Baltimore City

Baltimore finally ready to gamble as casino opens Tuesday

Baltimore's first casino could have risen more than a dozen years ago on the faded industrial stretch that is now posh Harbor East. Or more controversially, slot machines could have made their city debut in the family-oriented Inner Harbor or at Pimlico Race Course, in the middle of an economically depressed neighborhood.

Instead, the city's long and at times fraught path toward slots and table games brought it to Russell Street south of the stadiums, where on Tuesday night the $442 million Horseshoe Casino opens to the public — and begins seeking its niche in an increasingly saturated market of gambling options.


Leaving behind the gas stations and storage units of this utilitarian part of town, gamblers will enter a fantasyland bathed in the light of golden chandeliers, dine at celebrity-chef restaurants and, most of all, chase the big payoff on noisily pulsating slot machines and in quietly plush high-roller rooms.

"I can see myself coming here, maybe after a football game or before, and just hanging out," said Steven Dannenmann, a CPA from Severn who won second place and $4.25 million in the 2005 World Series of Poker.


"I tell you, I've been to a lot of casinos, in Vegas and Atlantic City and throughout Europe, and they have done a really great job here — all the glitter, but also giving it a flavor of Baltimore," said Dannenmann, one of the guests invited last week to test out the Horseshoe in advance of its official opening.

Much is at stake for Baltimore, whose deal with Horseshoe calls for the casino to pay the city at least $11 million in lease and profit-sharing agreements and property taxes during its first year. The Baltimore casino will join its four predecessors in generating revenue for the state that goes toward education, racing and other projects — nearly $1.82 billion since 2010, according to the Maryland Lottery and Gaming Control Agency.

In the time it took the Horseshoe to open, the last of the original five casinos approved by voters in the 2008 slots referendum, the ground beneath the gaming industry has shifted rapidly: Nationally, revenues are rising slightly, but so is cannibalization as more states grab for a piece of the gambling pie.

Maryland was second only to Ohio in increasing gaming revenues last year. In Maryland's case, legalizing table games in 2012 pumped up its take. That ballot measure also allowed a sixth facility — MGM Resorts expects to open a casino at National Harbor in Prince George's County in two years — competition that should concern the Horseshoe before it even opens, experts say.

"Anyone can build a casino. Just opening it isn't the success," said gambling and hospitality consultant Jonathan Galaviz.

A partner with Las Vegas-based Global Market Advisors, Galaviz said a casino needs "constant innovation" to attract gamblers and keep them from drifting to one of the many other options out there. "Every couple of years it will have to re-invent itself. The multiyear economic vibrancy that it brings, that's the measure of success, at least from the government's perspective."

While casinos generally are located in more remote areas — such as resorts and Native American reservations — the Horseshoe has a compact footprint and rises two stories instead of the conventional single, sprawling floor.

It eschews the usual windowless and even clockless design of casinos — the better to keep customers in the dark about the amount of time they're gambling away — by offering occasional, sweeping city views from windows and terraces.


In fact, the Horseshoe's success could hinge in part on how well it integrates rather than separates from its neighbors.

"Let's go downtown to the O's game, and then let's make a night of it," Visit Baltimore president Tom Noonan imagines an ideal customer saying.

But to make an overnight of it, most visitors will have to book a ride or hotel shuttle: The Horseshoe is opening without attached accommodations, although it is next door to a Holiday Inn Express. (The hotel raised its normal nightly rate of less than $130 to $171 for Tuesday's opening and is fully booked that night.)

The casino has partnered with the Hyatt Regency Baltimore and the Sheraton Inner Harbor, and will steer customers to other hotels located downtown and even in Harbor East.

The Horseshoe has already made at least one prominent friend in the neighborhood: The Ravens have booked the entire wrap-around deck of one of the casino's restaurants, Johnny Sanchez, for Tuesday night. They'll have a familiar view — M&T Bank Stadium.

Last week, even before it opened, the Horseshoe was approaching sensory overload levels. A band was playing loudly from a loft midway between two levels of a Las Vegas-style bar. Slots machines were flashing their usual neon-colored lights and jangling sound effects, with a couple even shooting rather trippy 3-D images on their screens.


Meanwhile, state regulators were making their final checks before allowing the casino to open: The slots' software, the casino money-counting machines and surveillance procedures, even the poker cards, craps dice and roulette balls had to meet multiple and exacting standards.

As guests wandered about, playing the games and enjoying the bars and restaurants — also part of the state's tests, to ensure that the casino could handle a crowd — employees in crisp new uniforms and seemingly mandatory smiles worked to get showtime-ready.

"We're all learning how to dance together at this point," said John Besh, a celebrated chef from New Orleans who with colleague Aaron Sanchez, well-known to viewers of the Food Network's "Chopped" show, joined forces to open Johnny Sanchez.

Urban casinos like Baltimore's Horseshoe remain a novelty; fewer than a dozen of the nation's more than 900 casinos are in or near downtowns.

And yet, as gaming interests expand from their traditional locales, cities are increasingly trying their hand.

