Casino referendum breaks spending record

A new round of spending by Penn National Gaming and MGM Resorts International has pushed the ad war in the referendum over expanded gambling into record territory, eclipsing the $34 million raised for the 2006 governor's race.

In a filing posted Tuesday with the State Board of Elections, the ballot committee financed by Penn National reported that its outlay for the effort to defeat Question 7 has reached $21.6 million — $18 million of which has been spent.

Meanwhile, a pro-expansion committee reported that it has spent $17.7 million. Of that, $14.4 million was supplied by MGM and the rest by its allies at Caesars Entertainment and the Peterson Cos.

The combined spending of $35.7 million — with four weeks to go before Election Day — exceeds the total spent by Democrat Martin O'Malley and Republican Robert L. Ehrlich Jr. when O'Malley ousted the incumbent governor. The gambling money has financed an ad blitz — via television, radio and direct mail — that makes the referendum issue difficult to avoid for many Marylanders.

State Sen. Brian E. Frosh, a longtime critic of the gambling industry, called the spending "wretched excess" on both sides.

"It's really a battle of the billionaires, and it's such a waste of money," said the Montgomery County Democrat. "And if you're trying to watch a ballgame, it's so annoying."

But James Karmel, a professor at Harford Community College who tracks the gambling industry, said he's not surprised to see spending reach that level. He said $35 million isn't all that much when billions of dollars and control of the potentially lucrative Washington market are at stake.

"The long-term market share justifies the political investment," Karmel said.

MGM is the prospective developer of a casino at Peterson's National Harbor in Prince George's County — one of the sites permitted if voters approve the gambling expansion plan adopted by the General Assembly.

Penn National is fighting the plan, contending that it puts its Rosecroft Raceway at a disadvantage in the competition for a casino license. Penn National is also concerned that a National Harbor casino could cut into business at its Hollywood Casino in Charles Town, W.Va.

Caesars, an affiliate of which holds the license for a planned casino in Baltimore, supports the referendum measure because it would clear the way for casinos to offer table games such as blackjack. Caesars executives say that with table games, they can make the Baltimore casino a more upscale destination than they could under Maryland's current slots-only law.

The avalanche of cash has flowed into a campaign that got off the ground barely six weeks ago. The casino companies' spending indicates that neither side is inclined to cut its losses.

"It appears that both sides are in. They're in big time," he said.

Penn National in particular has shown a willingness to spend freely to protect its interests at the polls. In 2008, the company spent $38 million in Ohio to defeat a measure that would have put it at a competitive disadvantage. Proponents spent $26 million. Penn National won.