Horseshoe, Maryland Live casinos want to reduce slot machines and add table games

Baltimore's Horseshoe Casino, which opened in August, shouldn't be affected by the expected bankruptcy of the unit of Caesars Entertainment that operates it.

The state's two largest casinos — Maryland Live and Horseshoe Baltimore — each proposed eliminating 300 slot machines and adding additional table games, from which the casinos keep more of the revenue, according to state documents.

Maryland Live, which has 4,222 slots and 189 table games, recently submitted a request to the state to remove 300 machines and add at least 13 table games.


Horseshoe, which has 2,500 slots and 147 table games, requested eliminating 300 slots and adding 30 table games.

The requests were disclosed in memos written by state gaming regulatory staff, which recommended that the proposals be approved. The requests are scheduled to be considered during Thursday's meeting of the Lottery and Gaming Control Commission.


Under state regulations, casino operators are permitted to keep 80 percent of the proceeds from table games and 33 percent from slot machines. Most of the rest of the money goes to state programs such as the Education Trust Fund.

A consultant's analysis estimated the state would lose $498,000 in short-term revenue if Maryland Live reduced its number of slots by the requested amount, regulators said in a memo. They did not define short term, though in previous reports it has meant about a year.

Robert Norton, president and general manager of Maryland Live, disagreed with that assessment.

"I think different people can look at the same sets of data and draw different conclusions," Norton said in an interview on Tuesday. "From our track record, we've proven our ability to analyze what the market demand is. Will [Cummings] is putting out that he believes there will be a negative impact, and I don't see it that way. We've got specific plans associated with the space that these 300 machines take up. We're going to add table games and food and beverage."

The consultant, Will Cummings, concluded that at Horseshoe, the net effect of reducing slots and adding the table games would be a short-term gain for the state of $260,000, according to a second regulatory staff memo.

The loss of slots revenue, Cummings concluded, would "be offset by the additional table games and to some extent by improved economic efficiency and better adaptability to market conditions," the second staff memo said.

Horseshoe opened Aug. 26 and has underperformed state expectations by about a third, due in part to stiff competition from Maryland Live, a dozen miles away at Arundel Mills mall in Hanover. Horseshoe reported $22.9 million in revenue from slot machines and table games in December, down about 2 percent from November. The revenue was split almost evenly between slots and tables games.

Maryland Live reported revenue of $50.2 million — $31.6 million from slots and $18.6 from table games.


Horseshoe said it is still adjusting to the market.

"We are constantly evaluating the mix of games we offer our guests to meet evolving customer demands," Horseshoe general manager Chad Barnhill said Tuesday in an email. "There's no question that Baltimore has proven to be a very strong table games market."

Despite not meeting state consultants' revenue projections, Barnhill said, there has been no across-the-board reduction in the casino's staffing hours.

"Short-term fluctuations occur in departments for a wide range of reasons," he said. "Now that the Ravens season has concluded, for example, we are hosting fewer tailgate parties and other events on our outdoor entertainment plaza. As a result, the number of hours we are programming and staffing that location is reduced. When spring brings warmer weather, outdoor programming and man-hours will once again increase."

Reductions in Horseshoe's slot machines could mean less money for community projects in the city. Under state law, 5.5 percent of slots profits must go to "community impact grants" that are used for such things as police patrols surrounding the casino, a streets study and an employment center.

State Sen. Bill Ferguson, who chairs the Baltimore Casino Local Development Council, said Tuesday that it is the state commission's job to monitor the mix of slots and table games. The council advises the city on how best to use the funds derived from casino revenue.


"I defer judgment to the commission," Ferguson said. "They handle these issues regularly."

Last week, the division of Caesars Entertainment Corp. that operates the Horseshoe filed for bankruptcy protection. Caesars said it would have no impact on Horseshoe's operations. The Maryland attorney general's office is assisting state regulators in monitoring "the impact of Caesar's financial status on Horseshoe Casino Baltimore," the office said in a report last week to the commission.