They've had both setbacks and successes. The country's first urban casino, Harrah's New Orleans, opened in 1995 and has filed for bankruptcy protection twice, although its fortunes have improved in recent years. In Detroit, itself bankrupt, the three casinos are considered the most reliable source of revenue.


Cincinnati officials credit their own Horseshoe Casino with expanding downtown's boundaries and helping to draw conventions. But the casino has underperformed, only contributing half the projected $20 million a year in revenues to city coffers.

Its counterpart in Cleveland, which took up residence in a shuttered department store, has been "a good economic boost," said Alan Silver, a former casino executive who is now a professor at Ohio University. But monthly revenues are down compared to a year ago, as it and other facilities face competition from "racinos" such as the Hard Rock race track slots parlor in the city's suburbs.

And now Baltimore makes its long-delayed foray into casino gambling. The initial bidder for the city's slots license was rejected by state regulators in 2009 for failing to raise sufficient money for the project. That spawned years of litigation, followed by deal-sweetening efforts to land another bidder, and in July 2012, a group led by Caesar's Entertainment won the city license.

Several months later, Maryland voters approved adding table games to the state's gambling lineup. Originally conceived as a Harrah's, the casino was switched to the Horseshoe brand known for table games and its association with the World Series of Poker. It's one of eight carrying the brand across the U.S.

"I don't think anybody wanted the delay," Mayor Stephanie Rawlings-Blake said Friday. "But that being said, that meant that our casino was planned when we knew table games would be legal. That gave us an opportunity to get the world-class facility that we wanted and that we couldn't have had with just slots."

But the delay also gave the competition a head start — on making money and on developing loyal customer bases.


Just 12 miles to the south looms Maryland Live at Arundel Mills mall. In the two years that it's been open, the casino has become one of the highest-grossing on the East Coast. Maryland Live generated more than $58 million from slots and table games in July, according to the state's gaming agency, more than three-fourths of what the state's four casinos produced in total. Owner David Cordish indicated he believes Maryland Live will continue its dominance even with Horseshoe opening.

"Historically, urban casinos have struggled versus suburban casinos," said Cordish, noting his facility's "unparalleled road access and 13,000 free parking spaces." That, he added, is hard to duplicate in a city.

"That said, the mayor of Baltimore and the city agencies have put their shoulders to the wheel to be helpful to Horseshoe, and that has to be taken into account," he said.

Ease of access could help Maryland Live keep most of its customers from drifting northward, said Alan Woinski, a New Jersey-based gaming industry consultant. The Horseshoe might siphon off 5 percent to 10 percent of Maryland Live customers, at least initially, he said.

"If there's any kind of traffic, people will go somewhere else," said Woinski, president of Gaming USA. "People don't want to sit in traffic."

Woinski isn't much of a fan of city casinos. In addition to access issues, he questions if Baltimore's Horseshoe, without a hotel, can attract the high rollers who will spend more time gambling than day-trippers.


"That's where you get the higher-spending customers. These days, it's a given. If a casino is going to be the slightest bit successful, you build a hotel," Woinski said.

He also said urban casinos could "prey" on a city's poor, who can least afford risking their money. Rawlings-Blake bristles at the notion.

"I think there's a tendency for people to think we have to substitute our judgment for that of poor residents," she said. "They are aware of their financial obligations and what they can afford."

The mayor said she is satisfied that sufficient measures are in place to help problem gamblers, and that the city has sufficient "high-quality hotels, many a short distance away from the casino" to attract high rollers.

"I think plenty of people want to bet against Baltimore," Rawlings-Blake said.

Not Mazhar Hayat. He is feeling lucky, or at least very well-positioned, as the manager of the Russell Street Shell station catty-corner from the casino.


"Customers keep telling me, 'Hey, man, you guys are in a good spot. You are right in front of the casino,'" Hayat said.

To prepare for the coming influx of potential customers, he is loading up on inventory — not just the usual hot dogs and soda but also shampoo, phone chargers and items Horseshoe patrons may have forgotten to bring.

The city wants other businesses and residents to benefit from the casino, and set a goal of half of the Horseshoe's 1,700 to 1,900 full- and part-time jobs going to local residents. This week the mayor plans to announce how many have landed casino jobs, a spokeswoman said.

During two events last week, it was unclear how many employees were from Baltimore. Horseshoe officials did not allow reporters to speak to workers or guests who weren't hand-picked.

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Proceeds from the invited guests benefited the Cystic Fibrosis Foundation and Living Classrooms Foundation. At the first event alone, said Charles LaBoy, assistant director for gaming at Maryland Lottery and Gaming Control Agency, net proceeds were about $16,000 from table games and $72,000 from slot machines.

But the real test comes starting at 9 p.m. Tuesday, when the doors open to the public, and Baltimore begins to see what it rakes in.


The director of the state's gaming agency likes its odds.

"I just think it's an attractive location," said Stephen L. Martino. "It's going to be competitive."

Baltimore Sun reporters Arthur Hirsch and Jeff Barker contributed to this article.