MGM wants National Harbor casino — but only with lower tax rate

MGM Resorts International says it would build a resort and casino at National Harbor near Washington if the state authorizes a site there — but only if Maryland lowers the tax rate on gambling revenue and allows table games.

"We could not do it under the current law," James J. Murren, the MGM chairman and CEO, said Friday at a news conference in Annapolis.


MGM announced Friday that it has signed a letter of intent with the Peterson Cos., owners of the National Harbor development on the Potomac River inPrince George's County. Under the deal, MGM would invest about $600 million in the casino. Another $200 million would come from the Peterson Cos.

Prince George's County Executive Rushern Baker and Senate President Thomas V. Mike Miller have been pushing for a casino at National Harbor — a sprawling development that includes shops, restaurants and offices — saying it would produce needed revenue for both the county and the state.


Nothing can happen, though, unless the General Assembly agrees to changes in the state's gambling program and the legislation goes on to win voter approval. The law in Maryland currently permits five casinos that feature only slot machines.

A bill that cleared the state Senate this year would allow a sixth casino, to be located in Prince George's, and table games such as blackjack at all six. It also would decrease the tax rate the state imposes on casino revenue.

"The tax rate is egregiously high," Murren said, referring to the current levy of 67 percent. He said his company isn't interested unless the tax rate is lowered to about 52 percent, the rate contained in the Senate bill.

Gov.Martin O'Malley, speaking with reporters Friday morning, said he would be willing to look at reducing the tax rate. But House SpeakerMichael E. Busch, who could not be reached Friday, has said he would have concerns about lowering the rate paid by casino owners. His remarks came when the General Assembly raised income taxes last month for some Marylanders.

Miller declined through an aide to comment.

Murren said MGM envisions a casino with about 200 table games and 4,000 video lottery machines, which would make it the second-largest casino in the state after the just-opened Maryland Live Casino at Arundel Mills. Such a plan would require a change in the state cap on the number of slot machines.

O'Malley has said he would call the General Assembly into session if a "consensus" plan to expand gambling in the state is developed by a work group appointed by the governor and legislative leaders.

Representatives ofthe Cordish Cos., which operate the casino at Arundel Mills, have firmly opposed the addition of a sixth casino and have said they do not see a need for a change in the tax rate.


"Companies that haven't invested a dime in Maryland have no right to demand concessions from the state," Joe Weinberg, president of the gaming and resorts division at Cordish, said in an email.

He said Central Maryland is already saturated with casinos, and opening a sixth would merely redistribute the revenues and "result in the state receiving less revenue at the end of the day."

The nonpartisan Department of Legislative Services estimates that the state would net about $160 million a year by adding sixth casino with the current 67 percent tax structure. The department has not produced figures based on a lower tax rate.

Some lawmakers felt any public discussion of changing tax rates is premature. Del.Dereck E. Davis, a Prince George's County lawmaker who has supported the idea of a sixth casino, saw the MGM announcement as a "negotiating ploy." He said the General Assembly would dictate the terms of any changes in the law.

"We could end up where they are or somewhere else," Davis said.

Should the General Assembly make changes to the state's gambling program this summer, voter approval in November would still be needed. The casino developers would also have to win a license from the state and zoning approval from the Prince George's County Council.


MGM is the world's largest casino operator. In Las Vegas, the company operates a dozen casinos, including the MGM Grand and the Mirage.

Murren said it would take his firm a year to design a casino and about two years to construct it. He stressed that his company would want a building that complements the setting.

"We are not going to drop Las Vegas into National Harbor," he said.