Gambling referendum results spur hiring plan

A day after voters approved an expansion of gambling in Maryland, the state's largest casino said it would hire 1,200 new employees for table games – even as the ballot question's leading opponent suggested that it will turn to the courts.

David Cordish, developer of the Maryland Live Casino at Arundel Mills, said Wednesday that his Cordish Cos. would begin the process of hiring and training the new workers – mainly dealers – immediately. He said the company would also begin purchasing table games and other equipment in order to offer alternatives to slot machines as quickly as possible.

Maryland's top gambling regulator said his agency has already begun drafting regulations for table games. Stephen L. Martino, director of the Maryland Lottery and Gaming Control Agency, said the agency will still have to conduct background checks on employees and equipment manufacturers, but he said Maryland Live could be able to offer table games as early as spring.

Cordish said he thought the approval could come through sooner than that.

A potential obstacle remains, however. Penn National Gaming, dealt a blow by voter approval Tuesday of a Prince George's County casino, signaled that it would not give up its fight and would back a lawsuit challenging the legality of the referendum. Penn National operates a casino in Charles Town, W. Va., that could see a significant loss of business if a casino opens in Prince George's.

The campaign for approval of the plan was largely financed by MGM Resorts International, which hopes to operate a casino at the National Harbor development in the county.

Kevin McLaughlin, spokesman for the ballot committee set up by Penn National to fight the gambling referendum, said the company was disappointed in the results. Voters approved the plan — which includes the new casino and allowing table games at all the state's gambling sites — 52 percent to 48 percent after a campaign whose final costs were likely to come in at more than $90 million.

McLaughlin said Penn National has "serious reservations" about whether the referendum process set up by the General Assembly was legal under Maryland's Constitution.

"We continue to believe that the Constitution requires a majority of qualified voters approve any expansion of gaming. [Tuesday's] vote fell far short of a majority of qualified voters. A lawsuit has been filed to this end, on behalf of the citizens of Maryland, and we intend to explore all of our legal avenues as well," McLaughlin said.

The lawsuit was filed last week in Anne Arundel County Circuit Court by former Prince George's County Councilman Tom Dernoga and former Del. Gerron Levi. It contends that the Constitution requires a majority of all registered voters — not just a majority of those who turned out for the election — to pass an expansion of gambling. That interpretation was rejected by the state attorney general's office, which has issued an opinion saying that a majority of votes cast on a referendum question is sufficient.

Martino said the commission will push ahead with the tasks of writing rules and conducting background checks regardless of the lawsuit.

"We're going to move ahead, and if someone tells us we need to stop, then we will," he said.

Jon Peterson, a principal in the company that developed National Harbor, said he's aware of the lawsuit. He said it was too early to say whether it causes much concern.

Peterson said construction of an MGM casino – at an estimated cost of $800 million – would bring added credibility to the sprawling National Harbor complex on the Potomac River.

"It will change the perception of Prince George's County as a place where people can go and be entertained and have retail and restaurants and do it all in one spot," he said. "It really becomes the destination location of the East Coast."

Gov. Martin O'Malley, a Democrat who called a special legislative session to pass the gambling plan and campaigned for its approval by voters, was unavailable for comment Wednesday. Lt. Gov. Anthony G. Brown and House Speaker Michael Busch, both Democrats, said they believe further gambling expansion will not be an issue in Maryland for the foreseeable future.

"I don't think there will be any expansion of machines or locations for quite a while," Busch said.

Brown said the next step will be the selection of a casino site in Prince George's. That will be the task of the state's Video Lottery Facility Location Commission.

Donald Fry, chairman of the panel, said he believes the commission will be able to put out a request for bids early next year and select a location before the end of 2013. Under the law, the earliest a Prince George's casino could open is 2016.

Penn National operates Rosecroft Raceway, another Prince George's site that is eligible for consideration for a casino. But Penn National, which has complained that the process is stacked in favor of National Harbor, made clear it would consider a legal challenge first.

As a result of the referendum, Penn National is now eligible to install table games at its Hollywood Casino in Perryville. McLaughlin declined to discuss the company's plan for that facility, which is much smaller than its mega-casino in Charles Town.

Officials from Caesar's Entertainment, which has a license to open a casino on Russell Street in Baltimore, were not available to discuss how expanded gaming would change their plans. They have previously said that the introduction of table games would allow them to consider using their premier Horseshoe brand — aimed at serious gamblers – instead of the second-tier Harrah's name that had been planned for Baltimore.

At a news conference in Silver Spring, county executives Rushern L. Baker III of Prince George's County, Isiah Leggett of Montgomery County and Ken Ulman of Howard County criticized what they called a campaign of misinformation by opponents of the measure.

Those working to defeat the ballot question had pointed out that nothing in the bill would guarantee increased spending on schools.

"Money will go toward education," Baker said.

Any Prince George's casino will face multiple levels of local review. Baker said his county is improving its permitting process for all developments to make it "as smooth and quick as possible while still following all the laws."

The referendum outcome is likely to have an impact on the gambling industry – both regionally and nationally.

Brian McGill, an analyst with Janney Montgomery Scott in Philadelphia, said that both MGM and Penn National stocks were down slightly Wednesday as the market fell after the election. But he said passage of Question 7 had little to do with the drop because the full brunt of expanded gambling won't be felt for at least four years.

"That's just an eternity," McGill said. "We know this is probably going to hurt Penn National eventually, but this is the company that will have a billion dollars in cash flow before 2016."

In addition to the lawsuit already filed over the legality of the referendum, McGill said Penn National would likely file suit if, as most expect, National Harbor is awarded a license. The company has already expressed concerns about the fairness of the process for selecting the site.

Another lawsuit could mean more delay.

"Table games won't make much of a change, but obviously the new casino will," McGill said. "But that doesn't mean a whole lot now. There are too many players and too many moving parts and too much time."

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