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Maryland Live is weathering storm of new competition

The president and general manager of Maryland's largest casino delivered a bit of unexpected news Monday to state gambling regulators.

"November is trending exceptionally well," Robert Norton of Maryland Live said at a meeting of the Maryland Lottery and Gaming Control Commission. If the trend holds this week, Norton said, the Hanover casino's November revenue will top that of the same month a year earlier.

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This wasn't supposed to happen. Three months after the opening of Horseshoe Casino Baltimore a dozen miles away, Maryland Live was predicted to be feeling the pinch of increased competition. Consultants said last year that Maryland Live could see a roughly 20 percent drop in revenue.

"It's too early to say they're wrong, but it isn't going to be anything like 20 percent," said David Cordish, chairman of the Cordish Cos., which owns Maryland Live and last week secured a license with a partner to develop a $500 million casino and hotel project in Philadelphia.

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"I feel very, very confident it's going to be negligible," Cordish said of the Horsehoe-induced hit.

Even as four Atlantic City, N.J., casinos have closed in the past year due to increasing competition along the East Coast, the appetite for gambling in Maryland has seemed to increase. Now Cordish is gambling that the Philadelphia market is ripe for more, despite the presence of four casinos in the metro area.

"We're seeing a growth in the market," Maryland State Lottery and Gaming Control Agency director Stephen Martino said at Monday's meeting. He said the predicted cannibalization of Maryland Live revenue "has not materialized."

The Atlantic City casino closings generated widespread attention to growing casino competition nationwide as more states embrace gambling as a revenue fix. In Indiana, gambling revenue dipped after an Ohio casino — a Horseshoe in Cincinnati — opened last year. In West Virginia, the Hollywood Casino at Charles Town Races, already challenged by Maryland's existing casinos, faces a stern test from the planned $925 million MGM casino due to open at National Harbor in Prince George's County in 2016.

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But experts say regional casinos still can thrive.

Casino gambling "has become a convenience market," the Pennsylvania Gaming Control Board wrote in its decision last week awarding the Philadelphia casino license to Cordish and Greenwood Gaming, owner and operator of Parx Casino in Bensalem, about 20 miles north of Philadelphia. "People will gamble closer to home rather than traveling a distance. The former patrons of the closed Atlantic City casinos will not simply stop gambling — they will gamble somewhere else."

In selecting Cordish's group over three other applicants — two other competitors dropped out — the board rejected the argument of SugarHouse, an existing Philadelphia casino, that the market could become saturated.

"Like any other business, the more competition there is, the less business for everybody else," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. "If you own a casino, you don't want to see other casinos open up. But revenue is still growing overall. There is still growth."

The board selected Cordish's group partly because of its planned casino's location. It will be beside Philadelphia's stadium complex, right off the Schuylkill Expressway and close to Interstate 95, and away from the traffic snarls of the city's center.

The board concluded that there would be "synergy" between the casino and more than 400 stadium-area games and concerts each year.

Cordish said the accessibility and parking options of the Pennsylvania and Maryland casinos are key to their success. Maryland Live, adjacent to Arundel Mills mall, offers 13,000 free parking spaces. The Philadelphia casino will be next to large stadium lots and is to include a 2,600-space parking garage.

"People who gamble drive. It's as simple as that," said Cordish, interviewed in his office overlooking the Inner Harbor.

Maryland Live, which opened in 2012, has become one of the East Coast's largest casinos. In March, its best month to date, it generated $61.8 million in revenue.

In September, the first full month of Horseshoe's operation, its revenue fell 9.8 percent to $45.5 million compared with a year earlier. The hit was smaller — 3 percent — in October on revenue of $50.3 million. Horseshoe's revenue totaled $22.5 million.

Maryland Live has 4,222 slot machines and 189 table games, according to the state. Horseshoe operates 2,500 slots and 122 table games.

Even with Horseshoe's arrival, Cordish believes Maryland Live still has distinct appeal.

"We have a suburban market and they have a Baltimore city market, and it's really not affecting each other," he said.

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