Studies project millions in tax revenue from Rosecroft slots

Renewed jostling to expand gambling in the state began Wednesday as a national casino operator painted its proposal to build a casino in Prince George's County as good for taxpayers and as Frederick County lawmakers asked constituents if they want slots there.

Penn National Gaming, which owns a slots parlor in Cecil County, released economic impact studies that found that slots at its Rosecroft Raceway horse-racing track in Prince George's would generate at least $346 million in tax revenue in the first year of operation.

Meanwhile, members of the Frederick County legislative delegation hosted a public hearing Wednesday evening to gauge the level of support for or opposition to allowing a slots parlor to be built there.

Neither jurisdiction is among the five designated slots locations under the state's gambling program. But state lawmakers are expected to consider legislation next year to expand Maryland's menu of gambling options.

Senate President Thomas V. Mike Miller said in an interview that the state should "move forward expeditiously" to consider allowing table games — which are legal in adjacent states such as West Virginia — and adding slots at Rosecroft Raceway.

"I'm not afraid of the issue," said Miller, a Prince George's County Democrat who has been a vocal supporter for slots at the harness track in his county. "Let's make it happen."

Adding new locations to the state's slots program would require passage of a referendum to change the Maryland Constitution — a high hurdle for Penn National and others seeking to expand gambling in Maryland.

And not everyone approves of fiddling with the existing law.

"The people of Maryland did not vote in our Constitution to allow casinos on every corner," said David Cordish, whose company is developing a casino at the Arundel Mills mall in Anne Arundel County. Cordish referred to previous proposals to build a casino at Baltimore-Washington International Thurgood Marshall Airport as well as the new proposals calling for casinos in Frederick and Prince George's counties.

"It is not going to happen at any of these locations for a multitude of reasons," Cordish said in an email.

Sen. David Brinkley, who chairs the Frederick County delegation, said putting slots in his county doesn't make sense, despite a push by some lawmakers in the last legislative session to legalize slot machines there.

"When the state looks at it strategically, it's not a prime location," said Brinkley, noting that Frederick County was not high on the list of profitable gambling locations in a study done several years ago.

Frederick County Del. Kathryn Afzali said she did not "care" for gambling, but she and two colleagues requested a public hearing to gauge the appetite for legalizing slots in the county. According to the results of a survey of 480 constituents, about 54 percent oppose slots, while 38 percent support them. The rest said they didn't care, Afzali said.

"We want to listen to what the citizens have to say and then make a determination with all the information we have on whether it's good or not for Frederick County," she said.

In Prince George's County, some groups, particularly churches, have opposed slots. Some local officials are also fighting efforts to allow the gambling machines.

Penn National acquired the once-bankrupt Rosecroft Raceway earlier this year for $12 million. Rosecroft reopened in August after being shuttered since last year. Live racing is to resume at the track this month.

Penn National officials are hopeful that opposition to slots in Prince George's County is slowly waning. The county delegation vehemently opposed slots in 2007 when lawmakers established the five locations in the state.

"As we move forward with Rosecroft, we do see a change in perspective from members of both the state delegation and local elected officials at least to consider an opportunity for slots in Prince George's County and specifically at Rosecroft," Penn National spokeswoman Karen Bailey said.

The state now has two casinos, Penn National's Hollywood Casino Perryville and Ocean Downs, near Ocean City. Revenue at the facilities has come in below state expectations.

The Perryville casino has ramped up its marketing and this week won approval from Perryville's commissioners to erect a 195-foot-tall sign that officials hope will attract some of the tens of thousands of motorists who travel along nearby Interstate 95 every day.

On Wednesday, the Maryland Lottery reported that the two parlors had generated nearly $14 million in gross revenue in September, an uptick from the previous month's $13 million. The Perryville casino brought in the bulk of the revenue with $9.3 million, while the Casino at Ocean Downs generated $4.7 million.

Of the remaining three slots locations, the first phase of the slots parlor in Arundel Mills mall is expected to open next June, and the state recently received bids for two proposed casinos, in Baltimore City and Rocky Gap in Western Maryland.

Penn National commissioned one study examining the economic impact of a slots casino at the racetrack. A second study looked at the revenue potential based on three scenarios: Rosecroft would operate slots only, slots and table games, and table games only.

The market analysis, which assumes that the track would operate 6,500 slot machines, projects tax revenue to range from $346 million in 2013 to $415 million in 2017. Under the state's slots program, the state gets 67 percent of gross revenue, while the casino operators take a 33 percent cut.

Based on the slots-only revenue, the casino at Rosecroft would average $218 per machine daily in 2013 and $261 per machine daily in 2017.

That per-machine figure is higher than what the state had projected for three of its five locations, including Perryville, but lower than the $315 estimate for the Anne Arundel County and Baltimore City casinos. Those two locations are authorized to have 4,750 and 3,750 machines each.

Estimates for tax revenue are slightly higher under the slots and table games scenario: $366 million in 2013 to $418 million in 2017. A table games-only scenario would bring in the least amount of tax revenue: $18 million in 2013 to $21 million in 2017.

Penn National has a mixed history with Rosecroft. The company agreed to purchase the track in 2007, but it dropped its bid when the facility was not designated a slots site in a referendum a year later. Company officials have guaranteed live racing at Rosecroft only through 2012 with the hope that slots could be allowed at the track.

Penn National also lobbied unsuccessfully for slots at Laurel Park before it sold back its interest in the racetrack and in Baltimore's Pimlico Race Course to the Maryland Jockey Club's owner, The Stronach Group.


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