2:15 PM EDT, August 1, 2012
Let the special interest deal making begin.
A week before the General Assembly is set to return to Annapolis to consider an (as yet undefined) plan to expand gambling, David Cordish, the developer of the state's largest casino, has issued his list of demands for the legislation. If the state authorizes a sixth casino in Prince George's County, as Gov. Martin O'Malley and Senate President Thomas V. Mike Miller have proposed, Mr. Cordish wants a 12-percentage point cut in his slots tax rate (and a more modest reduction for everyone else). He wants table games (as do Messrs. O'Malley and Miller) but at a lower tax rate than a state work group on gambling expansion recommended. He wants Internet gambling, taxed at 10 percent, a delay in the opening of a Prince George's casino until 2017, and a moratorium for 10 years on further gambling expansion, among other things.
You can't fault the guy for trying.
But Mr. Cordish's letter, first reported by the Annapolis Capital and the Washington Post, underscores the likelihood that the rush to expand gambling in Maryland in a special legislative session will amount to an effort to balance the competing interests of casino owners and developers, not a deliberative exercise in determining what is in the best interests of the state.
Mr. Cordish has emerged from the machinations over Maryland gambling as a generally sympathetic figure. He is a local boy made good who has invested heavily in his Maryland Live casino at the Arundel Mills mall. His facility is by far the most lucrative in the state, and it is likely to become more so as his vision of a first-rate entertainment complex of gambling, live music and restaurants comes to fruition. As Mr. Cordish's defenders like to say, he has played by the rules, why would we want to put him at a disadvantage?
But when Mr. Cordish was reading those rules that he has followed, he surely noticed this provision tucked in the constitutional amendment that legalized slots four years ago: "The General Assembly may only authorize additional forms or expansion of commercial gaming if approval is granted through a referendum, authorized by an act of the General Assembly, in a general election by a majority of the qualified voters in the State."
When Mr. Cordish was bidding on a slots license, when he was developing his business plans for his casino, and when he was investing some half-billion dollars in the facility, he knew, or should have, that future gambling expansion was a possibility. He is demanding now to be held harmless from the effects of any such expansion, but that's not the deal he or anyone else in the Maryland gambling industry signed on for.
Indeed, the experience of other states is that once gambling is established, there is an almost inexorable drive to expand it. That said, Mr. Cordish might not have bargained on the state being so foolish as to try to do so this quickly.
Maryland should be extremely mindful of the extent to which a gambling expansion would hurt the viability of Maryland Live or the as-yet unbuilt Caesars casino in Baltimore — not because of a need to be fair to Mr. Cordish but because it is in our best interests. Casinos do go bankrupt, and Maryland needs to be sure that if it is expanding the number of gambling licenses in the state, it is not simply cannibalizing existing business. The last thing we need is a gleaming new casino at the National Harbor development in Prince George's County and an empty shell at Arundel Mills or in downtown Baltimore.
That doesn't mean Maryland shouldn't ever change the terms of its gambling law or that a National Harbor casino might not someday be a good idea. But it needs to be done carefully so that we protect existing casino owners while simultaneously maximizing the state's take. That will always be a difficult task, but it would be made harder by attempting it with extremely limited data about Maryland's gambling market and none at all about the competitive relationship between Maryland Live and the Baltimore casino. Trying to do it in the high-pressure atmosphere of a special legislative session would be next to impossible.
Rather than a thoughtful discussion among our elected representatives about what's in the state's best interests, what we're likely to get is a battle over who wields the most influence in Annapolis: the Cordish Cos.; Caesars; the development team behind the National Harbor proposal; and Penn National, which owns Hollywood Casino in Perryville and Rosecroft Raceway in Prince George's County, but more pertinently, one of the most profitable casinos in the country in Charles Town, W.Va.
Legislators can make productive use of their time when they come back to Annapolis next week. They could transfer the responsibility for purchasing slot machines from the state to the casino operators, a move expected to net the treasury $80 million a year. They could lift some hours-of-operation and other restrictions on the existing casinos. And they could take up a bill to counteract the effects of a recent Court of Appeals ruling on pit bulls. But as for expanded gambling, they — and the taxpayers they represent — would be better served to wait.
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