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The shaky case for Question 7

Casino and Gambling IndustryPenn National Gaming

The latest argument from the proponents of a ballot question that would allow a sixth casino and table games in Maryland is a familiar one: Failing to legalize more gambling in the state will mean hundreds of millions of dollars flowing out of Maryland and into West Virginia, where the money will boost the economy and pay for schools. It was a key element of the campaign to legalize slots in Maryland four years ago, and it has intuitive appeal. If Marylanders are gambling anyway, why not have them do it here?

Clearly, there must be a significant amount of Maryland money flowing now to Penn National Gaming's casino in Charles Town, W.Va. Why else would the company be spending tens of millions of dollars to defeat the measure? But is it really the $1.1 billion to $1.5 billion the Baltimore-based Sage Policy Group estimated in a study it conducted for the pro-Question 7 ballot committee? And is a Prince George's casino the answer to the problem?

The Sage study contends that 30 percent to 37 percent of Charles Town's revenue comes from Marylanders. As evidence, it points to a study by the Maryland Department of Labor, Licensing and Regulation and a fiscal analysis by the Department of Legislative Services. In both cases, the estimates are based on anecdotal evidence, and there is good reason to think that even if they were once accurate, they aren't now. Both documents were prepared in 2007, before Maryland legalized slot machines, before West Virginia moved to table games and before Pennsylvania's gambling program had gotten off the ground.

The study attempts to correct for the presence of Maryland's slots program by looking at the year-over-year decline in Charles Town revenue in the months since the Maryland Live casino opened in Anne Arundel County and by making some educated guesses as to what the impact of a Baltimore casino will be once it goes on line. But it may underestimate how much Charles Town's revenue has dropped. The study reports that the initial decline has been a modest 6 percent. But figures from the West Virginia Lottery show that revenue at Charles Town had been on the rise before Maryland Live opened — perhaps the result of improving economic conditions or other factors. Average weekly revenue at Charles Town is 14 percent lower since Maryland Live opened than it was during the first six months of 2012.

Whether it's $1.5 billion Maryland is losing to West Virginia or a smaller figure, the fact remains that Penn National is investing heavily in Question 7's defeat, and that must mean something. But the implication of the Sage study — that a casino at National Harbor is necessary to recapture those dollars — is also unsupported by the evidence.

The Sage study claims that the biggest source of revenue loss for Maryland comes from Montgomery County gamblers who now head to Charles Town and that a casino in "far-western Prince George's County," as the report repeatedly puts it, is the cure. As proof, the report includes a chart showing the distance and drive time from various Montgomery County communities to Charles Town and compares them to the distance and time to National Harbor. Indeed, it would take much less time to get from Bethesda, Gaithersburg, Rockville or Silver Spring to National Harbor than to Charles Town, an average of 43 minutes versus 70.3 minutes. But as the chart points out, there is virtually no time savings for National Harbor as compared to Maryland Live (43.5 minutes) or the future site of the Baltimore slots parlor (45.8).

Even if the Sage report is right that Question 7 would recapture some revenue Maryland is now losing to Charles Town, it fails to ask the key question: recapture it for whom? According to Department of Legislative Services figures, casino owners would get about 75 percent of the new revenue generated by Question 7. It may be in Maryland's best interests to make some changes to its gambling program to make it more competitive with West Virginia and other states. But Question 7 is not the way to do it.

Correction: An earlier version of this editorial incorrectly reported the change in revenue at Charles Town since Maryland Live opened. The Sun regrets the error.

Copyright © 2014, The Baltimore Sun
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