Maryland casino expansion debate sparks TV ad campaigns

On a recent night, sandwiched between television coverage of Olympic dressage and synchronized diving, a commercial touted the benefits of a new casino at National Harbor in Prince George's County.

"Good-paying jobs. Better schools," said a man's voice. "But it won't happen if the special interests get in the way."

Within minutes, a woman in another ad warned that the state legislature is rushing a deal to build a casino at National Harbor. The culprit? "Casino special interests," she said.

The commercial matchup, on all major networks in Baltimore, is part of an onslaught of ads focused on the issue of whether to expand casino gambling in Maryland.

Supporters and opponents have spent more than $1.1 million for television and radio ads over the past eight weeks, and more are expected in the days leading up to Thursday's special session of the General Assembly. The pricey prime-time ads are highly unusual for moderate Maryland, which, outside of gambling, rarely sees expensive issue campaigns.

Still, the spending on airtime is a pittance compared with the amounts that casino owners in Maryland could gain or lose. The proposed National Harbor casino could bring in $424 million a year in gross revenue, the state estimates, while the Maryland Live casino at Arundel Mills could lose as much as $125 million a year from the new competition. Penn National, which owns a casino in Maryland and another in West Virginia, said in an SEC document filed last week that it could be "adversely affected" by a casino at National Harbor.

This week, lawmakers will consider adding a casino at National Harbor in Prince George's County, authorizing table games such as blackjack and possibly cutting the tax rate at existing casinos to compensate for greater competition. Should the General Assembly pass a gambling expansion bill, the issue would go before the state's voters in a November referendum, so the back-and-forth battling through commercials is likely to intensify as the opposing sides vie for support.

"It is going to become a huge battle," said Shawn J. Parry-Giles, director of the Center for Political Communication & Civic Leadership at the University of Maryland. "The casinos are going to put everything they can into it."

It is unclear, however, exactly who is helping to finance the ad campaigns — and how much they are giving.

Both sides are using tax-exempt organizations, which are not required to publicly reveal their donors. Finding out who is bankrolling the ads is "virtually impossible," said David Vance, a spokesman for Campaign Legal Center, a Washington-based group that pushes for greater transparency in political advertising.

The groups must file annual forms with the Internal Revenue Service showing how much they raised and spent — but they do not have to disclose supporters' names or donations.

Supporters of the National Harbor casino have spent more than $600,000 on television and radio advertising this summer. Two opposing groups have spent about $500,000, according to a Baltimore Sun review of public files at local television stations.

One group financing the ads, Building Trades for the National Harbor, is tied to The Peterson Cos., which owns National Harbor and wants permission to build a casino. (The name was changed to Maryland Workers for National Harbor Inc., last week, but the group is still using Building Trades for the National Harbor to make ad buys.)

The group is stressing union roots — a politically astute move for Maryland's deep-blue state. The treasurer is listed as Howard Libit, who works for Kearney O'Doherty, a Baltimore-based public affairs firm retained by National Harbor's owner.

Libit would not say how the group is being funded. A spokesman for MGM Resorts, Gordon Absher, said his company is helping to pay for the ads, but he would not say how much it is spending. MGM would operate the proposed casino at National Harbor.

The group's commercial includes images of people working and children learning, as well as a gleaming view of National Harbor complete with a small sailboat. It started advertising first, in late June, with a spot saying that the new casino could yield $1 billion dollars in revenue over three years, a figure that is not supported by state estimates.

But the group's current ad is far less specific, promising jobs and "millions" in new revenues.

The other major group buying ads is even less transparent about its backers. The Taxpayers Protection Alliance, a nonprofit based in Alexandria, Va., has spent more than $300,000 on ads opposing a National Harbor casino since mid-July. It has also funded radio ads — including some in the Washington market — and a glossy mailing targeted to some members of the House of Delegates.

The group was formed recently — in 2011. It has never before focused on gambling and mostly deals with highlighting wasteful government spending on the federal level.

David Williams, president of the organization, said he "does not discuss donors." He said the group's opposition to gambling expansion in Maryland is consistent with its anti-corporate welfare position because current casino owners would receive tax breaks to compensate them for the enhanced competition.

David Cordish, who owns the Maryland Live casino and strongly opposes a casino at National Harbor, said he is not funding the group.

Another deep-pocketed company that is opposed to a new casino at National Harbor is Penn National Gaming Inc. The company's racetrack and gambling site in Charles Town, W.Va., brought in nearly $197 million in the past 12 months and could lose some of its Washington and Virginia gamblers to a new casino.

Eric Schippers, a spokesman for Penn National, would not say whether his company has written any checks for the commercials. "As a policy matter, we don't comment on fishing expeditions," he said when asked about the company's role in financing commercials.

But corporate leaders have sent a clear message to Gov. Martin O'Malley. Penn National CEO Peter M. Carlino wrote to the governor in late July, pledging to "fight furiously to stop this rush to create an exclusive opportunity for National Harbor."

Carlino, who sits atop the $2.8 billion firm, said he would wage the battle "to the limits of our corporate resources."

Three years ago, Penn National spent about $38 million in Ohio to defeat a ballot initiative that would have allowed a new casino — one that threatened its existing facility in Indiana.

Penn National also has spent heavily in Maryland. It shelled out $2 million to support the creation of Maryland's gambling program in 2008. Then it successfully bid to build a slots parlor in Cecil County.

In 2010, a group partly owned by Penn National spent $7.4 million on an Anne Arundel County campaign in an attempt to stop Cordish from building the Maryland Live casino. (County voters allowed the casino to go forward.)

The Taxpayers Protection Alliance's commercial suggests that the state would "create a secret commission" to give "tax bailouts for casinos."

To back up the assertion, it makes reference to a Baltimore Sun blog post that quotes O'Malley as saying that top lawmakers were coalescing behind an idea for a commission that would have a role in setting tax rates for casino operators. The governor has yet to offer a formal proposal for such a commission.

A third group, which has placed a single ad buy, is the Prince George's County Contractors Association. Its ad, no longer running, linked MGM Gaming — the group that would run a casino at National Harbor — to what it called "organized crime."

That allegation refers to MGM's decision to sell its share of an Atlantic City casino rather than terminate its partnership in Macao with Chinese businesswoman Pansy Ho. A New Jersey board found her to be "unsuitable" as an operator because of her father's alleged ties to Asian crime gangs.

MGM Chief Executive James J. Murren noted that he never had the chance to formally rebut the allegations in New Jersey. He said the Nevada casino commission, looking at essentially the same facts, approved the partnership.

The impact of these summertime television and radio ads is difficult to gauge. A number of lawmakers said they'd heard from constituents about the casino issue, but said the comments seemed to be mostly generated by news coverage and editorials, rather than the television commercials.

Sen. Edward R. Reilly, an Anne Arundel County Republican, called the commercials "self-serving."

"Everybody hates 'em," he said. "No one has any confidence in the statements they make."

Baltimore Sun reporter Michael Dresser contributed to this article.