National Harbor's hired expert on the gambling industry is predicting that the Cordish Cos.' Maryland Live! casino at Arundel Mills would enjoy an $84 million annual windfall from a gambling expansion plan favored by the developers of the Prince George's County complex.
Predictably, Cordish Cos. chief executive David Cordish is not impressed
Andrew J. Moody, head of Business Research and Economic Advisors, sent a report to a state-sponsored work group on gambling expansion, in which he projects that Maryland Live!, which opens Wednesday night, would see a small drop in gross revenues because of competition from National Harbor but would net more money because of a lower tax rate in the plan to add table games and allow a sixth casino in the state.
Moody also predicted the state would gain $54.3 million a year in additional revenue, even with the tax rate lowered from 67 percent to 52 percent on slot machines and fixed at 10 percent on table games.
Cordish, whose company opposes any additional casinos at least until his Arundel Mills facility is firmly established, dismissed the report.
Rhetorically, he suggested asking Moody and his clients how much they now have invested in Maryland gambling.
"The answer to both is zero," said Cordish, whose company has spent more than $500 million on its casino. Cordish predicted Moody's numbers would not be upheld by the state's consultants from PricewaterhouseCooper, who are expected to produce their own report for the work group.
Cordish also questioned Moody's projection of additional state revenue.
"It's incredible that even with his inflated numbers, at the end of the day, the state is right back where it started," he said, calling a $50 million gain on total projected state revenues of $1.2 billion the equivalent of a rounding error.
"Why would the state risk an entire structure for ($50 million)," the developer demanded. Cordish has contended that industry projections of future revenues are unreliable, pointing to inflated predictions of business levels at the slots facility at Ocean Downs.
Moody's estimates for the 2016 budget year are predicated on a "destination" National Harbor casino with 3,000 slots, 200 table games, a 500-room hotel, multiple restaurants, a night club, a spa and retail shops. The proposal to open a casino there has the strong backing of Prince George's County Executive Rushern Baker and Senate President Thomas V. Mike Miller.
In his report, Moody predicts that all the players in the Maryland casino business would benefit from the scheme National Harbor favors. He projects gains in net revenue gains ranging from 54 percent at Arundel Mills to 173 percent at the yet-to-open casino planned for Rocky Gap in Allegany County. He's also forecasting that Caesars Entertainment, the sole applicant for a license in Baltimore, would see a 69 percent net gain. Caesars supports an expansion along the lines proposed by National Harbor's developer, the Peterson Cos.
The work group is expected to issue recommendations June 20. If it can reach a consensus that is likely to pass both the House and Senate, Gov. Martin O'Malley has said he will call a special session July 9 to consider gambling expansion.
Copyright © 2014, The Baltimore Sun