12:07 PM EDT, May 22, 2012
Our biggest concerns about the push to expand gambling at the end of this spring's regular session of the General Assembly were that there had been insufficient public debate about all of the changes slots boosters wanted to institute and that there was too little reliable information about the performance of Maryland's existing gambling program. Gov.Martin O'Malley's announcement Monday of a work group to expanded gambling in time for a possible special session of the legislature July 9 does nothing to erase those qualms. The idea of settling on a proposal for a sixth Maryland casino and for the legalization of table games in time for a referendum on the November ballot is fundamentally flawed and should be abandoned.
The crucial policy question for the state is whether adding another casino at National Harbor inPrince George's Countywould over-saturate the market, thus diminishing the chances that it and the state's other licensed casinos can succeed in the long term. Backers of the gambling expansion in the state Senate, led by Senate PresidentThomas V. Mike Miller, point to projections from the Department of Legislative Services that show a National Harbor casino would add substantially to the state's bottom line. But the jury is still out on just how good the DLS is at predicting slots revenue.
Maryland's two casinos that are already up and running are on track to produce about 30 percent less revenue this year than the DLS predicted they would — likely due in large part to the fact that the owners of those slots parlors have chosen to offer far fewer machines than the analysts expected. The take per machine, however, is running higher than projected. All that may change with the opening June 6 of the state's largest casino, Maryland Live!, at Arundel Mills mall. It will eventually have the full complement of 4,750 machines that it was allotted under the state's slots legislation, but there's no way to guess yet whether it will meet analysts projections' of significantly higher daily per-machine revenue than the existing casinos at Perryville and Ocean Downs. That question won't be answered by July 9. Nor will we have any idea of the impact of another large casino in Baltimore, where a license has not yet been granted.
The Senate's slots plan called for adjustments in the state's tax rate and other changes to the program to compensate existing casino owners for the additional competition a National Harbor casino would bring. But that amounted to speculation on top of speculation — a guess as to what effect a new casino would have on the revenue of two others that are not yet open. The potential for error is simply too great.
But even if the governor's 11-person commission is somehow able to overcome those obstacles and come to an agreement on the policy issues involved, it still seems inconceivable that the group will be able to forge the necessary political consensus in the General Assembly to make a special legislative session worthwhile. The work group is chaired by the head of the Maryland Stadium Authority, John Morton III, and includes four top members of the governor's staff plus six Democratic legislators — three senators with close ties to Mr. Miller and three delegates with close ties to House SpeakerMichael E. Busch.
Curiously, none of them are from Prince George's County, whose legislative delegation would be crucial to the outcome of any vote on a National Harbor Casino. Prince George's lawmakers stood firm against allowing a casino there during the initial debate over slots in 2007, but the county's executive, Rushern Baker, is now leading the charge for National Harbor. Republicans could also provide the crucial votes in the House, but none of them are on the work group either. (Two Prince George's lawmakers and two Republicans are listed as alternates to the committee.) Unless there is a solid political consensus for expanded gambling in both chambers, a special session would be a waste of time and money.
That said, the work group itself need not be a waste. The Senate's slots legislation earlier this year dealt with a number of other issues that Maryland could intelligently address now, such as whether it makes sense for casino operators, rather than the state, to purchase or lease the machines and whether the existing restrictions on the casinos offering players free food and drinks are necessary to protect other businesses — a particular concern in Ocean City.
But the big questions — whether the state should allow a sixth casino and table games, and what the tax rates should be for slots and for table games — should wait until we have some facts.
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