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State approves slots reductions at Maryland Live and Horseshoe

State approves fewer slots more tables games at two casinos

The Maryland Lottery and Gaming Control Commission approved requests Thursday by the state's largest casinos — Maryland Live and Horseshoe Baltimore — to eliminate 300 slot machines each and add more profitable table games.

Horseshoe, which has 2,500 slots and 147 table games, received permission to add 30 table games. Maryland Live, which has 4,222 slots and 189 table games, will add 13 table games.

Approval came on unanimous voice votes of the commission, though some state legislators voiced concerns last week about the impact on the state's share of casino revenues.

Under state regulations, casino operators keep 80 percent of the proceeds from table games and about 33 percent from slot machines; the rest goes to the state to help fund education, subsidies for the horse industry and other programs

A consultant's analysis estimated that the state would lose $498,000 in revenue in the first year if Maryland Live reduced its slots by the requested amount, but that the long-term financial outlook for the move was "positive."

Robert Norton, president and general manager of Maryland Live, told the commission that he disagreed with the short-term assessment.

"We don't predict any negative impact due to this change," Norton said.

The consultant, Will Cummings, said at the meeting that Horseshoe's slot reductions also would cause a state revenue decline, but that the loss would be quickly offset by additional table games profits.

Horseshoe general manager Chad Barnhill said the adjustment will allow the casino to take better advantage of a "robust" market in Baltimore for table games.

Barnhill said the change means that Horseshoe, which told the commission it plans to hire 100 additional table-games dealers, will have additional flexibility to offer low-minimum bets — something he said the public has been seeking.

"I think it's very positive to be able to do that," he said after the meeting.

The commission was originally scheduled to vote on the slots reductions proposals last week, but the state Senate's Budget and Taxation Committee requested a delay until it could be briefed.

"As you know, any reduction in the number of video lottery terminals will have a significant impact on state revenues," committee chairman Edward J. Kasemeyer said in a letter to the commission on Jan. 21.

The Senate committee members "did not feel they were entirely knowledgeable about the mechanics of what was going on," Lottery and Gaming Control Agency director Stephen Martino said at Thursday's meeting.

The vote was postponed until the committee could be briefed on Jan. 23.

"We need every nickel we can get," Sen. Douglas J.J. Peters, a member of the Budget and Taxation Committee, said of the state government.

But Peters, of Prince George's County, said he came away from last week's hearing better understanding the casinos' rationale for reducing their slots numbers.

Peters said legislators were told that slot machines were going unused.

"The bottom line is if the machines aren't generating revenue, we're not making anything," Peters said.

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 million from table games — in December. That was down 6.7 percent from November and about 4.5 percent from December 2013 in the face of increased competition from Horseshoe.

jebarker@baltsun.com

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