In gambling, there are winners and losers. In the case of Baltimore's Horseshoe Casino, which recently celebrated its first anniversary, the big winners are the city and its taxpayers. Our company, Sage Policy Group Inc., recently conducted the first economic impact assessment of Baltimore's newest entertainment hub by analyzing data attached to its initial year of operations. We conclude that despite a lengthy winter coupled with a challenging spring and summer in Charm City, the Horseshoe has emerged as one of Baltimore's largest economic engines.
The $442 million facility maintains a head count of more than 1,800 personnel, ranking it among the top 15 private employers in the city. Were the ranking based on employment of city residents, the casino's standing would likely be much higher. Nearly 1,100 of the facility's employees live in Baltimore City. Once multiplier effects are considered, the facility supports the livelihoods of more than 2,000 Baltimore City residents and approximately another 1,000 people in other Maryland communities.
Like any operating entity, Baltimore's Horseshoe Casino requires goods and services from vendors, including local ones. Since opening on Aug. 26, 2014, the facility has spent nearly $19 million procuring items and services from Maryland-based enterprises, including $7 million from Baltimore City-based businesses. In all, the casino augmented statewide commerce by $461 million during its first year of operations. Of that total, 83 percent, or $384 million, took place within city boundaries.
(Sage Policy Group conducted its economic analysis on behalf of Sandy Hillman Communications, a Towson-based public relations firm that lists the casino among its clients. Sage is being compensated for its work, but the analysis represents our independent judgment.)
The casino's economic impacts are large, and its fiscal impact on state and local government budgets is simply massive. But public perception of the casino's success has failed to keep up with that reality, likely because of two state-funded projections of anticipated revenues that were conducted before the casino opened. The firms that produced those projections estimated that the casino would produce $30 million in revenues per month during its first year. It has averaged about $23 million instead, as neatly pointed out by The Sun's Jeff Barker.
Though our firm was not one of those asked to produce projections at that time, we certainly understand the temptation to adopt optimistic views and their capacity to influence projections. For instance, one could question the methodology behind forecasts that call for Horseshoe Baltimore to significantly increase its revenues in 2016 when the state's largest casino development project, the MGM Casino at National Harbor, is scheduled to come online. If one simply assesses the first year impact of the casino in the absence of any analytical baggage, it becomes abundantly clear that Baltimore has managed to secure another important economic anchor.
According to Baltimore City data, by paying $6.3 million annually, the Horseshoe Casino is now the single largest Baltimore City property taxpayer. Of course, that's hardly where the fiscal implications end. Under state law, 5.5 percent of profits from slots machines must be directed toward community impact grants that supply investment and programmatic capital to nearby neighborhoods, such as Westport and Pigtown. These grants help fund summer learning programs, increased law enforcement, streetscaping and employment centers.
During the last fiscal year, the casino generated nearly $6 million that would otherwise not have been available for such purposes. Many more millions of dollars can be expected going forward. There are some who say they had been hoping for $7 million or more, but there is no denying that $6 million is better than nothing, particularly when that money is dedicated to enhancing quality of life in ways that are defined by the neighborhoods themselves.
Plenty of people are coming into the region to spend time at the Horseshoe. During its first year, the facility attracted customers from all 50 states and five Canadian provinces, supporting roughly 10,000 hotel room nights in Baltimore City during what was otherwise a challenging time for local hospitality. Among other things, this helps to support the payment of hotel room taxes. There are income taxes on top of that.
In total, Sage estimates that the casino supported $16.6 million in city and state tax collections. Our assessment, which is based on actual operating data from a solid first year, can serve as a reasonable baseline by which to measure future casino impact.