revenue in the last fiscal year, more than double that of Horseshoe.
It's "remarkable given proximity in miles how little effect Horseshoe has had on Live," said David Cordish, chairman of the Cordish Cos., which owns Maryland Live. "We have unbelievable highway access, over 10,000 free parking spaces, and a mammoth suburban population to draw from. Horseshoe has its own market."
In July, Maryland Live's gross gaming revenue per unit per day was $291 for slot machines and $3,862 for "banking" games such as blackjack and roulette. Horseshoe's corresponding figures were $199 for slots and $2,088 for tables. Gross gaming revenue is what the casino keeps after players receive their winnings.
"The biggest issue for Horseshoe was the extent to which it was going to draw from Maryland Live," said James Karmel, a casino analyst and history professor at Harford Community College. "People living outside Baltimore are just much more comfortable playing in a suburban setting. And that was just exacerbated after the Freddie Gray situation with the riots."
The image that Baltimore is unsafe continues to haunt Horseshoe.
"There are probably more challenges with urban casinos," said Stephen Martino, the former state lottery and gaming director.
But he said Horseshoe has succeeded in growing the state's casino market.
"Notwithstanding not hitting some abstract revenue target," Martino said, "it has achieved its goals."