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The Maryland Senate prepared to take up the governor's gambling bill Friday as Senate PresidentThomas V. Mike Millerexpressed cautious optimism that the General Assembly will approve the measure by early next week.
The legislation will be on the Senate floor following its overwhelming approval Thursday by the Budget and Taxation Committee. The committee voted 11-1
to pass the bill just hours after the opening of the Assembly's second special session of the year.
"I think we're going to get it done. If we don't, it's not because we haven't tried," said Miller, who sat in for some of the hearing. He has been a relentless champion of allowing more gambling in Maryland — especially a new casino inPrince George's Countythat opponents fear would saturate the market with slot machines.
If Miller has enough votes, he could bring the measure to a final Senate vote late today — subject to an agreement on any changes that might be made in the House.
Gov.Martin O'Malleyacknowledged Thursday that his bill may face some opposition within the Senate Democratic caucus, but said he is "confident" the measure will pass in both chambers.
"We have to create jobs," O'Malley said. "This is about creating jobs and remaining competitive with other states."
The governor's bill would permit a sixth casino in Maryland, to be located in Prince George's, and allow Vegas-style table games at all of the state's gambling locations. To compensate for increased competition, the bill would cut the tax rate for some existing operators.
The Senate has long been considered the more receptive to gambling of the two legislative chambers. The larger fight is expected to start Friday when the House of Delegates convenes. House Speaker Michael E. Buschhad a series of private meetings Thursday with Democrats who were withholding their support.
"We've talked to just about everyone," Busch said. "I think everyone feels in some way comfortable with the legislation."
Legislative analysts say the package of changes in O'Malley's bill would yield the state $200 million a year in additional revenue — to be directed to education — beginning in July 2016.
Of that figure, $130 million would come from provisions of the bill that have been less controversial — allowing games such as poker and blackjack at existing casinos and letting them stay open around the clock if their local jurisdictions approve. Only about $70 million would come from opening a new casino near the Woodrow Wilson Bridge, analysts estimate.
But Warren Deschenaux, the legislature's chief policy analyst, said those figures do not account for a possible tax rate reduction of up to 5 percentage points for slot machines at the existing casino at Arundel Mills and another planned for downtown Baltimore. The two venues can seek the tax break, worth an estimated $30 million to $40 million, if competition from a Prince George's casino cuts their revenues more than currently projected.
With revenue to the state expected to level off at $225 million to $235 million near the end of the decade, the analysts are putting the potential payoff of a Prince George's casino at roughly $60 million to $100 million.
When asked whether revenue from
adding a casino in Prince George's County would be worth all of the work, Busch said: "You'll have to ask the governor."
Some witnesses at the hearing and at local delegation meetings Thursday
questioned whether the likely gains justified the possible downsides.
Joe Weinberg, managing partner at the Maryland Live Casino at Arundel Mills, told senators and delegates from Anne Arundel County thatthe Cordish Cos.made their bid to build the giant slots-only gambling hall based on the assumption that there would be no competition from a rival in Prince George's County.
"We did so based on the constitutional provision that there would be five casinos in the state," Weinberg said, noting that the companies are paying the nation's highest tax rate, 67 percent, on slots revenue. "We made the business decision that we could pay that and build a world-class facility in Anne Arundel County."
When it has all of its planned 4,750 slot machines, Maryland Live will be the third-largest commercial casino in the country, Weinberg said. Another casino slated to open in Baltimore in mid-2014 will be the seventh largest, he said. Both, he said, have to compete with the nation's fifth-largest in CharlesTown, W. Va.
Adding another "mega-casino" in Prince George's with 3,000 slots would be harmful to business, he said.
"There is no precedent for the saturation of machines in one small corridor," he said.
Weinberg received strong backing from Anne Arundel County Executive John Leopold, who warned that the "hold harmless" provisions of the governor's bill might protect tax revenue to the county but would not protect against a loss of jobs at Maryland Live or at retail and service businesses near Arundel Mills.
"This additional site will be a boa constrictor that will squeeze the life out of Maryland Live," Leopold said.
Maryland's other casino licensees are split over the governor's proposal.
William J. Rickman Jr., principal owner of the casino at Ocean Downs outside
, said the tax breaks and eased operating
restrictions in O'Malley's bill are just what is needed at his struggling venue. He put his losses there at $2.5 million, largely because of the seasonal nature of the business near the beach. "We need relief now. We're losing," Rickman said.
Caesars Entertainment, which recently was awarded the license for the Baltimore casino, reaffirmed its support for the bill. David J. Satz, a spokesman for the firm, said the company is "pleased with the bill" and believes it "sets a fair balance" — the addition of table games and a lower tax rate make up for the increased competition.
Jim Murren, the CEO for MGM Resorts International, which would operate a proposed casino at National Harbor on the Potomac River, said the bill is the result of "thoughtful work" and the company is "completely comfortable working within the contours of the bill."
Murren said he believes "the vast majority" of gamblers at National Harbor would come from out of state, and that the casino wouldn't be poaching market share from Maryland's existing casinos. "It is going to dramatically expand the pie of gaming in the state," he said.
The other company that has said it would want to build a Prince George's casino dissented. Eric Schippers, of Penn National Gaming, said he believes an agreement has been made "behind closed doors" to circumvent competitive bidding and give the casino contract to National Harbor and MGM.
Schippers also expressed outrage that Penn National's Hollywood casino in Cecil County — which has seen a nearly 30 percent dip in business since Maryland Live opened at Arundel Mills — would receive the smallest tax break.
The Hollywood casino, he said, "is now being unfairly, and likely unconstitutionally, singled out to pay a substantially higher tax rate than any other in the state."
After the testimony ended, the committee cast a bipartisan vote in favor of the measure. Only Sen. Ed DeGrange, a Democrat who represents the district that includes Maryland Live, dissented.
Some Democratic senators who have previously supported expanding gambling expressed ambivalence about the bill before them now.
Sen. Bill Ferguson of Baltimore asked for a change in the bill — directing that the city's share
of table games revenue be dedicated to school construction in Baltimore. It was accepted without a hitch in committee.
Another change was to a provision to prohibit some casino employees from giving political donations. Sen. George C. Edwards, a Western Maryland Republican, successfully amended the bill to limit donations
only from those with greater than a 5 percent stake in a casino.
Senate Minority Leader E. J. Pipkinsaid Republicans object strongly to the process under which O'Malley called the special session — especially the release of the draft gambling bill less than two days before the Senate convened.
"The governor has managed this horribly, and now it'll be up to us to sort through it in the next few days," said Pipkin, who represents the Upper Eastern Shore.
Pipkin introduced a package of bills that he billed as a Republican jobs package. They were referred to the Senate Rules Committee, traditionally a graveyard for measures legislative leaders don't want to consider.
Elsewhere in Annapolis, the Senate Judicial Proceedings committee approved a bill Thursday that would overturn a recent court ruling singling out pit bulls as inherently dangerous. The bill would make owners of any breed liable for their dogs' behavior and exempt the owners' landlords from liability.
A vote on that bill is expected Friday.
Maryland Policy & Politics
Reporter Fakhar-Ur-Rehman Durrani contributed to this article.
What's next
The Senate is scheduled to meet Friday at 10 a.m. to debate proposed amendments to the governor's gambling bill and to take a preliminary vote on the legislation.
The House is scheduled to meet at 11 a.m. so the bill can be introduced in that chamber.
The House Ways & Means committee is to meet at 1:30 p.m. for a hearing on the bill.