The Senate's casino giveaway

A bill allowing table games at Maryland's five casino sites and creating a sixth in Prince George's Countypassed the Senate last week and arrived in the House of Delegates with some momentum in advance of a hearing today. It has the backing of Prince George's County Executive Rushern Baker — who, in a previous life as a state delegate, opposed slots — and of Baltimore MayorStephanie Rawlings-Blake, and that has scrambled somewhat the House's typical reluctance to embrace gambling. Mr. Baker and Ms. Rawlings-Blake have a simple and understandable reason for backing this bill: It would send tens of millions in new revenue to their cash-strapped governments. But delegates have an equally simple and understandable reason to reject the legislation: It would produce a massive windfall for the casino operators and a pittance for the state.

Mr. Baker estimates that the legislation, which would allow a 4,750-machine casino at either Rosecroft Raceway or National Harbor, would generate $47 million a year in revenue for Prince George's County government. And despite the fact that a new mega-casino just outside Washington, D.C., and just across the Woodrow Wilson Bridge from Virginia's tony suburbs would increase competition for a yet-to-be-approved Baltimore casino, Ms. Rawlings-Blake is pointing to an expected $10 million in new taxes for the city if the bill is passed by the General Assembly and approved by voters at referendum. Caesars Entertainment Corp., which is the lone bidder for Baltimore's casino, is backing the bill, too, promising a significantly upgraded facility and more jobs if it gets table games.

But where the interests of the entire state are concerned, this particular bill fails badly. In order to win the support it has, this legislation has been larded up with giveaways that likely would not stand on their own. And it comes a few months before the state's largest casino is scheduled to open at Arundel Mills, days before a license is likely to be awarded for a small casino at Rocky Gap, and a matter of weeks before a decision is due to be made on a license for Baltimore's casino. Creating a new gambling program before the current one is even off the ground puts the cart well in front of the horse.

The bill is essentially being sold as adding a sixth slots facility and bringing table games to Maryland. But it does a lot more. Among the major changes it would make to Maryland gambling law: It allows a slots licensee to own two Maryland casinos, rather than just one; increases operators' take from slots from the current 33 percent to 41 percent (and if a Prince George's slots parlor is built, 48 percent ); changes investment levels for potential casino operators; makes the slots operators, rather than the state, responsible for the purchase or lease of the machines; allows slots parlors to give away free food and drinks; and lifts restrictions on convention and entertainment facilities at Ocean Downs.

As for the table games portion of the proposal, slots operators who want to add blackjack, poker, roulette and the like would be charged no license fee for the privilege and would get to keep 90 percent of the revenue. The local government where the casino is located would get 10 percent. The state would get nothing.

The result is a massive giveaway to Maryland's casino operators. According to estimates from backers of a possible National Harbor casino, the various changes in this bill would increase Maryland's overall gambling revenue by more than $1 billion in 2016. Of that, the casino operators would take home $878 million, and the state just $107 million. Another $52 million would go to local governments. The Department of Legislative Services projects an even smaller revenue boost for the state. If Maryland is going to expand its gambling program, why would it do so in a way that is of so little public benefit?

Some of individual elements in this legislation may ultimately be good ideas for the state. A well-structured bill to legalize table games, for example, could benefit the treasury while increasing the employment and economic development potential of the state's casinos, all while drawing a wealthier clientele. It seems inevitable that the state will eventually allow them. But the Senate's legislation proposes a wide range of changes to a gambling program that is not yet fully formed. It is difficult to judge how well the current law is serving the state's interests — or to estimate the impact of adding another casino or another form of gambling — when Maryland's two largest slots parlors are not even open for business.

Increased competition for gambling dollars from neighboring states may well call for eventual changes, large and small, to Maryland's law. But now is not the right time, and this is most certainly not the right bill. The House of Delegates should reject it.

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