Gambling expansion wins narrow victory

After the most expensive political campaign in Maryland's history, proponents of a plan to expand the reach and variety of casino gambling in Maryland won a narrow victory.

The measure would allow Maryland casinos to offer table games such as blackjack and roulette, and allow a casino to be built in Prince George's County.


Shortly before midnight — even as the final votes were being counted — supporters of the ballot question claimed victory and set off fireworks over National Harbor, the most likely site of that casino.

The question was put on the ballot by legislation backed by Gov. Martin O'Malley and passed by the General Assembly in a special session in August. It includes a provision requiring that a majority of Prince George's County residents approve the measure in order for a casino to open there. Returns from that county showed a solid margin in favor of the measure.


But support for the measure was lagging in most of the Baltimore area, with the exception of the city, where Mayor Stephanie Rawlings-Blake was a key backer. Even in Baltimore, the margin between supporters and opponents was narrow.

Two rival casino companies — MGM Resorts International and Penn National Gaming — poured a total of more than $80 million into the campaign. Overall, the ballot question drew more than $87 million, according to the most recent figures.

MGM, hoping to become the operator of a glittering $800 million "destination resort" casino at National Harbor in Prince George's County, urged voters to clear the way for its plans by approving Question 7. Penn National, seeing National Harbor as a threat to its flagship casino in Charles Town, W.Va., matched MGM nearly dollar for dollar in its bid to defeat the measure.

While the cost of the campaign was enormous — more than double Maryland's most expensive gubernatorial race — the stakes for the two companies were many times greater. Gambling industry experts said that over the long term, a National Harbor casino could cost Penn National hundreds of millions of dollars while MGM could earn billions at National Harbor.

In their ad campaigns, the casino companies cloaked their interests in arguments over what would be best for Maryland. MGM-sponsored ads promised thousands of jobs and about $200 million a year in additional money for education. Penn National's ads charged that the plan was hatched by politicians in a back-room deal with no guarantee that schools would benefit.

Last night, supporters of the measure gathered at National Harbor to watch nervously as the returns trickled in.

At about 10 p.m. former Prince George's County Executive Wayne K. Curry, who led a get-out-the-vote effort on behalf of Question 7, said that "it's a little too early for me to be smiling but I can fake it."

Earlier in the day, current County Executive Rushern Baker warned that failure of the measure could lead to drastic budget cuts and force layoffs of country workers.


Though the gambling expansion was backed heavily by O'Malley and other state Democratic leaders, the votes did not reliably follow partisan lines.

Charles Collier, a Romney voter from North Laurel in Howard County, cast his vote in favor of Question 7. "I am all for expanded gambling because the way I look at it, it's a voluntary tax," he said.

Amy Alee, an Obama voter who lives near the Maryland Live Casino at Arundel Mills, voted no even though she's all for table games. Her concern: tax reductions for casino operators, another provision of the new law.

"I don't think they should get any kind of tax break when we don't," she said.

Maryland made its first venture into big-time casino gambling with the General Assembly's approval in 2007 — ratified by voters the next year — of slot machines at five locations. Three have since opened — at Arundel Mills, Perryville and Ocean Downs.

Two others are in the works, in Baltimore and at Rocky Gap in Western Maryland.


At the insistence of Senate President Thomas V. Mike Miller, a Calvert County Democrat, the General Assembly linked two important changes to that program. Table games would be permitted, but only if legislators backed a sixth casino, at a site in Prince George's County.

With slots already legal, the addition of table games was seen by many lawmakers as a logical step — drawing opposition only from die-hard opponents of gambling. The Prince George's casino, however, was a deeply divisive proposal.

That provision received a boost last year when Baker threw his support behind a casino at National Harbor. Soon after, the developer of that site on the Potomac River enlisted Las Vegas giant MGM as casino operator.

Rawlings-Blake supported the expansion plan, largely because it would allow the Baltimore casino to add table games. Caesars Entertainment, the majority owner of the city casino license, said the benefits of table games would outweigh any disadvantages from increased competition and would allow it to build a larger, more luxurious casino.

The legislation that voters confronted Tuesday was put on the ballot during a special session called by O'Malley. The measure passed comfortably in the Senate but squeaked by with one vote to spare in the House.

The legislative action set off the largest flurry of political advertising in Maryland political history. Between them, Penn National, MGM and Caesars Entertainment shattered the old Maryland spending record for a single race — set in the 2006 gubernatorial election.


By Monday, MGM had spent more than $43.5 million and Penn National had spent $41.3 million on the ballot question. Total spending roughly equaled the amount spent on the past four Maryland gubernatorial races. Final campaign finance reports, due after the election, could drive the total close to $100 million.

Penn National's ads sought to raise doubts that Maryland leaders would devote new revenues from the gambling expansion to education. MGM and its allies countered by arguing that Penn National's true motivation was to protect its casino in Charles Town from competition.

In its campaign, MGM enlisted an array of political figures and celebrities, including O'Malley, Rawlings-Blake, and football stars such as ex-Raven Jonathan Ogden and former Washington Redskin LaVar Arrington. Also lining up behind the casino expansion were Baker, Howard County Executive Ken Ulman, Montgomery County Executive Isiah "Ike" Leggett and former Baltimore County Executive Jim Smith.

Penn National countered by enlisting Maryland Comptroller Peter Franchot to level the charge that the gambling expansion plan would not yield additional money for education.

The voters' decision affects only the most controversial parts of the new law: table games, a sixth casino and the tax reductions.

Left out of the referendum question were provisions transferring ownership of slot machines from the state to owners of the larger casinos, removing restrictions on hours of operation, setting up a state gaming commission to regulate casinos as well as the lottery, and expanding the ability of veterans groups to install slot machines in their halls.


That last provision was crucial to Speaker Michael E. Busch's efforts to secure the final votes needed for passage in the House of Delegates, including those of a handful of Republicans.

Through most of the debate over the legislation, there was no more forceful opponent than David Cordish, chief executive of the company that operates the Maryland Live Casino at Arundel Mills. But after behind-the-scenes talks with legislative leaders produced tax breaks to offset the prospect of added competition, Cordish withdrew his objections and moved to a position of neutrality.

True to his word, Cordish stayed out of the referendum fight as other casino companies battled it out.

If Question 7 is approved statewide and in Prince George's County, it would set in motion a process for determining which county location would get a casino license, and would allow existing casinos at Arundel Mills, Perryville and Ocean Downs to offer table games as soon as they complete the licensing process and install them. If the measure wins a statewide majority but loses in Prince George's, the sixth casino would not be built, but other provisions of the law — such as allowing table games at the five already approved casinos — would take effect.

Special correspondent Nahal Mottaghian contributed to this article.